All eyes were on the future as the retail world converged recently at the Javits Center in New York City the National Retail Federation’s Big Show. It was the show’s first return to a fully in-person event since the pandemic began, and retailers were eager to connect and learn about the latest technology and innovations shaping the industry.
Retail, like all industries, has been through some major challenges and evolution since the pandemic began – but the NRF show was a time to look forward, with optimism, to what lies ahead.
Business opportunities among uncertainty
Future trends were on many retailers’ minds, as a standing-room-only crowd packed a session led by Andrea Bell, vice president of insights at WGSN, a consumer trend forecasting firm. Bell outlined several future drivers she predicts will shape the future of retail by 2025.
One driver she identified is the “polycrisis era” happening now – one where pandemic, climate problems, record low consumer confidence, and growing anxiety across most facets of daily life are leading to an “age of rage” and uncertainty.
But even amid all this gloom, she pointed to “friendshoring” as a business opportunity retailers should explore. Friendshoring is outsourcing operations to countries that share likeminded values. Investing in friendshoring, she said, can be a good way to reduce brands’ exposure to global geopolitical uncertainty.
She also pointed to a decentralized digital culture as a driver for change, noting the Internet and social media platforms are becoming less “social” than ever. Gen Z consumers, for instance, use them mostly for entertainment reasons. To get noticed, brands need to think of new ways (not just visual) to get their customers’ attention. Savvy companies are already exploring sonic offerings, like customized playlists, and web 3.0 and the metaverse bring even more possibilities of new ways to connect, she said.
Another key driver will be the increasing importance of sustainability. As consumers pay closer attention to brands’ social conscience, retailers need to think of “nature as a board member” and intertwine sustainability into their strategy whenever possible, Bell said. Embracing the solar revolution, in particular, should be a priority in the coming years.
Bell also pointed to the growth of synthetic creativity (automated, tech-driven creatively tools) as something that will impact retailers more and more. There’s no shortage of new AI-powered tools that can take the place of, or supplement, human creativity. But just because the technology is available should you use it? And when? Retailers need to learn what their options are, how they work, and when to use them, she said.
Optimism amid economic headwinds
Elsewhere at NRF, economists speaking at an event for press and analysts were split on whether the United States is heading into a recession this year. NRF Chief Economist Jack Kleinhenz and Morgan Stanley’s Sarah Wolfe predicted we’ll avoid recession, while KPMG’s Kenneth Kim said his firm foresees a recession coming in the first half of the year.
Despite lingering uncertainty about the economy, though, the economists all saw bright spots for retail. Even as inflation constrains some household budgets, many consumers still seem willing to spend, they said, and credit conditions are favorable. Holiday spending at the end of 2022 was higher than the previous year, setting retailers up for a relatively strong 2023 – especially if inflation eases.
“Don’t prepare for the downturn. Prepare now for the recovery,” said Ira Kalish, Chief Global Economist at Deloitte, highlighting labor shortages, supply chain challenges, geopolitics, and climate change as elements that will here to stay as part of the long recovery.
New companies share the spotlight
The Consumer Product Showcase and Innovation Lab gave small business the chance to show off their consumer-facing products and new technology for attendees. Most of the companies in the consumer showcase were minority-owned, women-owned, veteran-owned, disability-owned, or LGBTQ-owned, and innovation lab companies represented countries around the world.
The Consumer Product Showcase featured a wide range of companies: from Mr. Tortilla, which makes low-carb chips; to FOLKUS, which sells paper made from stone; to Doggy Bathroom, an indoor litterbox for dogs.
Retailers who attended NRF were invited to vote for their favorite products at the showcase. Cosmetics company Chica Beauty won first place and $15,000; CordBrick, which makes accessories to help consumers organize devices and cords, took second place and $10,000.
Celebrating a visionary
Lowe’s Chairman and CEO Marvin Ellison received the Visionary Award at the NRF Foundation Honors ceremony. The award, presented to an outstanding retail industry leader each year, celebrated Ellison’s stewardship to drive positive change within the industry.
Ellison delivered a keynote speech later in the show, where he spoke about his commitment to making the Lowe’s workforce and leadership team more diverse. A retail brand’s leadership, he said, should reflect its customer base.
“We’re trying to create a company that I wish I could’ve worked for when I was coming up the ranks,” Ellison said.
The brand focuses on what Ellison called “retail fundamentals:” product selection, supply chain, operational efficiencies, engaging the customer, and flexible e-commerce.
Key to that, Ellison said, was connecting the digital and physical stores. “Next-day delivery sounds good until you have a busted pipe.”
Overheard on the show floor
“Technology is not just for luxury.” -- Gaia Vernagliano of 3D commerce platform Zakeke
“AI is fading into the background” to become part of everyday business. -- Michelle Bacharach, CEO of retail content engine FindMine
“We want to put information as close to the customer as possible in the best way” to make it easy for them to shop with us. – Tony Drockton, CEO of luxury handbag retailer Hammitt