Lessons from the NRF2021: Retail’s Big Show
Chrissie Hanson
2 Febbraio 2021

I’m nearsighted in one eye and far sighted in the other and, glasses aside, I’ve often found that a helpful reminder to consider both the over-arching ambition, and the minutiae of what’s really needed so as to operationalize a goal. The events of 2020 placed that need for dual perspective under intense pressure, and quadrupled. Our dramatic swing to screens big and small as we all moved online en masse for work, school, entertainment, shopping, and health resulted in a multitude of effects, one of the most significant being ECommerce.

Last month, I virtually attended the NRF2021: Retail’s Big Show – the Global Expo held in New York that brings together exhibitors, innovators, start-ups and speakers – to showcase and discuss the challenges and possibilities that will transform business through the lens of retail. The energy, positivity, and hope regarding the impact and lasting effects that the retail industry could and should have in re-energizing the economy was palpable throughout the sessions. But there are lessons to be learnt if businesses and leaders are to truly understand the evolved consumer priorities today, so as to determine what subtle shifts, considered integrations, and widespread overhauls are required to operational models and technologies, talent initiatives, and experience design to deliver sustained growth.

Here are the top learnings on how to empower teams to make better decisions, faster to design and execute more compelling, more innovative, and more connected ECommerce experiences in the year ahead:

  • Lesson 1: See both the forest and the trees to understand people intimately.  
  • Lesson 2: Distraction and unnecessary friction leads to abandoned carts and lost revenue.
  • Lesson 3: Retail is detail, so pay close attention to the details and pursue active attention.
  • Lesson 4: Experiences should encompass expansive Services.
  • Lesson 5: Collapse siloed Category thinking to craft Better Experiences
  • Lesson 6: Culture is local, so understand, respect, and celebrate the differences.
  • Lesson 7: Consumers have set the bar for excellence. It’s set at Safety, Sustainability, Inclusion, and Trust.
  • Lesson 8: Build a bigger bench and then trust the team to collaborate, innovate, and make Better decisions, faster on your behalf.

 

Below are the explanations and sources that led me to arrive at this summation.

 

Lesson 1: See both the forest and the trees to understand people intimately. 

Put another way, this is about simplifying the complex, without ignoring the complexity of deeper consumer understanding. In the session Navigating disruption to drive sustained growth and balanced business objectives, the former CEO and Chairman of PepsiCo., Indra Nooyi, reminded us to ‘remember our first principles of marketing’. While the compression of the timeframe for digital acceleration meant that all ages were suddenly thrust online for work, school, and so much more, our core needs and priorities are fundamentally the same. However, the ways we access brands and products has changed, and the ubiquity of online services has expanded what we have come to expect from brands and the services they provide.

 

Lesson 2: Distraction and unnecessary friction leads to abandoned carts and lost revenue.

We live in an age of distraction, in which our capacity to process information is perpetually under pressure. In the session Making Sense of the Aftermath of Uncertainty, Andrea Bell from WGSN commented on the cumulative effect of social jetlag (the disconnect between our internal, biological, and social clock which distorts our sense of time), the emotional plurality felt as a result of the changing positive and negative news around COVID-19, and the everyday prediction error stress when we go to buy a product online only to then find it’s not available. The impact of these stresses serves to further erode our capacity for active and sustained attention, which in turn results in online cart abandonment rates of between 66 – 85%, depending upon the sector, and data source used.

 

Lesson 3: Retail is detail, and we must pay close attention to the details and pursue active attention.

Retail has always been an early indicator of shifting consumer demands, capturing both the everyday essentials, as well as the sought-after luxuries of life, and showing how consumer expectations might evolve across other categories. In Consumer Behavior Shifts to Online: How to deliver in 2021, journalist and author Miya Knights provided an overview of the innovations that consumers were introduced to in 2020, including BOPIS; click & collect; curbside delivery; traffic light queuing systems; scan and go apps, and explained how our growing comfort and familiarity with these functions will make us more willing to have low-touch experiences when we’re able to go back into brick & mortar stores. The key to omnichannel success is to be functionally flawless, and that means 70% of the focus should be in operations, and 30% in stating the vision.

In Remapping the Customer Experience: A reinvention imperative, Krista Bourne, Verizon’s SVP of Consumer Sales, Verizon echoed the point about innovating around peoples’ needs for personal safety. This led Verizon to gear its strategic ambitions and operations to roll out appointment setting and touchless check-ins, self-serve kiosks, contactless digital payments, and curbside fulfillment. In 2021 the shift in emphasis will be to personalization of connected commerce, that continues to prioritize touchless functionality.

In the spirit of practicing what I preach and keeping the wider marketing forest in view, I am reminded of the body of evidence regarding the Attention Economy. Human attention is a finite resource, and companies should assess every innovation according to its ability to hold the consumer’s active attention, and deliver a positive experience, otherwise it’s simply a cost exercise that did not yield value.

 

Lesson 4: Experiences should encompass expansive Services.

Last year, the companies that thrived were the ones that innovated at speed. They listened intently to customers, they trialed different formats and services, and the most successful NPDs answered previously unmet needs and untapped desires. In Creature Comforts: Serving Consumers’ Desire for Life’s Simple Pleasures, Sumit Singh, CEO of Chewy, the online pet food retailer, explained how their team’s close connection to customers allowed them to pivot quickly and launch a telehealth service to connect to vets and  provide triage to customers in their home. By staying true to their core mission, and knowing their customers intimately, they were able to disrupt the market and create a compelling and sticky experience to answer the new demand opportunity that arose from the increase in pandemic-fueled pet ownership.

 

Lesson 5: Collapse siloed Category thinking to craft Better Experiences

While endless headlines have been generated about the hockey stick growth of Ecommerce, the sheer range of online experiences that all generations have experimented with have made us all naïve experts as regards our omnichannel expectations. In a relatively short space of time, we’ve experimented with online education, spent endless hours working on Zoom, Microsoft Teams and WebEx calls. We’ve trialed and judged half a dozen platforms for TV, film, and news content, signed up to, and cancelled, various subscription services, and assessed different grocery, apparel, consumer electronics, and home supply retailers and can compare and contrast the online differences to in-store and delivery approaches. We’ve seen and felt the speed of innovation and our expectations for excellence have been raised. The watch out here is that we don’t live in category silos. While a brand may choose to focus its competitive analysis and brand tracking on its core competitive set to limit the data points it reviews, marketers should avoid adopting a blinkered vision when thinking about omnichannel experiences and should evolve their measurement approach to account for both a focused and broader perspective to really understand the love consumers have for a brand.

 

Lesson 6: Culture is local, so understand, respect, and celebrate the differences.
The meaningful application of empathy demands an appreciation of culture. That means understanding local market nuances as well as generational advocacy to determine what’s appropriate and what’s not.

In Luxury goes digital: Understanding how Alibaba and Moschino are driving new innovations, Christina Fontana, Head of Fashion & Luxury at TMall Luxury Division explained that the luxury consumers in China are much younger than the rest of the world, which is why self-expression through fashion is such a significant driver of the digital experiences that are delivered. So, whether China is deemed a mature fashion market, rather than a mature one, it demands the energy, entertainment, fun, speed, and events demanded by their younger customers. The broader implication is that when designing product experiences that will resonate with your audience, you must consider what is truly authentic not opportunistic, and this requires great respect and understanding of your audience’s needs, culture, and history.

 

Lesson 7: Consumers have set the bar for excellence. It’s set at Safety, Sustainability, Inclusion, and Trust.

Today, all brands are on a level playing field. 2020 exposed consumers to the widest plethora of ecommerce innovations and opportunities, and the points of comparison have been vastly expanded. Sustainability and commitment may offer extra points of comparison for shoppers deciding where to place their dollars. In How Sustainability is Changing the Retail Landscape, the message from Abigail Kammerzeil, H&M US Sustainability Manager, and Jennifer Keesson, IKEA Sustainability Manager centered around the importance of consistent People & Planet positive practices across the entire supply chain, and how their brands are leading the charge with responsible retail. Both H&M and IKEA are working to reinvent their operational models to reward consumers for their local sustainable efforts, and this was both gratifying and inspiring to hear.

In terms of Safety, the exhibitors at both NRF and CES showed us a future that delivers clean and clinical experiences through touch-less functionality. The smart kitchen tech included the LG Instaview Refrigerator with a UV light in the water dispenser that that kills 99.9% of bacteria, to the Samsung Family Hub refrigerator and Samsung’s Smart Things service that connects the items fridge to the meal planner, to grocery retailers so that when supplies run low, you can get them delivered within 2 hours, if you sync it to DoorDash. As people continue to prioritize their time and attention into high value versus low value tasks, we’ll see levels of trust and familiarity rise for such products, services, and experiences. Those brand to consumer relationships and habits will also become stickier, as long as the execution remains flawless.

Meeting the demands of ECommerce requires a focus on both the minute details and the big picture. You have to craft resonant consumer experience design that are twinned with perfect operational execution, and that means orchestration, organization, and optimization with AI, machine learning, analytics, as well as creative inspiration. And that bring us to our final point.

 

Lesson 8: Build a bigger bench and then trust the team to collaborate, innovate, and make Better Decisions, Faster on your behalf.

While the goal of leaders is to simplify the complex, it is also to recognize that organizations need teams comprised of talent with diverse skillsets to tackle tough business challenges. Whether 2021 will be a year of Survival, Stabilization or Acceleration for an organization depends upon how much was learnt from 2020.
Innovation is the result of systematic incremental improvements to technology, as well as the application of data to achieve smarter insights.

For retailers, those insights and innovations must bring the best of digital and physical experiences together, to keep pace with consumers evolved use of brick and mortar versus online shopping options. Store associates will need to become experts in understanding stock availability, and be empowered with mobile capabilities to drive sales, while customers will need to see the continued refinements in how the mobile shopping experience uses time, space, and place in a way that lets them search, browse, filter, discover, and discuss as they see it.

Teams need to be comprised of specialists who are connected through consistent ways of working that give them a good overview of the overall business and their role within it. The winners will be the ones who enable teams to see both the forest and the trees when crafting more resonant and reliable connections between consumers and brands, across retail and communications channels.

 

Also published on MediaVillage.

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