And so NRF’s 2014 Big Show has come to a close. Throughout the event, as in past years, retailers, solution providers and sponsors spent their time networking, showcasing, entertaining, tweeting, posting and discussing all the latest trends, solutions and opportunities that await and invigorate retailing.
The Parker Avery Group attendees enjoyed meeting with a number of retailers and solution providers. It’s always interesting to find out what’s coming down the pike, including the broad similarities and tactical differences between companies. The following key themes resonated during our discussions:
• Focus on Omnichannel Fulfillment Strategies. Omnichannel remains top of mind for many retailers. Many are addressing Omnichannel fulfillment needs, such as order online / pick-up-in-store or ship from store. This is driven by the success stories of a handful of retailers who have implemented these types of fulfillment strategies, as well as the customer expectation to be able to purchase and receive items wherever and whenever desired. Leading retailers also see this as a significant margin opportunity to reduce markdowns, using available slow moving inventory for fulfillment of online and other store demand. We spoke with a few retailers who were in the initial planning stages, but found that more companies are actively pursuing and implementing these strategies.
• Getting Back to the Basics. Retailers are getting back to the fundamentals of retailing and addressing core merchandising needs even though the larger vendors have not focused on major functional enhancements in this area. With the customer’s interaction with a brand spread across multiple channels and devices, retailers must also realize that basic retailing principles – while updated and streamlined for a more connected world – are still key to success. Solution providers need to be sure their systems address the expanded set of basic retailing needs in an omnichannel world, and retailers must revisit their foundational systems to ensure they are ready to support new omnichannel strategies. We expect the drive to make core merchandising systems ready for omnichannel to pick up steam in 2014.
• Bridging the Gap. Because core merchandising is decidedly not yet omnichannel enabled, Business Intelligence (BI) solution providers are pushing expanded metrics and footprints to gather, analyze and operationalize information that cannot be brought together in existing applications. Examples include the reporting of store demand and fulfillment (in addition to sales) to reflect omnichannel fulfillment. We spoke with one solution provider who is delivering omnichannel capabilities in 2014 as part of both core merchandising and BI – including recognition of the distinct demand and fulfillment components of every transaction.
• New Assortment Planning Capabilities. Many retailers are evaluating their existing approaches and investigating solutions with the objective of creating leaner, more efficient planning organizations as well as providing capabilities to better integrate their channels. Many software vendors have recognized this need, and are incorporating omnichannel capabilities into their planning solutions; however, the inclusion of customer segmentation remains a gap. Some solution providers introduced image-based and 3D space and assortment tools. These proved to be very interesting and gave many attendees additional compelling reasons to rethink their existing planning methods.
• PLM Coming of Age. Retailers are clear on the benefits of PLM and are focused on finding ways to do more with less, do it faster and do it better. Both large and midsize PLM solution providers are focused on end-to-end solutions leveraging the capabilities of their platform’s footprint to extend PLM from cradle to grave. Vendors are blurring the lines between traditional product design/development and merchandising, enabling 3D visualization at the store level where one click on a 3D product can drill into the product information, including the BOM. Solutions that are more enterprise-focused are emphasizing line planning, purchase order, and logistics functionality. The larger theme is “out of the box PLM”, with retailers pushing back on customizations required from many systems. In response, PLM vendors are finding ways to create value ready deployments pre-configured to industry best practices.
• Solution Rationalization on the Horizon. Retailers continue to have a wide array of solutions in their portfolio driven by an ever-increasing appetite for new capabilities. The cost of integrating these disparate systems – despite advances in middleware technologies – continues to take its toll on already-tight retail IT budgets Parker Avery foresees a rationalization of these complex application sets, motivated by retailers’ desire to have fewer solutions in their enterprise. While this type of “rationalization” is not anticipated to begin until perhaps 2015 or later, retailers will begin to demand true out of the box integration from leading solution suite providers, who have been previously focused on acquiring new capabilities and less concerned about the need to integrate within their own solutions.
In parallel to the Big Show, The Parker Avery Group announced our new Diagnostic Services for Omnichannel and PLM. These diagnostic services address many of the concepts we saw, heard and discussed at NRF. We are excited about offering this service to retailers as a way to help them objectively understand their current capabilities and opportunities, and work with them in developing solid strategies and workable plans to achieve their business goals. Click here to read more about Parker Avery’s Diagnostic Services.
To discuss any of the above concepts or the Diagnostic Services, or to speak with a member of Parker Avery who attended the 2014 NRF Big Show, please contact:
Robert Kaufman, CEO | robert[dot]kaufman[at]parkeravery[dot]com The Parker Avery Group, Associate Partner | sonia[dot]hernandez[at]parkeravery[dot]com The Parker Avery Group, Associate Partner | laura[dot]ramsey[at]parkeravery[dot]com