Best of NRF 2022: Top 10 Takeaways

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Based on a publication in Retail Info Systems, Best of NRF 2022: Top 10 Takeaways.

Lo mejor de NRF 2022: los 10 mejores para llevar

Back together again! NRF’s annual Big Show can be overwhelming any year ― so many people to see and places to be ― but at a time where the retail industry was finally reunited, you’re bound to have missed something. Never fear, every year readers check in with RIS to see what retail news, trends and sessions were vital to the industry and to catch up on what they might have overlooked. The following are all the top takeaways from The Big Show 2022, presented in 10-not-to-be-missed highlights.

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The 2022 Big Show Kicks Off

Despite any concerns over the omicron variant, NRF’s three-day retail event kicked off with a full keynote session hall. NRF president and CEO Matthew Shay expressed how grateful he was to “see all of you here,” as he sat down for a chat with Target board chairman and CEO Brian Cornell, the recipient of The Visionary 2022 award.

Shay looks out over crowd
NRF President and CEO Matthew Shay expresses how grateful he is to see a packed keynote audience on day one. Photo credit: Jamie Goodman.

Cornell noted that customers returned to physical shopping over the holidays and were out there enjoying what retail can provide, as he shared his thoughts on Sunday, January, 18, as the show opened. “We feel more optimistic than we probably did six months ago about where we are, but we’re still living with COVID,” he said.

In 2022, focus on agility, adaptability, and flexibility will continue to be as important as ever and retailers need to anticipate and adjust as needed, he said. Staying close to the consumer will also be important. “Each day we’re going to have to listen to consumers,” to flex and adjust. Listen, learn, adapt, and be flexible, he advises.

Discussing the investments that Target made in its team, stores, and fulfillment network, Cornell said that in the beginning these ideas weren’t well received, but they were important during the pandemic. The investments and fulfillment capabilities Target has developed, these habits will be sticky going forward.  “It’s not either or, it’s an ‘and.’” Even during the pandemic, customers have gravitated toward both the store and online orders and contactless fulfillment.

Target CEO
NRF President and CEO Matthew Shay sat down with Target Board Chairman and CEO Brian Cornell for the opening keynote. Photo credit: National Retail Federation.

In the store, Cornell predicts the “ability to find one location where you can consolidate shopping will be an important feature for many of us going forward.” Therefore, he says, partnerships (such as Target’s with Ulta, Disney, and Apple) will be so important.

Touching on supply chain issues, he noted “short term, the best thing we can do is share data” as we wait for investment and infrastructure to make changes. He also predicted that inflation is going to change shopping patterns this year. As gas prices rise, people will «drive fewer miles [and] consolidate the number of locations where they shop.» They might also look at private label brands as an alternative. “We have to anticipate that some of the historic ways people react to inflation will play out again in 2022.” Retailers are there to service the consumer.

“Ultimately consumers get the vote with their wallets and their footsteps,” he said. “We’re going to learn a lot about how the consumer reacts in the next 60-90 days.” Part of being adaptable is to listen and react.

As the keynote took place, down in the Javits Center, lobby staff adapted to new safety procedures for attendees by checking for proof of vaccination on-site, providing attendees and exhibitors COVID-19 self-tests and masks, and offering a mobile PCR testing unit.

Eye-Catching Booths

On the show floor there are always a few standout booths displaying dazzling tech to attendees. While robots took the stage this year (see video below)Samsung’s booth once again offered an array of gorgeous digital screen solutions to impress show attendees.

In addition to screens, such as its digital signage stretch display, its indestructible mobile solution for retail was on display, the Samsung Galaxy XCover Pro smartphone — the one Walmart gave to 740k employees. The phone offers both work and personal sides, sandboxed off from each other so retailers can’t access associates’ personal data. Samsung partner Sprinklr was also on hand, displaying its new app that can be downloaded to Samsung digital displays, giving retailers a way to connect social media content to in-store screens. The feed can provide live social data, such as local trending social data, and a social command center where employees can see ratings and comments. It also provides a way to bring all of the good content brands are posting online, into the store.

FastSensor was in the booth as well, showing off how its tech gathers, analyzes, and delivers foot traffic analytics and engagement metrics from physical spaces. As shoppers move about the store, it collects data to see things like who’s really engaging or browsing. Then the tech can customize content on Samsung screens inside stores based on the engagement profile of the customer in front of the screen.

Salesforce was also back at NRF with its signature camping-themed booth, where attendees could gather to learn about the company’s retail tech solutions. Digital signage company Crown TV showcased how it wants to help retailers bring NFTs into stores. The company’s solution enables retailers to display an NFT they own or any NFT publicly available on OpenSea, an NFT marketplace. Users can display additional information like the price, provenance, description and a QR code that retail shoppers can scan to purchase the NFT on their phone right from the store. Also on display, Hanwha Techwin’s ACO A5 automated checkout solution, which it’s now bringing to the United States, eliminates the need for manually scanning barcodes. Consumers or associates can simply slide the groceries through the scanner — it detects when an item doesn’t have a barcode — and check themselves out once they’re done.

Hot Topics:  Supply Chain & Sustainability

One of today’s most significant issues surrounding the supply chain — and one that will be accentuated for the next several years — is its effect on optimizing profitability within e-commerce, Hilding Anderson, head of retail strategy, North America at digital consultancy Publicis Sapient, told RIS News. “Most retailers even today are actually losing money in e-commerce,” he said.

This is often driven by the supply chain and the fact that retailers haven’t optimized it for today’s new model of selling, he said, as well as failing to take advantage of certain incremental data monetization strategies.

To navigate these challenges, some retailers are embedding data and artificial intelligence more aggressively into their platforms in order to improve their inventory management and predict how much they’re going to sell in one store or across the entire fleet.

Fulfillment optimization is also a key component of this, but many of today’s retailers lack the right systems to make informed decisions, said Hilding. With the right technology, retailers can choose intelligently and even anticipate the most efficient and cost-effective location to ship items, whether that’s from their warehouses or stores. This kind of visibility will be crucial to continued success in the retail landscape ahead.

Retail Leadership in Action 
Walmart U.S. president and CEO John Furner pointed to the value of both measuring progress and partnerships when it comes to advancing sustainability initiatives. Rather than trying to solve everything within this daunting task, the retailer is focusing on a few significant goals, such as moving to sustainable sources of energy.

“This is something that we need to do together, and we’re going to have to do together,” he noted in a fireside chat with NRF’s Shay. “This is bigger than any one organization, one company, one country.”

presenting
Albertsons Companies CEO Vivek Sankaran in a fireside chat with Sara Eisen, co-anchor of CNBC’s Closing Bell. Photo credit: National Retail Federation.

Earning Customer Loyalty
Albertsons Companies, a food and drug retailer that operates stores across 34 states under such banners as Albertsons, Safeway, Shaw’s and Acme, has grounded its ESG agenda around climate change, circularity, food waste reduction, and community impact.

“In food waste, it’s one of those things where if you get really good at it, it’s not only good for society, but It’s also really good from a cost standpoint. And right now, we’re focused on what we can do within our food chain,” said CEO Vivek Sankaran in a fireside chat with Sara Eisen, co-anchor of CNBC’s Closing Bell.

The company is currently deploying a solution developed with a partner that uses artificial intelligence within its fresh products category that’s reduced both inventory and shrink. As this moves forward, Sankaran expects the technology will enable the grocer to start working with its suppliers further back in the supply chain. “We have a really good demand signal on what we need in fresh and can start taking that backwards.”

At the end of the day, this commitment to reducing food waste is good operational thinking that’s going to help make a big difference to society, he noted.

When Climate Becomes a Business Imperative
IKEA U.S. CEO and chief sustainability officer Javier Quiñones took to the main stage to discuss the retailer’s commitment to sustainability and the real-world steps the global furnishings and home goods giant is taking to reduce its economic impact.

Quiñones joined the company in 1997 as a part-time worker and remembers having to attend sustainability training as part of his onboarding. “IKEA has been involved in sustainability for decades,” said Quiñones. “It is part of our DNA.”

With a long-standing and engrained commitment to lessening its environmental impact, it makes sense that Quiñones plays the dual role of CEO and CSO. “Combining the CEO and CSO roles was natural for me,” he said. “It is a leadership issue, and we all need to be on board, and that starts with me. It is all about leading by example.”

In retail it is a race to zero, in terms of environmental impact. Quiñones pointed to efforts made by Walmart, H&M, and others as key to a sustainable future, and urged those in attendance to push their sustainability agendas.

To do its part, IKEA has embarked on a number of sustainability initiatives that Quiñones touched upon during his talk:

  • By 2025, all IKEA products will be circular in some way
  • The retailer currently rebuys used furniture to resell/reuse to ensure it doesn’t end up in landfills
  • IKEA has electric delivery vans in operation in NYC currently with plans to scale across the U.S. by 2025

“If you don’t have a strong social agenda, your business will eventually disappear,” Quiñones said. “Less consumers will be willing to purchase from you, and your best workers will leave you.»

Chewy CEO
Sumit Singh, the CEO of pet e-commerce retailer Chewy, joined Bob Safian, host of Masters of Scale, on the stage. Photo credit: National Retail Federation.

Hot Topics: Customer Engagement

Consumer demands are constantly changing. A recurring trend across the industry, however, is that today’s customers have high expectations for services and offerings provided — and instant gratification is always top of mind. So how have today’s businesses delivered customer service that is engaging, builds brand loyalty and also strengthens relationships at both the in-store and digital levels?

Many of today’s top retailers agree that customer engagement as a core in company culture is a must — a conversation piece interwoven throughout many of the sessions presented at NRF 2022. A part of that culture is remembering one thing: customers are human beings, and being treated with respect through thoughtful and personalized offerings can really help strengthen relationships. From providing interactive experiences in the metaverse to simply lending an empathetic ear on customer service calls, consumer engagement is the key to providing differentiated service that survives in an increasingly competitive marketplace.

Balancing Growth and a Customer-Centric Culture
The North Star for Sumit Singh, the CEO of pet e-commerce retailer Chewy, is the speed of innovation and level of customer experience a company can deliver. Singh joined Bob Safian, the host of Masters of Scale, to discuss why, as a leader, he places deliberate attention on building a culture that values creating new innovations with customer needs at their core.

“We try to come at it from a point of view of compassion,” when dealing with customer scenarios in times when customers and team members might be stressed. When you’re dealing with pets, it’s the only category outside of kids where customers refer to themselves as parents, he pointed out. Yet, when an organization grows, how do you maintain that customer orientation and passion? Singh poised the question, do you have leaders who are scaling along with you? Do you have leaders that deeply care about customer service?

Despite scaling, the pet retailer has stayed true to having a human answer customer service calls in four seconds or less and being empathetic when they answer. Chewy also allows customer care workers to stay on calls as long as they want.

“I think a lot of organizations focus on output metrics,” he said. Profit and revenue are output metrics. Organizations should focus on input metrics, such as reviews, in his opinion.

Retailing in the Metaverse
WGSN Insight senior strategist Cassandra Napoli presented a primer on monetizing within the metaverse, noting the maturity of the immersive virtual environment will unlock new economic opportunities that will redefine brand engagement, product discovery, and online conversions, with augmented reality serving as a stepping stone into the virtual experiences.

NFTs similarly were cited as the easiest point of entry for the metaverse, with their potential extending to new retail formats and shopping incentives. All told, the global metaverse revenue opportunity could become $800 billion, according to Bloomberg Intelligence.

The metaverse will be especially impactful for Generation Alpha — ages 0 through 12 — which will be the first generation to grow up in the metaverse and will prefer digital goods to physical goods. “The metaverse is a way for Alphas to experiment with creativity and self-expression, and there’s an economy attached to that,” said Napoli.

Whereas Alphas are playing in the virtual world, millennials and Gen Z are using it to escape from their harsh and/or boring realities, and “for brands and retailers, this provides new opportunities for growth and communication.” (Learn more about the session in this story.)

Staying Ahead of the Curve
In a (virtual) fireside chat with NRF’s Shay, Best Buy CEO Corie Barry detailed the five trends she believes will continue and sit at the core of retail:

  1. Safety matters: Even after two years, safety remains important to consumers, and it’s something that will be defined by each customer.
  2. Convenience: This too is defined by the customer. Barry noted that even though the vast majority of their products can be shipped next-day for free, 40% of what they sell online is picked up in its stores.
  3. Juxtaposition between digital comfort: Both physical and online retail needs to provide amazing experiences for consumers, whether that’s digital personalization or experiential retail.
  4. Employee control: Today’s employees want — and have — more control over their jobs, including through their benefits, career path, pay structure, or professional development.
  5. Data as the new currency of the future: Today’s retailers have access to so much rich data around how they can inspire customers, as well as support them by continuing to refine customer experiences and know them better than any other seller.

The Art and Science of Merchandising
To kick off the final full day of the Big Show, Nordstrom’s president and chief brand officer Pete Nordstrom took to the main stage (virtually) to provide an update on the iconic department store’s latest merchandising efforts.

To keep pace with changing consumer demands, the retailer has been relying on a host of new- and old-school approaches to pinpoint the categories and products its customers’ desire. “We have always had a broad assortment,” said Nordstrom. “We have been able to be flexible and provide customers what they are most interested in. A big part of the job is acquisition, we need to continue to get younger shoppers engaged with the brand.”

Two big product categories Nordstrom has entered into over the past few years to keep place with consumer demand are branded sportswear and home goods. Late last year, Nordstrom partnered with Fanatics to expand its branded sports apparel business. On the retailer’s website, shoppers can search for thousands of SKUs from their favorite professional and collegiate teams.

“Clearly our customers buy that stuff,” Nordstrom said. “The idea was to offer it without it becoming a burden on our merchandising team. By partnering with them, we don’t have to own all those SKUs.”

On the home goods front, Nordstrom is building a tailored assortment designed to attract impulse buys from their core customers. “Home is such a broad-based business with a lot of competition,” Nordstrom said. The key to success for the department store retailer in the crowded marketplace is understanding its customers and building a home assortment based on their unique style and demand.

Leadership Lessons on Ruling Retail
To close out the final day of NRF 2022, a trio of retail CEOs combined for the “Power Hour: Leadership Lessons on Ruling Retail.” The chief executive officers from WW International, Stitch Fix, and Old Navy spoke to the crowd about their latest initiatives and how they are leading their respective companies through the uncertain retail landscape.

CNBC’s retail reporter Lauren Thomas played the role of host and moderator, interviewing each of the CEOs starting with WW’s Mindy Grossman.

Since Grossman took over as chief executive in 2017, she has overseen major changes at the subscription food business, most notably changing its name from the iconic Weight Watchers to simply WW.

“Transformation is not for the light of heart,” she said. “It requires large wholesale radical changes, but the results are powerful.”

In addition to overseeing major marketing and branding changes, Grossman has also been at the helm of the preverbal ship as it traversed the dangerous COVID waters. In addition to its food sales business, a huge portion of WW’s revenue streams from thousands of live events it hosts around the world every week. During the height of the pandemic, WW was forced to find new ways to connect and engage with their members, including virtual meetings.

“Whatever we do has to give people the ability to live the life they want and get healthy at the same time,” she said of the company’s ability to pivot and continue to meet its members’ needs.

Following Grossman’s talk, Stitch Fix’s CEO Elizabeth Spaulding was next to the stage to discuss the thriving apparel subscription brand. Spaulding has been in the corner office for six months and was drawn to Stitch Fix because of “the power of data science that is changing the data landscape. And helping our clients feel more attractive and be their best selves.”

One of the biggest shifts Stitch Fix has undertaken under Spaulding’s leadership is customers’ ability to make a purchase without being a subscription client. Prior to this pivot, only members were able to purchase individual items from the retailer — now that capability is open to all.

While Stitch Fix’s assortment is now available to everyone, it still maintains its data-focused approach. Whether a customer is a subscription member or a one-off customer, all content and offers are tailored to their particular style and needs. “Our whole model is built on understanding the customer and meeting the customer in the moment,” said Spaulding.

Following Spaulding’s comments on the future direction of the disruptive Stitch Fix, Old Navy president and CEO Nancy Green was next up in the interviewee chair. Green, like Spaulding, is fairly new to the CEO gig, having claimed the top spot around two years ago.

One of her biggest initiatives since joining the brand has been overseeing Old Navy’s development and launch of its expanded plus size line.

“We were not the best at serving all sizes and shapes in the past,” she said. “We always had a plus size business, but it was small and always seen as a side thing.”

One of the biggest challenges from a customer engagement perspective in the plus size market is pricing. Traditionally plus sizes cost more than standard sizes for the same product. Old Navy’s new plus size selections cost the same as its standard size offerings.

In conjunction with the new business segment, Old Navy has launched a training program to inform associates on the new approach. «We give associates training on the new products, being body positive, and how to best resonate with customers.»

Walmart U.S. President and CEO John Furner
Walmart U.S. president and CEO John Furner pointed to the value of both measuring progress and partnerships when it comes to advancing sustainability initiatives. Photo credit: National Retail Federation.

Hot Topics: Retail and CG Workforce

With companies across the globe facing labor shortages during what has been coined “The Great Resignation,” it’s more important than ever that today’s businesses ensure a workplace culture that is inclusive, promotes growth, and provides a collaborative and innovative environment. What do today’s retail employees look for? The topic was addressed at length during NRF 2022, with DEI, transparency, and valuable amenities like work-from-home flexibility at the forefront.

Recruit, Advance and Retain: Scaling DEI Efforts inToday’s Market Landscape
James Rhee, founder of advisory firm Red Helicopter, helmed a keynote session with James Fripp, chief equity and inclusion officer, YUM! Brands; Sharon Leite, CEO, The Vitamin Shoppe; and Paige Thomas, president and CEO, Saks OFF 5TH.

As each panelist spoke to personal experiences, Leite revealed she will be on an episode of Undercover Boss this Friday, Jan. 21, displaying when she went “undercover” to experience how her new operational changes and innovations are impacting the front lines. Leite said she got to know store associates on a much more personal level, and learned what they deal with at work and at home and how that makes them who they are — and what that means in terms of engaging with customers.

“It really taught me the importance of taking the time to really ask the questions the next layer down, to be curious, and to really take leading with empathy to the next level,” said Leite.

Rhee noted sometimes we overthink DEI and it can be just about slowing it down. He then moved the conversation onto the topic of women. Thomas noted she tried to think about what women are dealing with during the pandemic and it was very overwhelming.

“I do believe that’s sort of what’s guided a lot of our conversations,” she said noting “I want to hear about this from their point of view, not from my shoes because I’m not facing the day to day.” In this vein, she said Saks OFF 5TH did surveys and roundtables with associates, which led to the company instituting a formal hybrid work environment. Fripp agreed, noting that one of the things really working for YUM! Brands are its employee resource groups.

The key to Best Buy’s current and future success hinges upon an engaged workforce, Best Buy CEO Corie Barry noted during her session, which means that not only are they prioritizing meeting the needs of their customers, but also their employees, vendor partnerships, and communities.

“In order to create that healthy Best Buy of the future, we believe strongly in a balanced approach between our constituents,” she noted, which translates through their diversity and inclusion initiatives, showcasing the R&D work of their vendor partners, and helping the communities in which they operate thrive.

“It’s constantly trying to listen to that voice of the customer, voice of the employee, voice of the partner, voice of the community, and always pivoting and really trying to take action on all those fronts.”

Barry foresees a disruptive labor market for a protracted period of time thanks to the myriad reasons people are choosing to make job and career changes, including a lack of childcare access and an increase in remote opportunities. She’s currently working with her teams to avoid trying to solve for perfection in six months or a year, but instead using the information and resources at their disposal in this moment — while incorporating flexibility and a focus around the customer — to build their models, and then adjusting as necessary.

“Those that will thrive are those that are willing to embrace this constantly changing environment and actually double down on their differentiators throughout this time period and pivot as the economy, as inflation, as the labor market, as the supply chain, and as the overall consumer sentiment also pivots.”

Walmart’s Furner emphasized during his session the importance of transparency surrounding its diversity and inclusion initiatives. The retailer reports progress biannually, with its most recent report stating that almost 56% of new hires are people of color and 44% of promotions to management were women, said Furner. Of these promotions, 39% were people of color and 18% LatinX.

“Pick a goal. Find a way that you can measure it,” Furner advised. «The things that we measure are the things that tend to improve. Pick something where you can make a difference…Our businesses should be the very best of who we are and of our customer base.»

Innovation Lab 

Once again, The Big Show’s Innovation Lab was packed with the next big thing from more than 55 visionaries who were on hand to demonstrate and discuss the latest developments in retail tech. From software and robotics, to drones and autonomous vehicles, the floor gave inspiration from cutting-edge ideas.

This article was originally published in Retai Info Systems


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