NRF’s 2020 Big Show brought many things we expected to see: large Sunday and Monday crowds, a myriad of solutions incorporating Machine Learning and Artificial Intelligence (AI and ML), along with a handful of new & promising technologies. The event also came with the unexpected: a determined focus on fundamental retail execution and managing change, as well as—perhaps most pleasing to all participants—warm January weather in NYC.
The Expo floor was lively, and the retailer presence was energizing. Retailers we spoke with continue to explore emerging technologies, but with the recent years’ focus on the emergence of AI and ML, the big question now is, “How do I use it?” This query could be a sign that over the last year or two retailers have been in discovery mode with their legacy infrastructures (inclusive of people, process and technology)—essentially trying to understand, “What must we replace vs. what we want, and can the legacy handle what we want?” Or it could mean they’ve been trying to adopt, but their current internal fundamental building blocks are not ready.
Many questions still remain on how to absorb the new tech, especially for those who are not in a position to incorporate a whole team of data scientists into their organization. The prequel question for many retailers is, “How do we stay relevant or just get started?” Let’s dive deeper into some of the key areas of focus we saw at the Big Show relative to AI and ML.
Solution Updates. There was buzz around new platforms and solutions that are now incorporating the science of AI and ML without the need for another stand-alone forecasting solution. Many solution providers have realized that retailers cannot absorb a pure science platform without understanding how it fits with the execution solutions, so they have started to mesh the concepts. This also brings a unique opportunity for retailers to manage more of the true science pieces on their own, without hiring a complete data science team. From a Parker Avery perspective, however, the jury is still out on this approach. As these solutions are implemented, it will be interesting to see the adoption and how today’s workforce engages with balancing the art and the science. Those implementations that result in clear business value will be significant in help driving AI and ML-infused solutions forward.
Flexible fulfillment is a good example here. Should it be automated replenishment? Allocation? The answer may be, both. Many software solutions we looked at are focusing on giving retailers choices on how they fulfill in one tool and having the ability to change modes based on needs or requirements. Also, the ability to infuse ML and AI into one solution with one demand signal simplifies the applications and likely will make them easier to manage. This new approach may not only streamline and optimize inventory management, but potentially a retailer’s organization as well.
Master Data Management. While most retailers come to the Big Show to see new and emerging technology, there were many discussions around data. It’s a hard pill to swallow when you want the shiny object, but you discover the very basic component you own (your data) is not in a place to support your vision, and it’s a complicated web to untangle. As we talked to our clients about what they had planned for the next 12-18 months, many were taking the path of foundational changes to enable the future. This was a mix between new ERP implementations, placing a focus on improving business processes, and strengthening master data governance. Foundational changes may not be the shiny object, but they have become a necessary step to secure future growth—or in some cases just stay afloat.
Managing the Change. As we walked the show and met with both retailers and solution providers, one of the prominent questions people asked us was “How do we manage the change and achieve the adoption we need to sustain this transformation? We don’t want to make this big investment and have it go nowhere.” GREAT question. Whether we’re talking about new solutions, ML or AI, it all applies potential new logic and approaches to give retailers insights based on science. This can be a hard lesson to coach a team to adopt. You’re essentially asking your team to not only learn a new solution, but also think differently about the job they’ve done for most of their careers. Retailers can no longer approach solution implementations as expensive, IT-driven burdens (maybe with some flashy new user interfaces). They must incorporate a focus on their people and support just as much as the technology to ensure success and longer-term sustainment.
As we continued our discussions throughout the show, it was refreshing to hear that many were putting much more focus on the organization and business impacts of new technologies—much more than we’ve seen in the past. We are hopeful that retailers are incorporating comprehensive change management activities and remaining steadfast with this portion of the investment—even if budget becomes a question. As Peter Drucker is quoted to say, “The greatest danger in times of turbulence is not the turbulence – it is to act with yesterday’s logic.” This sentiment rang very true during our interactions at the Big Show.
Overall, this year’s NRF Big Show was encouraging, and the promise of innovative technologies bringing meaningful value to retailers is within reach. Retailers were inquisitive and engaged, whether they are in the midst of flux or rapidly opening new stores, and there is a fresh recognition for the need for change balanced with the sober acknowledgment to shore up the foundation.
We look forward to continuing the conversations we started with current and potential clients as we move forward into 2020. Please don’t hesitate to reach out to us with any challenges you are facing.