Blazin' Innovation

Last month's NRF Convention & Expo confírms that retail technology activity is on fire.

Earlier this month, I had the privilege of visiting exhibitors at this year's National Retail Federation (NRF) confab in the company of Independent Grocer Network (IGN) member Michael Avella.

Mike owns a restaurant in Mattituck, N.Y., Love Lane Kitchen, and is in the process of building a grocery store in an adjacent building formerly occupied by an A&P.

"My restaurant customers, when they are not eating at the restaurant, eat the same kinds of food at home, so I just want to make it convenient for them to buy that food," he told me during dinner the evening before at Maialino — the newest restaurant from the owner of The Gramercy Tavern, where I enjoyed a wonderful meal with Mike; his wife, Patti; and Maialino's newest chef, Abraham Flores, along with Mike's eagle-eyed observation of prosciutto making its way through a $25,000 hand-turned slicer!

But I digress. With plans to ramp up sourcing from local farmers and vintners from Long Island's 40-plus winemakers, Mike was all about technology at the NRF Convention & Expo. Now, as a journalist who has covered technology for more than 15 years, I'd like to think I ask some good questions during my booth visits. But I'm always amazed at the depth of the conversation when a retailer enters a vendor's booth — especially a retailer who's actively looking to invest in new technology.

And clearly, Mike knows his stuff when it comes to technology, having been a tech executive on Wall Street for 20 years before his retailing days. So it was a special treat to see the various innovations through his eyes. In coming months, you'll see some of the results of our booth visits when we feature his new store — and some of the technology he deploys — in an upcoming issue of Progressive Grocer Independent.

And, for those of you attending the National Grocers Association show this month, I'd love to tag along on a couple of booth visits to get your perspectives on the various suppliers' offerings as well.

In the meantime, I'm sending Mike an in-print shout-out for allowing me to shadow him so I could better understand the experience of shopping for new solutions at a major trade show in real time from a retailer's perspective.

Following are some other show highlights that caught my eye …

Target's Targeted Merchandising

For the past several years, Target Corp. has experienced tremendous improvements in sales and profits by leveraging DemandTec's price optimization solutions.

This success has led the Minneapolis-based retailer to explore a shopper-focused analytics approach to merchandising. "Everyone at Target could tell you about our most common shopper," says Shelley Hyytinen, VP of merchandising process and system development. "However, while speaking to a common shopper profile simplifies our ability to do effective mass marketing, it doesn't really drive specific business objectives. Because of the diversity of our shopper population, it's challenging to us to understand what influences their shopping decisions, and even more challenging to translate these insights into meaningful actions by merchants when it comes to product, price, promotions and presentation."

To accomplish this, Hyytinen planned to incorporate science into the art of merchandising, essentially combining shopper data, market data, the business knowledge of Target's merchandisers, and science.

This was where DemandTec's partnership with Target began to pay off, she says, noting that the San Mateo, Calif-based vendor's tools "put user-friendly software on top of scientific algorithms that generated optimized decisions with predictive solutions."

Target applied this integrated methodology to drive its merchandising decisions, by, for example, finding an opportunity to increase its relevance to shoppers who have adopted healthy lifestyles, which was accomplished by tailoring its assortment in certain product categories to address these shoppers, and then expanding the exposure of these categories in stores with the greatest potential.

"Through the use of DemandTec's analytics and insights, we are seeing early wins," explains Hyytinen. "When making assortment choices, we're making better decisions about item additions and deletions by using the incrementality logic built into DemandTec's assortment optimization tools. By using price optimization, we're able to adjust pricing within product demand groups to drive improvements in sales and margin without eroding price perception. And we are counting on the use of insight center reporting, shared with our vendor partners, to unleash new insights that will drive new product offerings customized to our strategies and our shoppers."

Mobile Blueprint 2.0

The fast growth of mobile adoption in retail has driven the NRF's release of Version 2.0 of its Mobile Blueprint, which provides updates to the original document published this past July by the Mobile Retail Initiative (MRI).

MRI brings together the collaborative strengths of NRF's IT standards division, ARTS; digital division, Shop.org; marketing division, RAMA; and the trade organization's CIO Council to provide the retail industry with guidance in the successful use of mobile in marketing, commerce and internal operations.

"A number of new companies contributed to the second version," says Richard Mader, executive director of ARTS, who chaired the effort. "Each company provided additional perspectives to make the blueprint the comprehensive guide to mobile in retail."

Among the highlights of NRF's Version 2.0:

• A revised executive summary describing the latest mobile retail trends and applications of value, along with a maturity model that forecasts how mobile will continue to affect the business of retailing.
• A significant improvement to the mobile payment section that describes more than 35 alternative payment methods, the potential impact of mobile on chip and PIN (EMVco) security, and the expected growth in the number of NFC contactless phones enabling expansion of the use of mobile wallets.
• An expansion of the operations section to describe new mobile POS applications, including digital receipts, that holds the promise of mobile self-checkout.
• A revised Implementation Strategies section that describes how cloud computing and other new technologies can accelerate implementations of secure mobile services and drive down costs.

The new blueprint, which, according to NRF, contains the best thinking of more than 30 companies, will be one of the foundations for MRI educational webinars and conference tracks throughout 2011.

The Mobile Blueprint Committee comprises representatives from 39 retail and industry partner companies. For more information anda complete list of participating companies, visit www.nrf.com/ mobile.