The 2018 NRF Big Show showcased the unbridled enthusiasm and brighter outlook that retailers, solution vendors, consultants, and analysts have once again begun to embrace about the retail industry – particularly on the heels of the highly successful 2017 holiday season coupled with continuing economic growth in the United States. As expected, large crowds were evident on both days, and the EXPO floor was overflowing with retailers exploring the latest developments in optimization services, customer centric analytics, and other hardware and software offerings. Retailers are increasingly exploring many emerging technologies, with seemingly heightened interest in leveraging the cloud, use of unstructured data, machine learning, and even in artificial intelligence and augmented reality (AI and AR). This attention could be a sign that the general retail malaise of recent years may be subsiding, along with the fact that retailers are continuing to better understand that – in both good times and bad – innovation and business transformation are critical differentiators when chasing after the elusive repeat customer and attracting new customers.
The Cloud. While not exactly a new idea in the retail software universe, more and more solution providers are focusing their development efforts exclusively on cloud-based solutions, and this year’s Big Show was filled with vendors touting their cloud offerings. These systems were heavily weighted towards merchandising functions, and we particularly took note of many solutions focused on the assortment planning space. As an aside, assortment planning continues to confound solution providers, with many retailers just wanting a newer, cooler spreadsheet, and others clamoring for sleek graphical interfaces full of images. For now, these cloud-based applications are largely in addition to many vendors’ legacy on-premise solutions. In fact, unless prompted, most vendors barely mentioned their traditional software offerings, and there appeared to be little development in those systems. Cloud-based solutions provide three key points of attraction for retailers: (1) ease of staying current on the latest software (without a major upgrade path), (2) lower IT support requirements (especially of interest to retailers that have already trimmed their IT team), and perhaps most important (3) the inherent inability to customize the software (essentially retailers saying, “help us help ourselves”). Cloud-based solutions are quickly maturing, and we anticipate these will see the bulk of the innovation and investment for the foreseeable future.
Mobile. The further maturity of mobile-based solutions remains highly relevant, and these were still abundantly represented at the Big Show this year. One area of mobile that will continue to grow is solutions that help support unified commerce, allowing in-store retail associates to better interact with customers and sell more effectively – thereby providing hungry retailers new tools for driving sales growth. Another area that particularly stood out was mobile retail workforce management. Numerous vendors showcased their version of managing the “people side” of the retail industry.
Unstructured Data. The capture and integration of unstructured data (such as social media posts) into existing predictive analytics or forecasting algorithms seems to be a key new selling point for many of the software providers. The use of this data should increase in value and relevancy to retailers as the sheer scope of easily accessible sources continues to increase. Combined with machine learning that will get better and better at mining the relevant pieces and tying it into a comprehensive view of customer feedback, this growing source of rich data looks to play an expanding role in the retail planning universe.
Machine Learning. Remember the movie War Games? Fast forward 35 years (we know…let that sink in for a minute), and the technology is now entering the retail space. Essentially, machine learning is the ability for software to automatically apply complex mathematical calculations to big data – repeatedly and faster – and adapt the outcomes based on the learnings from those algorithms. This was a term that numerous vendors touted as integrating new or improved capabilities into their various software suites. Innovation in core retail business functions such as assortment planning, pricing, and promotion management with better market trend, competitor, and even consumer data could certainly provide game-changer improvements for those retailers that can successfully leverage the resulting insights and recommendations. We believe this will continue to be a trend, however, as with all new technology, change management will need to be a focus to successfully gain adoption. How much visibility and ease of use with the “black box” will be the differentiator in this space.
Artificial Intelligence and Augmented Reality. This year’s “shiny object” was another up-and-coming technology that’s still in the infancy stages of development. AI and AR were often linked to machine learning and various predictive analytical offerings by vendors. How this capability matures will be something to watch in the coming year or two, but as of now, AI and AR sit firmly atop of the 2018 NRF “buzzword bingo” board. RIS News put together a comprehensive list of vendor offerings, many of which include AI and AR; you can check them all out here: https://risnews.com/best-nrf-2018-top-10-takeaways.
Vendor Consolidation. Software vendor consolidation was also evident at this year’s Big Show. Several recently merged vendors started the challenging task of “speaking as one organization” and getting existing and potential customers comfortable with their expanded product offering. How quickly and productively these firms combine their sales, development, and delivery organizations will largely drive the timeframe in which the combined organizations begin seeing the benefits of their new marriages. The integration of these vendors’ sometimes overlapping and occasionally complementary software modules, and how they leverage them to reach an expanded customer base, will really dictate how beneficial these mergers turn out to be in the long run. Infor’s acquisition of Predictix 18 months ago resulted in new Infor solutions, and the name Predictix has been retired. Aptos acquired TXT last fall, and as of now they are separate platforms. Mi9 announced its acquisition of JustEnough at NRF, and certainly those teams are still getting to know each other.
All in all, the 2018 Big Show was refreshing in many ways – most notably, the distinct positivity about the outlook of the retail industry, coupled with solutions that are really beginning to understand and address retailers’ true requirements. The Parker Avery Group’s perspective for these new retail developments is that retailers need to understand that, like other innovations, the technology is not the answer in itself. Rather, the key to success lies in leveraging the solution’s abilities to embrace leading business practices and delivering technology in a meaningful way that is solidly adopted by the organization and customers. As with the transformation of commerce to utilizing the internet for ecommerce decades ago, early adopters who are able to successfully incorporate and leverage the new innovation before the competition will enjoy first mover advantages.