Three Big Take-Aways from the NRF Big Show
As always, it seems to have blurred by before it even started, but NRF 2016 is over. As the retail industry collectively unpacks it bags, sorts through business cards and decompresses, I’d like to offer a few key trends I observed during my own three days of Big Show immersion.
Back to Basics
In my NRF preview column, I predicted that exhibitors would offer omnichannel solutions that included back-end alignment or integration. This was an understatement. The biggest Big Show trend by far was a coherent focus on retail fundamentals. Order management and fulfillment, inventory tracking, assortment planning and other “blocking and tackling” functions that have been pushed out of the spotlight in recent years are once again commanding industry attention.
This is not to say that retailers have abandoned their interest in providing a highly personalized, seamless customer experience in real time. Far from it. However, retailers are realizing that the same fundamental processes which supported the traditional customer experience are just as important to ensuring the modern omnichannel consumer is satisfied.
Making the (Consumer) Grade
Buoyed by the growth of cloud infrastructure and the widespread entrance of millennials into the workforce, retailers are introducing consumer-grade devices and user interfaces in the enterprise.
The easy accessibility of cloud-based solutions means retailers can run a wide variety of functions, including in-store POS and clienteling as well as warehouse and field tasks, on ordinary or slightly customized tablets and smartphones. This reduces the up-front cost associated with purchasing more specialized retail-specific devices, although they may require more maintenance and have a shorter lifespan.
In addition, mobile-centric millennial employees will have a much lower training threshold for using the same devices they rely on for everyday activities. Many retailers are extending this consumerized approach to user interfaces for employee devices. Employees are often now provided with more intuitive and visually-focused navigation, such as being sent photos of products rather than SKU numbers.
Some retailers are taking this idea a step further with a “Tinder-style” approach that lets employees swipe right or left on a mobile device to indicate whether a task has been completed.
Not the Year of IoT
Prior to the conference, many industry prognosticators predicted the Internet of Things, or IoT, would be the dominant theme of NRF 2016. NRF has had years where emerging technologies such as mobile or omnichannel were universal topics of discussion, and common wisdom held 2016 would go down as the year of IoT.
But it won’t. IoT was certainly easy to find on the exhibit floor, with numerous vendors featuring RFID tags, beacons and other “smart” connective solutions among their wares. But the IoT technology displayed at NRF mostly served as an enabler for inventory awareness, personalization, or other important aspects of the larger seamless shopping experience.
This actually bodes well for the long-term viability of IoT in retail. Rather than jumping on IoT as a buzzword, retailers and vendors are waiting for a use case (or cases) to fully develop so it can be properly leveraged. In all likelihood a future Big Show, maybe even NRF 2017, will go down as the “Year of IoT, but in a much more meaningful way.
Pottery Barn Kids has babies on the brain
Pottery Barn Kids is looking to attract more new parents by unveiling its first nursery collection.
The new collection is designed in collaboration with celebrated celebrity stylists and fashion design team Emily Current and Meritt Elliott. The collection includes the XO Nursery that features a glamorous black and white color palette, graphic prints and patterns and bold accents. The Star Nursery features dreamy pink and neutral colors with layers of soft denim and gold accents.
“We love creating little magical worlds – whether it be designing our clothing line, styling a fashion editorial, or decorating our own homes. With our first nursery collection for Pottery Barn Kids, we wanted to evoke an environment that felt sweet and playful for baby, while remaining stylish and relevant for parents,” said stylists and designers, Emily Current and Meritt Elliott. “We designed two rooms, one in soft pinks and golds, and the other, a bold black and white. We mixed classic elements like scattered stars, circus stripes and graphic hearts with touches of shiny gold and lived-in denim — and added whimsical details throughout: an arrow serves as the base of a floor lamp and a woven hamper boasts kitty ears. We are drawn to anything that feels nostalgic, and like to balance vintage-inspired elements with newer, unexpected pieces.”
The exclusive collection has over 80 pieces of nursery furnishings and accessories, including furniture, bedding, lighting, wall décor, decorative accessories and storage.
“The Emily and Meritt for Pottery Barn Kids collection is the first collaboration for Pottery Barn Kids designed exclusively for nursery,” said Sandra Stangl, President, Pottery Barn Brands. “The new collection brings Emily and Meritt’s beloved fashion sensibility to chic yet functional nursery essentials.”
To celebrate the launch of the collection, Pottery Barn Kids will host Nursery Style Events at Pottery Barn Kids stores nationwide on Jan. 23 from 4 p.m.–6 p.m. Guests who visit their local Pottery Barn Kids store will enjoy free registry and design advice, a special offer of 10% off purchases made during that event (excluding furniture), and a goody bag including an Emily & Meritt-inspired gift. Customers can also enter for a chance to win a $500 Pottery Barn Kids gift card.
Emerging Trends in Customer Experience for 2016
2016 will be a year when many niche innovations in customer experience will become mainstream as consumers expect more out of their shopping experiences, forcing traditional retailers to step up or risk becoming irrelevant. Marketplace buzzwords and emerging trends, such as personalization and seamless mobile access, will become table-stake elements of the customer experience.
Here are ways retailers will take their customer experience to the next level:
For personalization to become more than a buzzword, tailored offers must become the norm in digital customer interactions. Consumers are getting over the “creep factor” of brands knowing their preferences, and they are more willing to share personal information in exchange for benefits.
Loyalty programs will continue to become more robust as a result. Seventy percent of consumers modify when and where they shop to maximize points, so retailers can leverage that information to drive even more traffic and sales. Providing tailored offers effectively establishes an on-going dialogue, and reinforces the one-on-one connection that keeps customers coming back. The convenience and curation aspects of a “just-for-you” approach gives brands an opportunity to show that they know their customers. As the technology behind customer behavior tracking, personalized offers, and more sophisticated loyalty programs becomes more affordable, we expect to see many more retailers adopt these capabilities to keep up with the competition, particularly more traditional brick-and-mortar retailers like grocery and drugstores, which are facing increasing competition from online players.
Self-service mobile payment is appealing for consumers because it’s convenient and can provide offers, personalized content and discounts, letting purchasers maximize their relationship with the brand. As comfort with the security and reliability of mobile payment platforms increases, we expect it to become fully mainstream among retailers in the near future.
With the rise of wearables, the mobile wallet, and increased spending on mobile, more brands will provide seamless payments to capitalize on this. The success of apps like Uber or Starbucks Mobile speaks to the importance of integrating consumers’ experiences into their daily routines, and that users are becoming even more reliant on technology to facilitate their lifestyle.
Customization of Mass
From a retail perspective, the mindset and model for mass production and consumption is shifting. Traditionally perceived by consumers as expensive, niche, and inaccessible, customization is becoming a way for people to co-create and engage with their favorite brands. And it’s a move that benefits both brand and user. From a brand’s perspective, customization is a marketing tool, loyalty builder and new source of profits.
For retailers that provide customization services in-store, such as Pottery Barn Kids’ on-site custom embroidery or New Balance’s custom shoe design lab in its Fifth Avenue flagship, it’s a new way to create a unique destination experience. Allowing customers to design their own products creates a deep sense of brand loyalty, while justifying higher prices and providing data that can reveal trends for product R&D.
Retailers in the food space will increasingly feel pressure to conform to a customization model. McDonald’s has begun the shift towards customization with its new concept stores, like its open-kitchen McDonald’s Next in Hong Kong, or its installation of digital kiosks in Canada, the U.S. and Europe for consumers to create custom burgers. The fast food giant’s digital kiosks in France resulted in customers spending an average of about 30% more per transaction than traditional stores.
Mutually Beneficial Partnerships
We’ve already seen strategic partnerships across the retail marketplace, and we expect to see more this year. These relationships create a halo effect for both businesses. Brands aligning with those that have similar values and target customers is the story-building exercise that expands the reach of both. The results?
• A boost in awareness and brand perception (H&M x Balmain);
• A gain in relevance with existing customers and access to new shoppers from a different channel (West Elm’s partnership with Etsy);
• A powerful tool for entrance into new markets (Herschel’s collaborations with Apple and J.Crew’s Crewcuts);
• Alignment with social causes, business ventures or lifestyle ((PRODUCT)RED’s alignment with Nike, Gap and Armani; J.Crew’s In Good Company fashion incubator for entrepreneurs); and
• Tech-enabled, more rewarding and convenient experiences (The Westin’s partnership with Uber on its SPG program).
In 2016, brands will move beyond gimmicky experiences, and instead create multi-purpose spaces that act as a physical hub for consumers to engage with the brand beyond transactional events. Classes or tutorials featuring the brand in-store provide an emotional benefit to customers, and the exclusivity aspect can foster affinity and belonging.
We’ve already seen successful executions by brands like Frank & Oak, which sells coffee and houses barbershops in its locations. These spaces are successful because they create a lifestyle-based community, elevating the offering itself and value perception.
There’s a drive, with Millennials in particular, for consumers to live more purposeful, simplified lives, which puts pressure on companies that make and sell high-cost, low-usage goods like luxury formalwear, sports equipment and cars to convince consumers to invest in their products.
We’ve seen a boom in start-ups that facilitate the sharing economy — from AirBnB to Rent the Runway — which have challenged traditional models. The sharing economy is poised for strong growth and further scale, as these businesses continue to serve a greater social purpose and boost convenience for consumers. The next frontier will be for hard good makers and retailers to anticipate how their single-ownership model will evolve and how they can avoid being another casualty of innovation. In the long run, companies that trade in expensive, low-use hard goods will have to develop new models for shared ownership and/or usage of their products — as Avis and others have begun to do.
Inclusiveness and Next-Level Transparency
Brands like Everlane have forced a new kind of transparency by openly sharing pricing and production practices, including inviting the public into their manufacturing process using Periscope and Messenger.
In the food category, there’s a new push for brands to keep it real. Hyperawareness of food quality and expectations in food transparency are rising as people look to make healthier, more environmentally friendly choices. It’s no longer an artisanal craze or an exclusivity play — consumers understand the impact of what they eat, and want to make sure it’s net positive. Whole Foods Market and Starbucks were founded on this positioning, not only by sourcing fair-trade and organic/natural food, but also educating their customers about why it’s important. As consumers become more educated, they will expect legacy grocery and restaurant players to follow suit.