NRF 2021, the annual “Retail’s Big Show” event hosted by the National Retail Federation (NRF), is taking place online over six days between January 12 and 22. The Coresight Research team is presenting takeaways from each day of the event in separate reports: Read our coverage of day one, day two, and day three. In this report, we offer 10 key insights from day four.

NRF 2021 Day Four: 10 Key Insights

On the fourth day of NRF 2021, panelists and speakers discussed the importance of a strong supply chain to enable better supplier-retailer communication and facilitate reliable last-mile delivery. 1. Retailers and Malls Have the Opportunity To Be Strategic and Proactive in 2021 Deborah Weinswig, CEO and Founder of Coresight Research, hosted the “Offline Retail in 2021: A Data-Driven Look at the Trends That Will Define Retail Success in 2021” session with location data analytics startup Placer.ai. Placer.ai observes anonymized location data from 30 million active devices and analyzes this data using artificial intelligence and machine learning. Ethan Chernovsky, Vice President of Marketing of Placer.ai, said that the company sees two key trends amid the Covid-19 pandemic: the population shift from cities to the suburbs; and economic uncertainty, the consequences of which are likely to be longer-lasting. Looking ahead to the future of stores and malls, Chernovsky and Weinswig discussed the question of how US retailers will react once the pandemic subsides, as changed consumer behaviors could be maintained for the long term. Whereas 2020 was a tactical year for retailers, which had to take quick action to deal with urgent challenges, planning in 2021 can be more strategic, Weinswig emphasized. Retailers should be asking themselves how they could drive longevity, particularly in hard-hit sectors such as department stores. Look out for our separate report in the next few days with further highlights from this session. 2. Blockchain-Backed Supply Chain Visibility Helps Tell Brand Stories Raj Rao, General Manager of Distribution, Industry Platforms at IBM, spoke with Jose Antonio Camposano, Executive President of Ecuador’s National Chamber of Aquaculture, about the role that blockchain technology can play in ensuring sustainable practices through the supply chain and in promoting brand stories. Ecuador launched the Sustainable Shrimp Partnership in 2018. Discussing shrimp in particular, Camposano highlighted a problem that many Americans face with much of the food that comes to their table: They do not know its origin or really anything about it. Camposano highlighted two major issues with this ignorance. First, it makes it difficult for consumers to track the sustainability of a product. Secondly, the lack of transparency makes it difficult for different brands of shrimp and other foods to tell their brand stories. By utilizing IBM’s blockchain technology, shrimp brands are now better able to differentiate themselves to consumers by highlighting proof of their sustainable practices while also enabling shoppers to better select their food products based on a far greater knowledge of the items they see in stores, according to Camposano. 3. Transparency Is Paramount in Successful Sustainability Efforts Jordyn Holman of Bloomberg hosted Abigail Kammerzell, US Sustainability Manager at H&M, and Jennifer Keesson, US Sustainability Manager and IKEA, to discuss the role of sustainability in retail’s post-crisis recovery. H&M and IKEA, the panelists said, are both proponents of the “green recovery,” believing that sustainable practices can help retail recover and thrive from the Covid-19 pandemic. IKEA, which has done well through the pandemic as consumers are spending more time in the home and thus more money on furniture and home furnishings, has identified overconsumption as one of the key sustainability challenges that the company faces in this green recovery. In order to combat overconsumption, IKEA has prioritized the sustainable sourcing of its products and is encouraging consumers to use their furniture for longer and for multiple purposes. In these and other sustainability efforts, Kammerzell emphasized the importance of transparency. She explained that Gen Z, the generation widely considered to prioritize sustainability, grew up digitally native and are therefore keenly aware of how much information they have at their fingertips. These environmentally minded consumers have the knowledge base and motivation to carefully research and choose products based on sustainability, making it all the more important for brands and retailers to be transparent and cutting edge with their environmental efforts. [caption id="attachment_122047" align="aligncenter" width="700"] Jordyn Holman of Bloomberg hosted Abigail Kammerzell, US Sustainability Manager at H&M, and Jennifer Keesson, US Sustainability Manager and IKEA, to discuss retail’s “green recovery” from the Covid-19 pandemic
Source: NRF[/caption]   4. Strong Supply Chain Communication Can Save Time and Dollars One session on day four of NRF 2021 saw Elaine Gaydosh, Director of Retail Industry and Solution Strategy at Infor, host two Infor customers: snowboard and related accessories manufacturer Burton Snowboards, represented by Rachel Grogan-Cook, Senior Director of Global Supply Chain; and apparel brand Ariat International, represented by Ryan Bezenek, VP of Information Technology. Both Grogan-Cook and Bezenek highlighted how Infor’s supply chain management platform has helped them become more efficient in dealing with clients and communicating with suppliers. Prior to using the Infor platform, Grogan-Cook said that Burton Snowboards would manually fill in milestones for production on different spreadsheets for each of the 65 factories the company worked with every week. Predictably, this system caused a huge drain on time and had huge potential for error. Now, with Infor, the company can automate almost all communication with suppliers, ensuring accuracy in communication and freeing up their relatively nimble supply chain team to spend time on more thoughtful products. Infor’s solutions can be equally helpful from a client-facing perspective. By having real-time data on where products sit, both Ariat International and Burton Snowboards have found it easier to accurately communicate availability and fulfillment expectations to their customers. Infor’s supply chain technology may be especially valuable to many retailers today, in the midst of a rapidly changing retail landscape. 5. Analytics-Driven Innovation Is Imperative IBM Executives Stephen Laughlin and Chuck Schaeffer discussed the role that technology and data analysis can play in helping retailers to innovate more effectively. Schaeffer identified innovation as one of the top imperatives for retailers in 2021, saying that it is no longer an added bonus but table stakes in an increasingly fast-paced and forward-thinking industry. He outlined a four-step framework that retailers can use to generate innovation, with each step powered by consumer data:

• Identify problems that matter. Use consumer data and feedback to understand what the customer cares about and where things can be improved.
• Ideate solutions. Work on creative solutions to these problem points in areas of interest.
• Develop and test prototypes. Advance prototypes of solutions through high-velocity progressive iterations to determine the most efficient solution.
• Measure success. Use consumer data and feedback to determine how successful your innovation has been at generating an emotional response from the consumer. Consumers want to provide input to brands, and increasingly generate large quantities of valuable data, but companies must ask for and leverage this input effectively.

[caption id="attachment_122049" align="aligncenter" width="700"] Chuck Schaeffer, Business Sales and Delivery Executive, Microsoft Dynamics ERP and CRM, outlines the innovation process Source: IBM/NRF[/caption]   6. The Focus of Consumer Engagement Has Shifted from Delighting to Streamlining Salesforce leadership spoke on the importance of optimizing the ease of consumer engagement. Pre-pandemic, the company focused on the need to delight consumers, but now most retailers can see greater return on investment by focusing on ensuring that digital engagement with consumers is easy and accessible across channels. Tyson Brown, Area Vice President of Service Cloud Sales a Salesforce, spoke on the importance of broadening the definition of customer service to help create more favorable engagements with customers. Brown emphasized that successful retailers today are not burying chat functions and customer assistance resources deep in the backwaters of their website; they are displaying them front and center to encourage consumers to reach out and develop a more personal relationship with the company. 7. Last-Mile Logistics Needs To Be a Retail Priority Kelly Chen, Chief Operating Officer at innovation accelerator XRC Labs, highlighted the increasingly vital nature of a strong last-mile logistics network. According to Chen, the Covid-19 pandemic likely accelerated the shift to e-commerce in 2020 by five years. She cited statistics from Black Friday in November 2020 to illustrate this phenomenon: Overall, Black Friday in-store traffic was down 40–50% compared to the 2019 event, Chen said, while e-commerce sales on the day grew by close to 30% year over year. As a result of the unprecedented rise in e-commerce, demand for last-mile logistics has never been higher. Consumers now expect products of all varieties to be delivered promptly, wherever they are, and retailers that cannot compete with strong fulfillment networks may face an existential threat to their business. Chen also emphasized that the growth of last-mile logistics is not slowing any time soon—FedEx estimates that by 2026, the number of packages delivered per day in the US will double, with 90% of that growth driven by the rise in e-commerce. To avoid being left behind, retailers should prioritize last-mile logistics. 8. Stores and Malls Are Valuable, Underutilized Fulfillment Tools Discussing the role that physical stores can play in fulfillment, Bill Thayer, Co-Founder and Co-CEO of “Logistics-as-a-Service Platform for Retail” Fillogic, emphasized that retailers must look to capitalize on the assets they already have in stores—namely, people, products and infrastructure. These tools can be leveraged effectively to create a new fulfillment center in a store or shopping center without the high upfront costs of creating new infrastructure from scratch. To this end, Stephen J. Yalof, President and Chief Operating Officer at Tanger Factory Outlet Centers, said that the real estate investment trust takes the approach of being a fulfillment center on the back end and a shop on the front end. Another benefit of making the store a hub of fulfillment is its role in reverse logistics. Thayer said that malls and shopping centers can be ideal places to direct consumers to make their returns, since it gets them to a location where they are in a shopping mindset and primed to purchase new products. According to Thayer, stores and malls are unlikely to replace the role of traditional fulfillment centers, but they can help brands that might not otherwise be able to cater to the high delivery expectations of consumers. [caption id="attachment_122050" align="aligncenter" width="700"] Leaders from Fillogic, Tanger Outlet Centers, Uber for Business and XRC Labs discuss the role that physical stores play in fulfillment
Source: NRF[/caption]   9. Pandemic Pivoting Was About More than Business Simon Huck, Co-Founder and CEO of JUDY, an emergency preparedness brand, and Lauren Chan, Founder and CEO of Henning, a sustainable plus-size women’s clothing brand, discussed how they pivoted their nascent businesses during the height of the Covid-19 pandemic. Above all other concerns, both leaders highlighted how important it became to ensure that they did and said the right things to promote their respective brand’s image in a time of crisis. JUDY was launched in January 2020, almost frightening timing, and Huck said that paid advertisements felt in poor taste during the early stages of the pandemic. Instead, the company turned itself into an information hub, offering free factual public health advice via its consumer engagement channels. Both panelists asserted that as important as facing material challenges were, perhaps some of the most necessary pivots that their businesses made last year were in the ways that they presented their brands and worked with the community during the global uncertainty. 10. Personalization Is a Differentiator, but Remains Underutilized Online Andy Knosp, Head of Solutions Consulting at customer service platform Gladly, discussed personalization in the online shopping experience. According to Gladly, some 79% of US consumers believe that personalized service is more important than personalized marketing. Furthermore, 64% of US consumers reported to Gladly that a lack of personalization makes them feel “like just a number.” Arguing that creating a personalized customer experience should be a retail priority, Knosp said that 84% of US consumers will go out of their way to spend more money with a brand that provides them with great experiences. Further highlighting the importance of creating an engaging online experience, Knosp cited the generally low conversion rates in online stores—3% compared to physical retail’s 15–25%. He identified lack of personalization as a key factor and emphasized the importance of retailers investing in improving their online experiences to boost conversion rates. Knsop laid out four steps that retailers and brands can take to make their online experience rival the in-store experience:

• Embrace the friendly greeting. Knosp said that interacting with the customer as they “arrive” in the online store can help support higher conversion rates. In particular, he encouraged the use of personalized welcome messages on websites that invite consumers to interact digitally with the brand, a customer service associate or a chatbot. Once a consumer has been on a page for a while, Gladly’s solutions can trigger personalized recommendations and messages to customers and direct them to an appropriate associate—a subject matter expert on the products that the consumer is shopping.
• Consult like you would in person. Knosp recommended that retailers treat online customers with the same personalized attention that they would in-store customers. He advised that retailers should use consumer data from past purchases to better understand individuals’ preferences and how to best interact with them.
• Do not be shy about closing a sale. Customer service teams and contact centers in 2020 largely shifted away from call centers dealing with customer issues to a more hybrid model in which associates facilitate transactions with consumers. Knosp said that one easy way retailers can adopt this new model is by having customer service associates complete sales by taking payment via online chat or over the phone, rather than the customer completing the checkout process themselves online afterwards. This process would reduce friction in the purchase decision and minimize the risk of cart abandonment.
• Seek and get feedback. Knosp recommended that retailers issue automatic surveys following closed conversations with consumers, providing instant feedback on the customer experience.