To Survive, be Culturally Relevant, Commercially Aligned, Tech-Enabled

Despite what the Chicken Littles of the industry might cry out, the sky isn't collapsing on retail. That was the message during Retail’s Big Show this year, put on by the National Retail Federation (NRF) and held Jan. 14-16 at New York’s Jacob K. Javits Convention Center.

In fact, retail is still a growth industry – with U.S. sales up 3.5 percent in 2017, according to Rod Sides, retail, wholesale and distribution leader at research firm Deloitte LLP, during a day-two keynote presentation. Things are changing – the rise of the digital influence factor, and how the consumer works with technology (side note: the average consumer checks his phone 46 times a day – what would it look like if grocers could get their customers to check their sites just as often?). But retail is still on a growth trajectory.

Research from mobile computers, barcode scanners and barcode printers supplier Zebra Technologies backs up this projection: The company, in partnership with IHL Group, developed and presented the "2017 Retail Transformation Study" on the floor, showing that the North American retail market is expected to grow 3 percent over the next five years, and that 2017 saw more retail store openings than closures, with the same anticipated through 2021.

So, what advice do industry observers have for grocers seeking to ride this growth rather than fall behind?

“Be culturally relevant but commercially aligned,” said James Curleigh, president of apparel brand and retailer Levi’s, in the first day’s opening keynote. “Too many businesses get an A in culture but an F in business.”

You also must work “ridiculously” fast, be an all-star recruiter and be obsessed with product, said Dan Levitan, co-founder and partner of venture capital firm Maveron, during a panel that followed the day-one opening keynote. And possibly most important: Balance the brain and the heart. Grocers that are all heart never reach scale, and ones that are all brain never make their way into customers’ lives.

Also, don’t force employees to play a role, said Manish Vora, co-founder of the Museum of Ice Cream, an interactive art gallery with ice-cream- and candy-themed exhibits, during the panel. Have them be themselves – build around their talents and diversity.

But one can't argue with investing in the right technology to improve the in-store experience and operations.

“The key growth drivers in retail are multichannel retailing, in-store connected technology and connected store associates,” said Jeff Schmitz, SVP and chief marketing officer of Zebra Technologies, regarding the report. “It is critical that retailers continue investing in the shopping experience and operational efficiencies. Understanding the retail transformation underway allows retailers to invest in the right technology now to meet the evolving demands and needs of their customers and ultimately earn more of their business.”

Interesting Solutions

Although many exhibitors and their technologies on the floor provided a glimpse of where retailers should look to invest to position themselves for the future, a certain number of those – arguably more than previous years in recent times – positioned themselves well for grocery, including:

• Digimarc Corp., which presented its new Digimarc Barcode for Thermal Labels, which allow for scanning even when labels are ripped, creased, smudged or damaged. They also encode GS1 Application Identifiers for fresh food, so retailers can dynamically adjust pricing on soon-to-be-expired fresh food items or sell them at discount instead of discarding them as shrink.
• PCMS, which debuted Personalized Offers, a cloud-based solution that helps grocers create engaging, customized marketing to inspire consumers to shop. Retailers can personalize the shopping journey by uniquely identifying each customer to apply rich consumer insights, make marketing campaigns more effective and influence consumers’ purchase decisions. Inside the store, Personalized Offers trigger location-based promotions, including push notifications on a mobile app for digital coupons and exclusive offers. Outside the store, they can be easily integrated with social media platforms to issue offers to customers based on their activity on these sites.
• Symphony Retail Ai, which showcased CINDE, a digital analytic assistant designed to receive natural language input from users and provide conversational answers – a sort of Alexa for grocery executives. CINDE provides answers to highly detailed questions through the use of deep analytics, data mining and immersive visualization into stores at department, planogram and product levels. Because of its contextual intelligence, CINDE will serve that information using the most appropriate visualizations to give holistic insights for actions that can or should be taken.
• Extreme Networks, which presented its newest contextual guest engagement networking solution, Extreme Guest, which enables IT teams with such strong business benefits as in-store wireless solutions to connect and engage with patrons; guest demographic analytics to create personalized guest engagement; granular location-based data of guests and associates, connecting guests with associates more quickly or sending location-based offerings to in-store guests; and more.
• Panasonic, which showcased, among its solutions, a solution made of special glass that serves as both a transparent screen while also allowing for high-contrast image projection. A high-contrast light control film is combined with the glass, so the picture can be adjusted to the optimal contrast when installed. Images on par with digital signage can be projected on the glass even in brightly lit environments – such as a grocer's freezer doors –  to display information on new products and sales campaign details. Several screens can also be combined and controlled as a single large-screen system.
• Displaydata, which released Dynamic Central 1.8.0, which features new electronic shelf label (ESL) enhancements for enterprise retailers. The company’s enterprise software, Dynamic Central, now can support 200,000 ESLs per location, allowing the platform to accommodate the large number of ESLs necessary for supermarkets and large-format stores. The centrally managed software platform also includes Flash and Collect and Scan to Position features.
• Aila, whose Mobile Imagers for the iPhone 6S, iPod Touch 6 and iPad Mini deliver a slim form factor and intuitive functionality, giving sales associates the flexibility to go from inventory to clienteling in seconds. They offer omni-directional 1-D/2-D scanning with native image support and software configurability; a sleek, durable form factor that delivers a one-handed experience and portability; charging via Apple Lightning cables. They read all major barcode symbologies, scan a range from 2 to 16 inches, and provide haptic, visual and acoustic feedback.

Eye on Research

In addition to products, a number of suppliers brought their A game to their booths with interesting findings from proprietary research. Some of the results more relevant for grocers include the following:

• Trader Joe’s, Costco and Amazon top a new measurement that’s designed to link consumer preference with a retailer’s financial performance, with the following trailing: H-E-B, Walmart, Wegmans, Aldi, Sam's Club, Sprouts Farmers Market and Whole Foods Market. The Retailer Preference Index (RPI), from customer data science company Dunnhumby, found that the top-quartile retailers share four effective strategies: They're price-focused, quality-focused, value-focused, and price-focused, while also being supported by digital execution. Additionally, the top-performing grocers include relatively recent entries into the 100-year-old supermarket business and are more likely to be national banners.

• Retailers that have undergone digital transformation predict higher revenue growth and greater profit in the next two years, according to a study from Oxford Economics sponsored by SAP SE (check out a video of our interview with SAP's Achim Schneider sharing insights from this research). Some 50 percent of midsize retailers and 44 percent of large retailers expect their revenue to be 5 percent to 10 percent higher next year due to digital transformation. Additionally, more than 50 percent of large and midsize retailers consider speed to market the most important revenue growth driver for the next two years, while investment in digital skills and technology is a priority for the top 100 retailers. All retailer respondents reported that Big Data/analytics is the technology they most heavily invest in today, and when asked about investing in machine learning, a quarter of retailers expect to do so heavily in the next two years.

   

• Food shoppers’ preferences will shrink the role of stores as points of purchase and fulfillment, requiring retailers to focus more on specific categories that allow for the delivery of a superior overall experience, according to new research from data-driven customer analytics solutions provider Precima. Assortment and space strategies should reflect how shoppers value spending their time in stores, and the research shows which categories will shift to ecommerce first and fastest – such as health and beauty care and home care – in addition to the role of meal kits as a complement to prepared foods.