This year’s National Retail Federation Conference & Expo closed its doors to the icy New York air on 18th January. The exhibition floor had been methodically cleared, beginning at 5PM the previous evening when the show’s 25,000 delegates began to wend their way along the city’s streets and avenues either to industry parties or late flights home.
A good portion of those delegates (more than 6,000) were returning to homes outside the US, marking a record in both overall turnout and the quantity of international attendees at the biggest of “retail’s big shows” in their one-hundred-year history.
I was one of those international delegates, invited to the NRF 2012 show as a member of the press. I came to learn more about the state of the global retail market, gain some insight into the emerging worldwide trends that hope to reinvigorate it, and to better understand the place of Product Lifecycle Management (“PLM”) in both.
The subtitle for this year’s event read “Retail’s new rules: engage and evolve”, which was as accurate a summary as I can imagine. There is no question that retail – as with all consumer-facing industries – is struggling in today’s difficult economic climate, and that the workforce and associated industries that rely on it are suffering in turn. As NRF CEO Matthew Shay outlined in his opening address, retail supports one in four US jobs (more than 42 million jobs in total), making it the single largest employer of any industry. Whether it can continue to support that workforce, though, is another question entirely.
Broadly speaking, as the cost of living increases, people have fewer and fewer spare dollars each month, consumer spending drops, and many retailers find themselves having to compete for a smaller share of disposable income than ever before. Despite the preponderance of “big name” retailers on the NRF stage, of the 3.6 million retailers in the US more than 95% operate in just one location, without the added security that national or multinational reach can bring.
[quote]While his generation were always confident that they would be able to make a living, the situation today has “gone to the core of people’s sense of who they are and what they’re worth”, Clinton said.[/quote]
In a very real sense Retail Means Jobs. Indeed, the NRF’s initiative of that name raised an astonishing $350,000 for the Retail Orphan Initiative during the five days of the show. And what became clear throughout was that retail must evolve to keep pace in a difficult climate and engage with less-willing customers to remain profitable if it intends to support or grow its existing workforce.
Fortunately, with 39% of attendees being C-level or senior executives, the Jacob J. Javits Centre halls and showfloor were thronged with the people best poised to make that happen.
While Saturday and Sunday played host to the international and opening night receptions respectively (along with several “super sessions” on Sunday), the big show kicked off in earnest on the morning of Monday 16th January with a keynote speech from former US President Bill Clinton.
The North Hall was packed to the rafters, and it seemed as though almost everybody who wasn’t actively involved in setting up a booth had turned out to hear Pres. Clinton’s address. I sat in the cordoned-off press area, just able to pick out the speakers in the distance. Following a brief introduction by NRF Chairman (and CEO of Macy’s) Terry Lundgren, Pres. Clinton humbly took to the stage, declaring this to be “a bigger crowd than I usually draw”.
Titled “Embracing Our Common Humanity”, Clinton’s address drew on his work as a private citizen and with the Clinton Foundation to act as a stark reminder of the economic realities facing not just the retail industry, but the world at large. As with the Retail Means Jobs initiative, Clinton drove home the fact that the current financial crisis has impacted on more than just ephemeral economics. While his generation were always confident that they would be able to make a living, the situation today has “gone to the core of people’s sense of who they are and what they’re worth”, Clinton said.
After explaining how he almost wound up working in retail himself – selling pristine editions of vintage comics alongside his teenage job in an Arkansas grocery store – Clinton sought to remind retailers that they are responsible for 20% of the United States’ GDP, as well as being the gatekeepers for the largest workforce of any industry. Those figures place a considerable burden on the shoulders of retailers, but it’s one that goes beyond cold statistics. He explained that, “if [retailers] are leading the country out of a recession, you are doing something far more important than getting people back to work and putting money in their pockets”.
Far from being US-centric, though, Clinton’s speech reminded delegates that we are today “interdependent in a way we have never been before”, and discussed how all industries and all nations share both the opportunities and the responsibilities of building a prosperous future for our shared world.
[pullquote_right]By far the most prominent point of interface between expanded and core PLM on display were the various product image capturing and virtual sampling tools.[/pullquote_right]The Javits Centre is a gigantic building – so much so that I was completely oblivious to another large conference and exposition running concurrently on the lower floors – so I don’t mean it lightly when I say that the NRF expo floor was overwhelmingly large.
Split into three different areas, with interconnecting hallways at convenient locations, there seemed to be little logic to the way that booths were allocated throughout the cavernous space. Unlike IMB, though, this event had such a broad remit that it would have been nigh-on impossible to segregate the different retail processes to separate areas of the showfloor.
Customer engagement was unquestionably the predominant trend on display. Point of sale solutions and in-store product visualisation technologies were out in force, with every other booth displaying an eventually-very-similar-looking series of “revolutions” to the physical or online shopping experience. It is probably due at least in part to the nature of the solutions themselves – core software tends to look like a series of prettied-up spreadsheets, while gesture-based customer portals tend to look like a glimpse of the future – but there was a great deal of focus placed on direct retail interfaces and comparatively little attention given to the enterprise software that allows so many of those high-profile retailers to create products in the first place.
PLM in particular did not feature prominently on the showfloor. Notable exceptions included PTC, ecVision, Epicor, Jesta I.S., and Gerber Technology, all of whom had PLM solutions (either independently or as part of an extended product development suite) on show. WhichPLM also had the pleasure of meeting with BMS, Visual 2000 and FastFit360 outside of the show. Dassault Systemes, too were present in their role as Microsoft partners, demonstrating the 3D visualisation software 3DVIA, while Infor (now owners of two PLM solutions following their 2011 acquisition of Lawson) had a conspicuous, PLM-shaped hole in their otherwise comprehensive product offering.
It is hard to draw any meaningful conclusions from this, though. Clearly PLM vendors are making an active decision not to demonstrate their solutions at NRF, but representatives of most (if not all) of the major vendors were present on the showfloor at one point or another. Perhaps PLM does not stack up well alongside glamorous storefront technology; a noisy convention centre crammed to bursting with interactive signage is hardly the ideal place to demonstrate a comprehensive Bill Of Materials, after all. Perhaps the money required to have a significant presence at NRF (and I understand floor space does not come cheap) is being spent elsewhere? I certainly don’t believe that PLM is being actively marginalised, and I expect that as the PLM umbrella grows (taking in the kind of solutions collected here on WhichPLM as “E-PLM”) so too will its presence at shows like NRF.
[quote]As customers increasingly turn to online retail, flagship stores need to do everything they can to differentiate the bricks-and-mortar shopping experience.[/quote]
There’s no denying, though, that the range of customer engagement, business intelligence and product image capturing technology on display was intoxicating. Matthew Shay revealed in his opening address that some 70% of customers shop online or on mobile devices, so it’s no surprise that the integration between social media, mobile technology, online shopping and physical retailing was a cornerstone of many strategies.
At Microsoft’s gargantuan booth, various partners (including IdentityMine and Emerging Experiences) demonstrated the potential of Microsoft’s multi-user, multi-touch hardware Surface in to personalise the retail environment. Customers with a Windows Phone are able to compile a shortlist of products at home and then, by depositing their phone on the in-store Surface, compare those products, access special offers, create a virtual shopping cart and then collect their purchases. Similar use was made of Microsoft’s Kinect (just recently announced for business use) and equivalent range-finding cameras by both Microsoft partners FaceCake and in the form of Cisco’s StyleMe (PDF) to create augmented reality applications for retail. Using gestures, shoppers are able to select from popular items and looks before having them superimposed on their digitised selves – turning when they turn and moving when they move. The technology is still a little crude (and prone to interference when more than one person enters its field of vision), but the concept is compelling and here at WhichPLM we look forward to seeing how developers are able to leverage this kind of technology for early trend analysis and product development. As customers increasingly turn to online retail, flagship stores need to do everything they can to differentiate the bricks-and-mortar shopping experience with these sorts of engaging, augmented reality applications.
[quote]Retailers are responsible for 20% of the United States’ GDP, as well as being the gatekeepers for the largest workforce of any industry.[/quote]
As I mentioned in my “Best of NRF 2012”, I was particularly taken by the potential of one such retail technology: Google Wallet. The search engine giants had a considerable presence at the show (demonstrating everything from their long-established Adwords to Google Commerce), but Wallet was by far the most pertinent to the apparel shopping experience. Google has some intimidating partnerships in place, and it appears as though contactless payments – using an appropriately-enabled Android Phone – will become a reality in the US in the very near future. I look forward to seeing how far the UK retail industry is willing to adopt this kind of forward-thinking technology to reinvigorate the shopping experience.
[pullquote_right]A noisy convention centre crammed to bursting with interactive signage is hardly the ideal place to demonstrate a comprehensive Bill Of Materials, after all.[/pullquote_right]By far the most prominent point of interface between expanded and core PLM on display were the various product image capturing and virtual sampling tools. While customers are engaging with virtual representations of retail products in-store, designers and garment technicians are increasingly reducing their reliance on costly physical sampling by analysing and annotating detailed images of product prototypes. On the showfloor I was treated to a demonstration of the new StyleShoots solution from iShopShape. Using a high resolution camera, lightbox and wirelessly-linked iPad, StyleShoots captures a single view of a particular garment (rather than a series of images or 3D model) in exacting detail, with no background interference. The solution was shown to me capturing an intricately detailed scarf; StyleShoots was able to create a detailed, transparent image of every last stitch in less than thirty seconds, which could then be used to quickly and easily enter product image data into a PLM solution.
At the opposite end of the image capture spectrum were expanded PLM supplier FastFit360, whose eponymous solution captures an image array that allows designers and garment technicians to rotate a 360-degree view of a given product, providing feedback and annotations in a collaborative online environment. WhichPLM were shown the FastFit360 solution in-situ at legendary US retailer Macy’s, where a staggering 70% of US households shop at least once a year. I was later invited to attend the company’s lavish “Cloud” event at a nearby rooftop bar, where representatives of some of the country’s highest-profile retailers were silhouetted against the frost-limned skyscrapers of Manhattan.
This is not to say that core product lifecycle software was neglected entirely, though. Merchandise planning, assortment planning, workforce management and business intelligence were the most obvious components on display, with Torex, daVinci, Kronos and Panorama Business Intelligence all demonstrating their solutions. Torex in particular were keen to draw attention to their new integration to Gerber Technology’s YuniquePLM solution, although I only experienced this as an overview – not a functional demonstration.
Away from the crowded showfloor and beyond Pres. Clinton’s keynote, the range of “super sessions” (or, in layman’s terms, talks) at NRF 2012 did not disappoint. A trio of representatives from Leonard Green & Partners, The Container Store and Whole Foods (whose Co-CEO later accepted the award of Retail Innovator Of The Year on behalf of the company’s 65,000 employees) gave an impassioned insight into “Conscious Capitalism”, tying onto Clinton’s earlier anchor of the often-overlooked humanitarian cost of business. Even the typically-low-key final morning saw CEOs from LocalResponse, OpenSky, Quirky and Zaarly take the stage for a lively Q&A looking at how social media is working to empower consumers, and how businesses are (or in many case are not) using that opportunity to engage with their audiences.
Particularly interesting was a keynote speech from David Lauren, Executive VP of Advertising at American institution Ralph Lauren entitled “Keeping a Classic Brand Modern”.
Lauren walked his audience through a potted version of the forty-five-year history of the Ralph Lauren brand, taking them from unknown necktie designers to permanent fixtures on Madison Avenue and the Wimbledon centre court. [pullquote_right]The mindset required to engage and evolve, though, can only come from within.[/pullquote_right]Ralph Lauren were particularly notable for being one of the first luxury brands to embrace online retailing at a time when their counterparts believed that the web would either commoditise luxury brands or cannibalise sales from their own bricks-and-mortar stores. Lauren explained his eager adoption of online retailing as being just part of a larger strategy he terms “merchantainment” – a slightly unwieldy portmanteau of merchandising and entertainment. Over a series of high-gloss slides and videos, Lauren explained that whatever the medium – print, online, store window or holographic projection – Ralph Lauren is focused on telling stories through its collections. Through conjuring up hyper-real worlds and using their marketing as insights into those aspirational lifestyles, Ralph Lauren seeks to keep its customers engaged by allowing them to buy into the dream. In keeping with their early-adopter ethos, it’s no surprise that Ralph Lauren have embraced the mobile revolution, allowing their customers to design shirts in a dedicated app and buying out the advertising space in the New York Times iPad app for the entire month of September.
The lesson Ralph Lauren has to teach all retailers, and particularly those in the apparel industry, is that opportunities are there to be embraced. Whether it’s virtual sampling, in-store augmented reality, merchandise planning or core product lifecycle management, the tools required to remain profitable and competitive in the retail industry are out there – on display at shows like NRF.
The mindset required to engage and evolve, though, can only come from within.