BULENT DAL | CEO
My Impressions from NRF 2020:
The interest in NRF continues to increase year by year in parallel with the retail sector development. According to the information BJ’s Wholesale Club and NRF Chairman Chris Baldwin gave at the opening speech of, the participation record was broken this year, over 40000 people from 100 countries representing 16000 retailers.
NRF 2020 was again turned into a full technology show. The speeches and exhibits in the exhibition area were focused on the effects of technology-based transformation and the solutions that served this transformation. Impacts on customer experience and real-time personalization by understanding customer insights with data analytics tools were the most focused topics. Sustainability, return management, and expectations of the Z generation were among the other prominent subtitles. I try to participate in this organization where retail and technology meet, and share the topics that interest me. This year, I will try to convey the topics in detail that interest me.
Main Message and Satya Nadella Speech:
“If Customers Are The Heart Of The Retail Industry, Data Is The Oxygen”
For the first time in NRF, I witnessed the CEO of a technology company to speak in the main speech after opening speech of the NRF President. Even this little detail shows the importance of retail collaboration with technology. Microsoft’s recent discourse that Microsoft CEO Satya Nadella put at the center of his speech; was actually reflected in the solutions showcased in the exhibition and in many speeches during the event. Nowadays, in physical stores, customer experience and customer product interaction can be recorded and monitored similar to ecommerce websites, social media sites and mobile applications. Gathering and making sense of the data that helps us understand the customer’s end-to-end experience has been the most important requirement of smart retail. Therefore, Satya Nadella specifically addressed the theme that the consumer’s pulse will be listened to and interpreted from the retail data and that retailers using this power will be successful. He said that every hour, 40 terabytes of data emerged in the retail industry and the retail is constantly collecting the signals of the world. He stated that smart retail would be possible by creating the new retail experience by using the data to follow up the customer, the employees, the operation and what is in the supply chain.
Microsoft CEO Satya Nadella underlined that every retailer will need to establish their own technology intensity. He stated that, the technological infrastructures to be transferred from other companies will not be enough, every retailer should increase its digital competence. He stated that technology will not eliminate the art of retail, and that renewed retail art will be performed based on strengthening technology intensity in increasing the core operational excellence of retail.
He reiterated that 30% of sales in ecommerce came from data-driven recommendations, 75% of any retail shopping process started online, and the new retail experience has changed due to technology. He underlined the importance of providing better service to the customer by strengthening the workforce- field personnel- with data-based technologies.
Professor of MIT Sloan Management School Zeynep Ton’s speech with CEO of Walmart
Another topic that I proudly watched during the sessions and enjoyed sharing with you was “Good Jobs Strategy” session. In this session; Turkish professor Zeynep Ton, who has been focusing on Retail Supply Chain for many years as well as written a book that has been focused on this topic which has also been among the bestseller in 2014, had an interview with Walmart CEO John Furner on “Good Jobs strategy”.
With the occasion of the NRF, I would like to introduce Zeynep Ton who is working closely and successfully with leading retailers in America and Europe. I believe that Turkish Retailers should benefit from Zeynep Ton’s works.
Zeynep Ton thinks that many companies in retail see especially the store employees as a cost and do not offer good job opportunities, and as a result, the quality of the services offered to the customer has decreased and damaged. However, she argues that even discount stores based on cost-sensitive low prices by offering their employees better job opportunities and keep the customer experience at a good level, so that good companies are also successful by offering good business opportunities.
Studies and researches Professor Zeynep Ton focused on, examine how companies, especially retailers, can design and manage their operations to satisfy employees, customers and investors at the same time. Her research has been published in managerial and scientific journals such as Harvard Business Review, California Management Review and Organization Science; Her work has been widely featured in media such as The Atlantic, The New Yorker, The Washington Post, The New York Times, PBS and NPR.
After her book was published, retail leaders started to reach Zeynep Ton in order to understand how to implement the Good Business Strategy in their organizations. To support them in their strategical path, Zeynep Ton has established a non-proift organization the “Good Jobs Institute(GJI).
Giving examples of how good business strategies can be implemented even in discount stores, Walmart America CEO John Furner talked about how they improve employee continuity and improve customer service by empowering store employees, increasing wages, giving more training, and giving a hearing in overtime planning.
A Human First Digital Strategy:
On the second day of NRF, Starbucks CEO Kevin Johnson made a great addressing while digitalization, robots and artificial intelligence most mentioned topics. “In the next decade, we want to get better by reaching the level that the top technology companies are at artificial intelligence. We plan to use artificial intelligence on our business partners to better connect with customers. We are pursuing a digitalization strategy, with a focus of human first. ” said. In addition to Kevin Johnson, Satya Nadella and many other speakers argued “robots or humans would serve better” debeta and agreed that a strategy based on technology empowering employees with technology would bring success.
Examples from Innovation Labs:
Recently in NRF, companies that offer supportive solutions based on innovation in retail are brought together with the participants in a special exhibition area. I would like to share the scope of some solutions that I had the chance to examine in detail.
- Smart shelves from Conex company that recognize the cosmetic product on the shelf with artificial intelligence and give information and marketing messages to the customer through the digital panel behind the product.
- The solution from the Walkout company that recognizes the products thrown in the basket with visual recognition, creates the voucher, pays and realizes the basket with a low costs.
- It attracted my attention that the solutions that use a combination of customer notification and data analytics focused on reducing the return rate in the fashion retailing based on improving customer experience and increasing operational efficiency from Happy Returns company. With the return and exchange application service offered to the customer at the front, another product can be delivered without any loss in turnover.
- Increasingly company exhibited its solution offering an increase in attachment rates amount for per order with complementary product suggestions along with purchased products.
- Artificial intelligence practices and innovations reflected on the customer were dominant. I think that some internal efficiency applications such as blockchain are not given enough attention and are not brought to the fore.
- Solutions controlling inventory in warehouses with Drones managed by a software.
- A solution from N.A.bld company stood out front by offering a different title in the smart innovation platform among the solutions for companies that took the order, designed and produced the product in digital environment, digitalizing their production processes from end to end.
- Gıda perakendesine yönelik flashfood firması raf ömrünü tamamlamaya yaklaşmış sebze ve meyve ürünlerini toplayıp açık pazar uygulaması üzerinden düşük fiyata tüketiciye kendisine yakın perakende mağazasının bulunduğu teslimat noktasından tedarik eden bir iş modeli geliştirmiş. The flashfood company has developed a business model for food retail which collects vegetable and fruit products that are close to completing its shelf life over an open marketplace model, and delivers them to the consumer at a low-price to the nearest retail store.
2020s artificial intelligence applications from 2010s mobile technologies.
When we entered the 2010s, mobile started to be talked a lot and as of 2012, the companies started to exhibit their first applications, and each year the number of mobile applications increased, matured and entered into our lives. In the 2020s, it seems that there will be years that Artificial Intelligence will be talked about a lot. As of 2020, every player in the retail has a prominent application based on active artificial intelligence. Especially, Nike and Nordstorm’s augmented reality based artificial intelligence applications attracted attention. In the food retail, the mobile devices were placed on the shelf and out-of-stock products in the shelves, shelf placement and price accuracy checking solution samples were quite high.
- Nike has developed an application that customers can visually design the most suitable shoe according to their exact foot shape and size. The warning and directing the consumer to the right product in the app, if a wrong number was chosen according to the information of the person them into the application.
- Nordstorm ve Ulta Beaty gibi firmaların ise müşteriler rujların ya da kozmetik ürünlerin kutularını açmadan yüzlerinde denedikleri mobil ve dijital ayna uygulamaları ilgi çekti. Mobile and digital mirror applications attracted attention which companies like Nordstrom and Ulta Beauty make their customers try lipsticks or cosmetic products on their faces without opening the boxes.
Robots and Stores without Cashiers:
It seemed that the number of stands with robots increased 10 times more compared to the previous year. Some of these companies’ solutions were exhibited both in the exhibition areas below and in the innovation lab area upstairs. Repetitive and similar screenings caused some inefficiency. On the other hand, if we consider that most of these companies have not yet achieved commercial success, it would not be wrong to say that we witnessed the future efforts to take part and compete. Like last year, the number of Amazon Go and smart shelf-based stands has also increased. Along with image processing based shelf systems, examples of uninterrupted customer experience with smart basket based applications were the theme that most companies focused on. Many drills serving inventory management and marketing were exhibited in the food and fashion retailing. While there were more experimental studies last year, we have seen that the smart shelves usage about to begin this year.
Headless Commerce, which has increased its name in speeches in NRF, has drawn attention as a separate title. Just because you haven’t heard it before doesn’t mean you haven’t experienced it or you don’t know what it is. Due to the complexity of end-to-end trading systems and the difficulty of adapting to modern purchasing behavior, IoT and voice interaction, and processes based on ordering and purchasing without any e-commerce facets or magnets on refrigerators such as Amazon Dash Button have entered our lives. We are talking about systems that can be ordered by pressing the buttons. In this process, there is a process that ends with an API call to the application layer to make an API call between the device and the application layer, then process the order and update the status of the result in the commercial system. The approach based on providing a more practical experience to the consumer without integrating with the ERP, seems be preferred for certain product and service models.
Generation Z in the shopping scene
Another trend discussed at the event was the emergence of experiential retail formats to meet the needs of the demographic group Z Generation, which was born after the mid-1990s and now reaches adulthood. One of the cases described was that the NTWRK company reached the Z generation with the mobile application that interacts with streaming video and social media using known names such as rapper or actor in cultural life.
Camp CEO Ben Kaufman, took the floor in a session where he talked about how he bonded with generation Z and families with different themes in his 5 stored chain. He explained his strategies based on selling the products they applied with the transformed themes, selling tickets about the experiences offered, and providing sponsorships that could tell the brands their own stories.
Etik kaynaktan ürünün sağlanması, adil ticaret, azaltılmış ambalajlama ve israfı azaltmaya yönelik yeniden satış ve kiralama hizmetlerinin büyümesi tartışıldı. At the NRF event, many retailers, brands and authorities made a speech about sustainability and requirements. There were panels specifically based on this subject. The growth of re-sale and rental services to reduce waste, providing product from ethical sources, fair trade, reduced packaging were discussed.
Lush America company representative told that the company does business with six core values, including production dates, ethical purchasing, focus on handmade products and strict policies against animal testing.
West Elm, the home decoration retailer, said the company had followed a simple slogan since its foundation in 2002; “Get a little greener every day.” In 2014, West Elm stated that it was the first home retailer with Fair Trade Certificate.
Many technology solutions that I have given as examples based on sustainability related return and destruction prevention were also included in the fair area.
Closing Speech from Gwyneth Paltrow:
Eagerly awaited by everyone, Gwyneth Paltrow, the famous movie actress, writer, singer and now owner of Goop Inc., took the floor for the closing speech.
In her speech, which everyone watched with interest, she said that she would have asked questions without any hesitation about the things she did not know if she had returned to the starting years of her business. She stated that her most important problem was that she was unaware of what she did not know and therefore she constantly tried to read and learn many unnecessary subjects at midnights and made many mistakes.
Oscar-winning actress stated that she created the Goop newsletter from the comfort of the kitchen table in 2008, and about six years later, this little effort has now turned into a business that has reached 300 employees and $ 250 million in 2018.
According to Forbes, the company provided a total of $ 80 million in external financing. Paltrow described Goop as a lifestyle and health-based “contextual commerce” site where people can buy everything from candles to furniture and health supplements.
The NRF 2020 Organization, which was carried out for three days with an extremely busy and intense agenda; It showed the participants once again how technological developments penetrate and transform innovative technologies into business patterns, business models, attitudes and behaviors of users and customers.
Tüm bu çıkarımlar globalde olduğu gibi Türkiye perakende sektörünün de bu dönüşümü iyi okuması ve yatırımlarını, bakış açısını bu yönde geliştirmesinin mesajı oldu.
All these inferences gave the message to Turkish retail sector as well as global retail, to read this transformation well and develop their investments and perspectives into this direction.