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POV: 7 Takeaways From NRF 2023 - Retail’s Big Show

Alice Chan Jan 19, 2023 8:50:44 AM
7 Takeaways From NRF 2023: Retail's Big Show.

As I look back on Zippin’s first in-person NRF attendance since 2019, it's interesting to reflect on the shifting macro trends and the topics top of mind for retailers. One thing is clear: in-person events are back with a vengeance and people are hungry to interact in real life and get hands-on experience in the physical world.

1. Brick and Mortar Is More Important Than Ever

I was able to listen to a handful of great keynotes from industry leaders, including Macy’s CEO and chairman, Jeff Gennette, Wholefoods, CEO Jason Buechel, and Petco’s CEO, Ron Coughlin. One theme kept recurring: brick-and-mortar isn’t going away, and in fact, it is more important than ever with consumers viewing in-store experiences as a core part of the buying journey, even when the transaction may ultimately be executed online. The diaspora of people out of urban centers has also led to new concepts like Petco’s new rural Neighborhood Farm & Pet Supply stores which launched last summer. 

For us at Zippin, this only encourages us to double down on our mission to accelerate the adoption of checkout-free retail everywhere. One thing is certain, consumers want frictionless, efficient experiences. From BOPIS (buy online, pick up in-store) to contactless payments and the elimination of lines.

2. We are Moving Towards an Investment Economy

Charles Schwab Chief Investment Strategist, Liz Ann Sonders, shared that the next long economic cycle will be one of investment and capital-driven expenditure, which is great news for companies like Zippin looking to drive big shifts in core infrastructure and operational approaches. We have been experiencing a long cycle in a services-driven economy, with the exception of the blip of 2020/21 where we saw a switch back to a goods-driven economy. Sonders predicts this is slowly shifting to investment and that will be good news for the economy with less acute swings driven by consumers' discretionary spending. Did you know that today consumer spending accounts for 70% of the US economy?

3. Owning the Customer Journey End-to-End is Crucial 

Large organizations, from retailers like Petco to payment providers like Paypal, are working incredibly hard to own the customer journey through the entire lifecycle. The advantage for the consumer is ease-of-use, pre-populated information, recommendations, and intelligence on what to buy, while the advantage for the retailer is ultimately a greater share of the wallet gained by leveraging valuable data. 

Petco has recently made a shift from being a pet food and goods retailer to a health and wellness center offering veterinary service, food, products, grooming, and more. Its CEO,  Ron Couglin, pointed to the advantages this offered. For instance, by having access to vet records, the groomer can use the correct products for a skin condition, and the retail associate can point out a specialty food. 

One advantage of deploying checkout-free is a complete and holistic understanding of the shopper’s behavior in-store from the entrance to the exit. It’s easy to imagine a scenario where this data is married with online insights for a more complete picture.

4. The Labor Shortage Is Making Life Better for Employees

One topic that came up time and again is the tight labor market and its impact. Sonders pointed out that this is not unique to the U.S. and is happening globally. With many geos experiencing population decline, this is only going to be exacerbated over the next decades. It’s been a long time coming for labor to have the upper hand, and if the pandemic showed us anything it’s that frontline workers aren't prepared to put their lives on the line for low-paid, menial work. 

There is a bigger emphasis than ever before on creating opportunities for frontline workers that encourage them to stay longer in their jobs and attract new talent. Whole Foods CEO, Jason Buechel, pointed to education programs that teach skilled trades like butchery, being a fishmonger, and cake decorating, along with an increased average wage of $20/hour. Petco’s Coughlin noted that when he heard from an employee she couldn’t afford to start a family while working at the company, he set out to address that immediately.

We see this as an enormous opportunity for solutions like ours, as ambient intelligence does the tedious work that people no longer want to do, instead freeing them up to focus on new roles where they can connect with shoppers in more meaningful and rewarding ways.

5. Retail Media Is Getting Huge

One of the most packed sessions I attended was about Retail Media and its huge growth curve and the opportunities ahead. It’s projected to be a $45 billion market this year and will continue growing by $10 billion a year. While Amazon is dominating the field as of now, with so much at stake, every major retailer is becoming an ad network. Retail media fills a huge need for brands sitting as it does at the intersection of three marketing disruptions: TV ratings are in decline, deprecation of third-party identifiers in digital ads, and the digitization of stores.

6. Regionalization not De-globalization

Macy’s CEO, Gennette, shared how the company has been reducing shipping costs by putting to work over one million square footage of space it owned in regional centers, as well as pulling back on its reliance on Chinese manufacturers. And many others talked about the growing importance of regional centers, including Sonders who was keen to emphasize that we aren’t talking about de-globalization here. It has more to do with spreading risk and not putting all your eggs in one basket (primarily, a basket that was most commonly called China).

7. There Can Always Be Less Friction

This year we were thrilled to showcase Zippin’s checkout-free technology with our partner, Fujitsu, in its highly visible booth. We put up a working Zippin Lane showing the power and immediacy of our ambient intelligence. With the pandemic helping to accelerate the adoption of contactless payments, curbside pickup, and more, it's clear that consumers want things in-store to be effortless and easy. Retailers are looking hard at the future and deciding what to invest in. It’s a no-brainer to create checkout-free stores with the myriad of benefits they bring, including one superpower: the ability to reduce shrinkage significantly. More on that soon.

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