January is the month of resolutions; dreaming big, setting goals, and immersing ourselves in the potential of all that we might do.
As marketers, OMD kicks off the year with two thought leadership events; the inspirational CES, where we review the show floor with the specific intent of assessing those innovations that tangibly enable our clients to create better experiences for their brands, and the NRF, where we unearth the insights that continue to enable our promise of making better decisions that enable consumers to fall in love with brands, repeatedly.
OMD USA attended the National Retail Federation 2023: Retail’s Big Show – the Global Expo held at the sprawling Jacob Javits Convention Center in New York City , bringing together 16,000+ exhibitors, 2,500+ innovators, start-ups, and speakers. The expo’s goal is to assess the challenges and possibilities that will transform business through the lens of retail. True to its name, this IS Retail’s Big Show.
NRF 2023 coincided with two culturally significant events, the opening of the Davos Forum and the anniversary of Martin Luther King, Jr. Day. This confluence of events prompted us to move from reflection to prospection as we consider how we balance the rise of the Conscientious Consumer, the shopper who is more knowledgeable than ever before when it comes to the products they purchase, with the pressures of responsible production and growth. This spirit of the consumer was the red thread at NRF, and they provide the perfect mix of pragmatism and hope, with almost no navel-gazing. Over the 3 days, it felt almost as though the devastating experience of a global pandemic had taught Icarus to not fly too high, for cautious optimism was in the air! The debate on conscious capitalism was invigorating; the forces that define the shareholder economy versus the stakeholder economy were clearly finding a middle ground. Through these, the underpinning of a tech-enabled future was unmistakable. Technology not for the sake of cool; but to make a better product, a better experience, and a better environment.
Jeff Gennette, Chairman and CEO of Macy’s Inc. spoke about leading through transformation; his push to have the ability to predict behaviors by embracing a data-fueled digital backbone was unmistakable. Underpinned by futuristic consumer-helping technology, predicting demand and inventory management is foundational for Retail. When we consider Walmart’s Intelligent Retail Lab, and how it functions as an ongoing testing ground for retail innovations, the practical utility that caught my eye was their in-home delivery service, where a trusted associate goes beyond simply delivering the requested items to the door, but they now enter the smart home, unpacks your grocery bags, arranges them in your fridge and cupboards, and even throws out the spoiled vegetables, and then leaves your home, re-locking the doors.
With every incremental improvement in what it means to deliver frictionless services, so our expectations of brands shift. At OMD, we are developing the analyses around the changing definitions and expectations of convenience, how our understanding of the time/value equation is evolving, and what it means as we continue to craft more valued and valuable experiences for our clients’ audiences.
Furthermore, we heard and felt the continuous evolution of the brick-and-mortar experience, the frictionless expectation of the consumer; in-store or interactive. As Rodney McMullen, CEO of Kroger said – people will always need food, but how they need it will continuously change. Whether we use flavor kiosks to taste test or holograms of celebrity influencers advising us about food, the “gital” (physical + digital) checkout lanes are not slowing down. The consumer always has their omnipresent phone, and those digital coupons can be redeemed anywhere, anytime. Brands need data, technology and innovation to merge these worlds, because today’s consumer expects personalized attention, an experience that celebrates their individual choices while collapsing their physical and virtual worlds together.
The Conscientious Consumer forces our industry to be a source of great creative inspiration, purposeful reflection, and valuable transformation. They inject friction into our decisioning and prompt us to be smarter and do better. As retailers rush to gain the attention and loyalty of this Conscientious Consumer, the themes that described them at NRF were clear:
They are value-conscious, they are cautious, and they are selective. 2023 is a year of caution. While there is no clear sight on where the economy will head, the economic indicators point to caution, and our consumers are steeling themselves. Predictive behaviors like the continued rise of digital coupons, and an uptick in credit card applications, have helped forge the bridge to technologies that help comparative shopping. Across large retailers, start-ups like Hivery and Pull Logic, worked to showcase how inventory management reduces costs that can ultimately be transferred to the end-consumer. It’s all about delivering true value and sharing the savings with them.
They expect seamless and holistic experiences. The barriers between 2D, 3D and even 4D experiences continue to blur, ever so rapidly. The pandemic made this our reality. Our consumers’ expectations mirror this and retailers are rushing to embrace innovation that captures this. From shopping for products to shopping for “the look” across any platform that the consumer chooses. Capture a “look” in an image and translate it into a quick access in a different marketplace. This is the real-time expectation fueled by visual AI platforms like Syte or creating engagement platforms that transcend the physical store through technology like Salesfloor. Smart RFIDs help the Big Box retailers at the individual SKU level. Changing supply chain networks, selective last-mile delivery options and replacing select high-cost physical touchpoints with digital experiences continued to cater to a selective consumer.
The plethora of burgeoning Web3 technologies with holograms, robots and interconnected data platforms made it feel more like a Technology exhibition. Yet, the messaging was unmistakable – we must enable an easy, frictionless shopping experience.
They embrace the plurality of their community. Brands mirror the community they serve. Brands must find authenticity, and transformation with true purpose is not only possible but will one day be critical. Brands like Chobani, PepsiCo, Nordstrom, and Kroger talked about their journeys and how they continue to reflect this in their customer and employee engagements. This was fueled by embracing innovation that enables transparency of sourcing through cloud platforms like SAP and Salesforce. Only through industrial-strength operations can organizations expect to remain future fit.
The message at NRF was crystal clear: the Conscientious Consumer wants to know about the product’s origin; they think about the environmental and social outcomes in its manufacturing and usage, even its disposal. When marketers plan these experiences, we must honor their choices – create a behavioral Design process that understands their friction and ambition. They have many options, and their loyalty will be fierce if marketers can authentically translate it into an ethical framework. We must plan around what makes their experience relevant and introduce and integrate technologies that interconnect across all physical, digital, and virtual dimensions. Underpinning those experiences with the right data partnerships through marketing platforms like Omni is now fundamental to understanding, anticipating, and predicting their marketing journey.
NRF 2023 inspired us – our industry has long understood the inherent tension of growth in production and consumer demand, versus the rise in sustainable practices. However, tension is often a source of great creative inspiration, purposeful reflection, and valuable transformation. Our consumers are demanding change. With its focus on connecting the consumer needs to their experience, OMD is ready to take on this challenge of the changing retail landscape and pivoting to the ever-evolving Conscientious Consumer.
Shreya Kushari
OMD USA Chief Client Officer
