My Top 6 Learnings From NRF 2023
The NRF (National Retail Federation) Big Show is an annual event where retailers and industry experts come together to discuss the latest trends and technologies in the retail industry. Our team was thrilled to be back in attendance for this year's event - meeting partners, prospects, and clients to discuss what the year held in store for them and the key trends and initiatives they would be focusing on.
This blog will summarizes my top 6 learnings based on sessions, meetings, and conversations across the show floor.
Composable Commerce Is Mainstream
Some leading retailers have already adopted a Composable Commerce solution. It is firmly in the plans for a significant portion of retailers as the flexibility benefits and economic impact on a retailer's bottom line are being realized and poised to be more critical in a year that looks ripe for a slowdown. Economic conditions mean that shorter planning cycles and the need for flexibility in technology will be paramount to the success of retailers.
A Composable Commerce approach allows for the easy addition, testing, and change of customer experiences based on data rather than intuition or what is sold in package. This approach is crucial as retailers must be able to pivot quickly in response to changing customer preferences and channels and can no longer afford to wait for 6-10 months to implement a new solution for something like Buy Online, Pickup in Store (BOPIS). A case in point is the rapid adoption of generative AI, such as Chat GPT, in retail (yes, some of this blog post's intro was written by Chat GPT).
The widespread adoption of a Composable Commerce approach allows retails to be more nimble. With the ability to add capabilities quicker, a three-year roadmap is no longer sufficient. Retailers must build 12-18 month roadmaps with stopping points for evaluation and adjustments. They also acknowledged that the right technology could enable them to take risks, move quickly, and partner with the right companies to drive success.
What do these shortened planning cycles mean for retailers plans in 2023? Retailers will not go through the long process of replacing all their technology but will instead layer on new capabilities to add value and drive down operating costs. This will be especially important in the face of economic uncertainty.
To learn how your brand can get started with replacing core functionality with a Composable Commerce approach, chat with us today.
ROI Focus on Tech Investments:
With the increased attention from capital investors on ROIs, the focus has also made its way down to retailers' operations. While Composable Commerce delivers faster and more efficient ROIs for any future technology investment for retailers, a perceived downside of Composable Commerce is the level of tech sophistication needed to manage it.
The plumbing becomes very complex for some retailers left to manage their Composable Commerce solution. Learn more about how your brand can overcome this obstacle with the assurance of a trusted ally, read more about Composable Commerce XA™.
What is clear is the benefit of the modularity of a Composable Commerce approach: new AB testing, new PIM to ease workflows, adding a pop-up experience, etc., becomes infinitely more accessible. Faster time to market also means retailers can pilot things live and continue evolving to meet their customers' expectations.
To learn more about how Composable Commerce can benefit your bottom line, check out our TCO Guide.
Brand Identity and Authenticity as Key Strategic Pillars
The focus on customer experiences was also highlighted as a key trend in the industry. Building on its momentum as a trend from last year's conferences, brand authenticity and identity is crucial to gaining and retaining customers as it becomes increasingly important that a brand shares a customer's values. Particularly with Gen Z now able to vote with their wallets as their spending power increases.
Recommerce is one of the ways brands incorporate sustainability into their brand identity. This is relatively new, with only 24% of top brands in one survey already operating a recommerce offering. For example, Mattel's American Girl Doll hospital ensures any markings remain on a doll that is brought into the hospital, guaranteeing that a child's meaningful personal relationship with their American Girl doll remains intact.
Nike's sneaker robot restoring customers' shoes as another crucial customer touchpoint in their overall experience with the brand emphasizing their commitment to sustainability. Innovative experiences like these continue to grow in importance as brands focus their strategies on establishing a brand identity that mirror's what their customers care about and expect from retailers.
Unified Commerce is Table Stakes and Has Replaced ‘Omnichannel’ Plans
Omnichannel retail has been at the forefront of retailers' plans for a few years now. At this year's NRF event, it was evident the promise is now a reality. Brands have begun focusing on unified commerce as a core tenant of their strategy. What is unified commerce? Ensuring that product, customer, inventory, etc. data is shared in real time across each of the channels to provide a single experience for customers as opposed to the linked but still separate experiences of an Omnichannel due to the lack of ‘one version of the truth’. The importance of delivering a unified,contextually relevant shopping experiences to customers where they are is proving to be a consistent driver of success.
Another discussed topic in several sessions was the brick-and-mortar store associates as brand ambassadors. An exciting trend addressed at the event was the need for retailers to adapt to the gig economy.
Allowing their store ambassadors to get up to speed and deliver an outstanding customer experience has technology at the center of this quick enablement. This furthers the point made by a few retailers - technology adoption should enable their business and not just adding new technology for sake of it.
Metaverse Hype - Here to Stay?
Speaking of new technology, the metaverse was discussed as a hot topic at Shoptalk 2022. There were significantly fewer mentions at NRF this year, but that does not mean it is dead in the water. Retailers have learned that selling NFTs to mimic the formula of their brick-and-mortar store in the metaverse does not lead to success.
The barrier to entry is still high, with one device per customer, and the need to invest in a headset has kept a full-fledged mass adoption out of the mainstream for now. For now, it's worth keeping an eye on how this evolves as there does seem to be value in having brand presence and keeping the possibility of it being another growing social ‘channel’ but is by no means a central strategic focus for any of the retailers at the event.
Payments: The Pace of Change is the Only Constant
Two key highlights here are real-time payments & wallet adoption in the US. Real-time payments beyond the merchant liquidity benefits are on the customer side. Gen Z expectations are instant transactions, rather than waiting a few days or weeks for a pending transaction impacts their bank balance.
Wallet adoption is another story to keep an eye on. While it is a larger piece of the puzzle outside of the US, there are clear benefits for customers and retailers of using a One-Click checkout solution like EP Payments to deliver increased checkout conversion, higher revenues, and better customer experiences. Chat with us today to learn how EP Payments can help ensure your customers have a frictionless checkout and payment experience.
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