Robert Kaufman, CEO at Parker Avery, continues our special ‘NRF News’ series with his insights from NRF’s Big Show.
Recapping NRF’s Big Show 2015 – Focusing on the Fundamentals
NRF’s Big Show convened in New York City again this January, with an estimated 33,000 retailers and vendors braving the typically cold, windy – and often soggy – NYC winter weather. Some of the liveliest topics this year were somewhat similar to last year – still a lot of talk about mobile, RFID and Product Lifecycle Management (PLM). And of course, discussions continue about Omnichannel. Innovative technologies that involved 3D, digital wallets, interactive displays and virtual imaging gained ground from 2014, and these were both remarkable and fun to witness and trial.
But as Parker Avery observed last year, there was also a high degree of interest around modernization or “basic foundational investments.” This points to the fact that many retailers started down an Omnichannel path over the past few years, but quickly realized that anything beyond pilots and test projects required some fundamental elements (e.g., enterprise inventory) that they might not be able to support without new basic solutions and clean data. Retailers are discovering that while Omnichannel may be a holistic strategy, it is in essence a collection of capabilities – support for a multitude of customer touchpoints and various fulfillment and return options, as well as enhanced employee engagement and more. These capabilities are not islands – they must be part of overall strategies across Merchandising, Marketing and of course IT. The underlying, foundational technologies to support Omnichannel strategies need to be modern and flexible with the ability to seamlessly integrate with a variety of internal and external systems.
Parker Avery also saw an unexpected high degree of interest in planning solutions: Merchandise Financial Planning, Assortment Planning and Demand Planning / Forecasting. Quite a few retailers, in all segments and sizes, continue to run a significant portion of their business with heavy reliance on spreadsheets. This challenge, coupled with the use of antiquated planning solutions and dated, cumbersome business processes, is pressing many retailers to explore updating their systems and processes with the goal of enhancing their abilities to plan and manage differently and more competitively in an Omnichannel world.
On the PLM front, discussions centered on similar new capability themes as those discussed last year: 3D, mobile and support for social media crowd sourcing. While these capabilities are new, innovative and valuable for some, most companies are still looking for a more basic fundamental set of functionality. Though not “sexy,” improvements in interactions between design tools and PLM solutions were not widely heralded but important differentiators for some vendors. Usability, the complement to meaningful functionality, was also under-marketed, but Parker Avery found many companies are seeking solutions that will be more readily adopted, to ensure their investments will be embraced by their end users for many years.
Further down the supply chain, retailers and software vendors are continuing to increase their focus on supply chain collaboration. The days of pitting suppliers against each other to squeeze out an extra penny or two are long gone for most companies. Supplier collaboration solution capabilities go hand-in-hand with the newer mindset of building collaborative partnerships between retailers and suppliers. Quality, compliance, and supplier score cards are even more necessary than ever as progressive retailers are using these solutions to not only ensure social compliance and high product quality for their consumers, but as a means to measure suppliers on key metrics and offer learning opportunities to improve supplier performance.
All in all, the vast majority of retailers Parker Avery met at The Big Show found the speakers and exhibitors to be quite interesting and beneficial. Most we spoke with were not just looking – they were discussing specific actions and projects that were either underway or planned in the near-term. And while it was exciting to see some of the new, “flashy” and more innovative technologies, it was even more compelling to find that retailers have realized that without a solid foundation of systems, good data and efficient business processes, they will not be able to move the needle sufficiently, create the desired customer experience and differentiate themselves from the pack.