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NRF 2019: Retail redoubles digital store transformation efforts

Seize Digital
Author: Miya Knights

Retail redoubles digital store transformation efforts
Attracting nearly 40,000 attendees, representing nearly 4,000 retailers, Retail’s BIG Show hosted by the US National Retail Federation in New York is a great place to evaluate the latest retail technology trends.

Coming at the end of the busy retail festive discount season where technology work and investment is put on hold, many delegates come to the show with new budget and a wish list to help make up competitive ground.

As such, major retailers represented on stage at the show set the tone, where a few years ago, they were present to discuss the integration of ecommerce channels into the supply chain and business operations.

This year has continued to see retail leaders shift their focus from the strategic impact of ecommerce on their businesses to its direct impact on the store and how it plays into the end-to-end customer experience.

“US retail has grown faster than US GDP since 2016,” said Chris Baldwin, BJ's Wholesale Club Chairman, President and CEO. “This festive season multichannel customers outspent single channel shoppers by $100.”

Focus shifts from online to store
In calling out the increased value of such digitally-empowered customers, Baldwin demonstrated a new level of maturity in the attitudes of retailers towards digital transformation and the opportunities it can afford.

Discussions centred on how to bring the convenience, choice and relevancy of the online shopping experience into the store, and at scale – where digital transformation efforts are now shifting towards the store.

Jeremy King, Walmart chief technology officer, explained that two years ago the US grocer merged its store and ecommerce technology teams for example. IT and tech responsibilities were instead split.

“We needed someone to focus on the internal business and then somebody else to focus on the retail side,” King said, with the latter describing his own role. “On the retail side our systems focus on the customer.

“For example, our Walmart Pay systems in our stores know if you’re a or store customer. We need to provide a single view of everything within the company to the customer.

“As customers change the ways they shop, they change the way they  use technology,” he added. “It’s  no longer acceptable to just offer a digital experience online, at home. They want a digital store experience too.”

Winners double down on digital in-store
Research carried out by research firm RSR, sponsored by IBM and launched at the show compared the attitudes of winners towards their stores.

RSR defines “winners” as those with sales above the industry average comparable store/channel sales growth of 4.5 percent.

The report stated: “Winners have a more nuanced view of what will help their stores compete in the years to come. They believe the answer is making in-store visits more relevant in a multitude of ways.”

For example, nearly half (43%) of the most forward-looking retailers strongly agreed that more personalised content and more localised products are what will help set their current stores apart from the competition.

RSR Research Graph
This winning view was reinforced by the CEO of Alibaba’s store-based Freshippo arm, which runs its growing network of over 100 Hema stores throughout urban China.

Yi Hou, CEO, Shanghai Hema Network Technology Co. said: “Omnichannel is a retail-centric model. NewRetail is customer centric,” he said. “With omnichannel, there is a need to spend to acquire online customers.

“With NewRetail, the traffic flows organically from online to the physical store because it’s most convenient.” Hou also pointed out that, 60-75% of Hema store orders (for delivery or pick-up) originate online.

This compares to ecommerce sales overall currently making up only 8-9% of total modern retail sales in China. Crucially, Hema targets customers with personalised offers and information via their mobiles when in-store.