Andrea Dorfman
Andrea Dorfman
Content Manager

NRF 2018 takeaways: Anything is possible when retailers think like tech companies

It is not necessary to change. Survival is not mandatory. -P. Drucker #NRF2018

As in every year at retail's main event, NRF exposes us to a lot of exciting things, opening our eyes to the future of retail and all the amazing opportunities technology enables. It just emphasizes what we already know: digital changed retail forever, and retailers must innovate or die. It's harsh. The truth often is.

It was hard not to be blinded by all the shiny objects at NRF 2018. How many of us went back to our hotel rooms at night dreaming of ways to use AI and augmented reality to wow customers? And how amazing machine learning is to personalize shopping experiences?

The cautionary tale is that technology we thought so innovative and exciting at NRF just a few years ago is already obsolete. That's when those dreams become nightmares. Especially for those who jumped in too quickly (i.e. buying technology for technology sake), and for those who have yet to go digital, losing sleep and significant ground every day.

There's also the fact that just a couple of years ago omnichannel was the buzzword, now it's become table stakes if retailers want to stay in the game… self-checkout, endless aisle, buy online pick-up in-store. It's almost hard to imagine retail without these.

In this NRF recap blog, let's focus on how retailers can get on with their digital transformation so they can bring these amazing experiences to life for their customers.

Retail transformation starts within

Many retailers are going about innovation all backwards.

Instead of trying to meet demands of the general mass with quick-fix tactical solutions like an ecommerce site, mobile app or in-store wi-fi, they first need to start thinking like a tech company. They need to go back to their roots, examine their business values, rethink their business models, and focus on their customers are and what they expect.

They need to build a digital-first mindset, a culture focussed on solving real problems for real people: customers and employees alike.

Take it from the best. Walmart CEO Doug McMillon presented on the changing face of retail, and shared their key to successfully navigating the changing retail landscape:

"We want to foster a culture that supports change. Retailers that survive must realize they are technology companies, as well as merchants, and must continuously evolve as technology changes".

It's natural that having a digital-first mindset is unnatural for retailers, especially traditional retailers whose business focussed solely on brick and mortar until only a few years ago. But ecommerce and mobile commerce have changed the game, and changed the role of the store.

Technology is the new, now and next of retail; it's erased barriers between digital and physical shopping experiences in the minds of consumers, and that's exactly how organizations need to start thinking. It's all about omnichannel now. And basically, the customer is the channel.

The challenge is all the silos that have built up over the last few years, and not just data silos, people silos too.

Where IT and business converge

During the Innovation Lab conference focused on the what and how of digital transformation, Neiman Marcus' Scott Emmons admitted their old way of doing things, waiting for business teams to come up with ideas that IT couldn't execute on, was a major impediment to innovation.

Now, their IT and business units are united, working together on building real solutions to solve real problems based on a shared vision of the company's omnichannel strategy.

They realized that they needed to think like their customers, who didn't see their ecommerce and brick and mortars as separate business models. But that was the way it had been built. A situation the majority of retailers attending NRF are faced with as well. Too many disconnected legacy systems, way too many data silos.

These data silos are indeed one of the biggest obstacles to an omni-channel vision. That, and the way things are set up internally.

Without a powerful technology foundation that unifies data across all commerce systems, retailers cannot deliver seamless shopping experiences. And without a digital-first mindset cascading down from top leadership to every user and customer-facing employee, the same holds true.

Even Wall Street now considers tech-savviness a key factor of retail viability, and an increasingly important differentiator.

Think Big, Act Small

Digital transformation is no small feat for any retailer of any size. Innovating means being bold, daring and smart, while not being afraid to fail. The key is to get started faster so you can fail faster and ultimately succeed faster. As they say, the only thing worse than starting and failing is not starting at all.

It's time to think big. If there's anything that we can take away from NRF, it's that retailers can't think big enough. The capabilities of tech, of AI, is unimaginable. Amazon is already launching their first checkout-free grocery store. Retailers have to dig their heels in and start building a foundation with the right technology and the right people.

Knowing where to start is the hardest part, so teaming up with solutions partners is a great attack plan. They can help define a transformation roadmap, identifying which problems you can solve now for quick wins, and which ones need more time and resources.

Just by bringing all your structured and unstructured data from those system silos into a single cloud platform will make all the difference in the world moving forward; that unified view opens a world of big opportunities to create amazing customer experiences.

Think big, but act small. Those quick wins will show customers that their favorite brand is digital-savvy and looking for new ways to please them. For example, leveraging machine learning to deliver more personalized merchandising on a website. Then, extending that into the store through mobile-enabled solutions for associates or self-serve kiosks. The kiosks don't need all the bells and whistles at first. Self-checkout and endless aisle can be added later.

The caveat is not to do anything unless it solves a real problem for your business. This is where so many get caught in the trap, blinded by shiny rather than focusing on reality. What point is there to invest in solutions like interactive mirrors if there are no endless aisle capabilities? Or adding chatbots when product and customer data is scattered across system? The wow factor will quickly lead to disappointment and likely another lost customer.

Transformation doesn't mean starting over

Digital transformation is a company-wide journey, a journey that starts from wherever they are at right now. Innovate or die means retailers have to stop putting energy on fighting the old, and focus on building the new. Fill in the gaps. What systems and platforms are needed to leverage existing legacy technology? What new roles are needed to execute a digital-first strategy?

Thinking like a tech company requires a digital-first culture to attract the best talent: developers, system architects, digital merchandizers, tech-savvy store associates.

With the right foundation to become a successful data-driven organization combined with a digitally driven mindset, anything is possible. All the amazing experiences we witnessed at NRF are possible. The new experiences we are sure to see next year.