The National Retail Federation’s Big Show took place last week in New York City, with the overarching theme of “Break through.” As we are staring down a potential recession, the biggest names in technology, including Microsoft, Google, Amazon, Salesforce, Oracle, and SAP, showcased their latest innovations with a clear focus on both resilience and customer experience — two critical priorities for navigating what’s to come. Here are a few of the themes and releases that caught my attention.
AI in Retail Playing a Bigger Role
Retail has changed a lot in the past few years. Thanks to a global pandemic, more and more shopping is being done online. At the same time, customer demands for seamless digital experiences across mobile, web, and social has also increased. With such a dynamic digital retail space, it’s no wonder retailers are looking to AI for greater insight.
In advance of this year’s NRF, Google Cloud showcased a number of new and updated AI solutions that could help retailers improve inventory accuracy, create more seamless online experiences, and hopefully improve their bottom line, even among ever-changing customer sentiment.
Browse AI is part of Google Cloud’s Discovery AI solution for retail. It uses machine learning to optimize the ordering of products on a retail website once a shopper chooses a certain shopping selection, such as Men’s Clothing or Housewares. In the past, retailers have sorted items based on bestsellers or seasonality. Browse AI will instead self-curate on an ongoing basis, saving time and—ideally—increasing sales conversions overall. Google Cloud also added upgrades to its current Recommendations AI to make digital commerce more personalized. The feature allows an e-commerce site to decide what product recommendation panels will appear to unique shoppers at the page level.
In addition, Google Cloud’s Vertex AI Vision will help retailers keep a tighter eye on empty shelves, something that can cost thousands, if not millions, in missed revenue every year—not to mention customer loyalty. Using machine learning models for both product and tag recognition, the AI-powered shelf-checking technology helps identify products at scale based on visual and text features. This in turn will help customers build greater trust in product availability, which has been problematic in the past few years.
Lastly, Google Cloud has added a new revenue optimization feature for online retailers. The technology combines machine learning and DeepMind to determine the right balance between customer satisfaction and revenue lift for retailers using things like product categories, price, clicks, and conversions.
For its part, Microsoft is also looking to improve AI in retail, helping organizations get more from their data in less time. With managed databases like Azure Synapse and Cosmos DB, in conjunction with the Microsoft Intelligent Data Platform, retailers can keep track of their data in real time and ensure that the right people have what they need to make informed decisions. This can all be governed and accessed through one single pane of glass with Microsoft Purview. Organizations have a lot of data, being able to effectively use that data could be a difference maker.
Beyond the big names, a number of smaller vendors caught my attention as well. Scandit showed some very interesting AR/XR use cases for front line workers and consumers that help identify correct pricing, misplaced items on shelves, and more. There were a lot of other booths showing off XR, AI, and IoT technologies to deliver frictionless shopping experiences. Something that will continue to be in focus in the coming years.
More Personalized Customer Experience
Google wasn’t the only provider making advancements in the cloud. Oracle’s retail platform aims to make it easier for retail businesses to manage things like pricing and promotion while also building customer loyalty. Oracle’s Price Hub will grow Oracle Retail Merchandising Cloud service to automate pricing updates across thousands of products and help maximize both sales and margins. Similarly, its Retail Customer Engagement Cloud will help retailers—you guessed it — drive revenue and profits by making more personalized offers to customers. On the flip side, customers will benefit from offers that actually appeal to them and their lifestyle. Price Hub includes pricing strategies to help automate price changes based on things like cost, margin, area or competitor. It also includes features to manage things like clearance and promotions events.
The System Integrators also made a splash when it came to next generation customer experience. With the volume of technology that is bridging the powerful tech-enabled experience of e-commerce with the demand for in-store shopping experiences, it shouldn’t be a surprise to see an opportunity for large system integrators to play a role. Capgemini hosted some of the world’s largest retailers and retail thought leaders at its Retail Lounge just five minutes from Javitz where it focused on how the unprecedented disruption of recent years has created a plethora of opportunities for retailers to differentiate—and no disruption was more in focus at this year’s NRF than the supply chain.
Resilient Retail Comes into Focus
We all know that the last three years have been full of upheaval for retailers. Supply chain issues, pandemic-related issues, and a host of other changes have shaken up the industry. At the end of 2022, we collaborated with Microsoft on a report to determine how retailers are handling these issues and what they are focusing on in the future to be more resilient. Microsoft executives, Alysa Taylor and Shelley Bransten teased some of the findings of the report, which will publish in early February, at NRF.
The retailers who consider themselves to be resilient or very resilient use a mix of technologies like AI, media advertising, dynamic pricing, capabilities, and analytics, more than their non-resilient counterparts. These retailers are also focused more on customer experience and mitigating supply chain disruptions in the future. Microsoft, for its part, is committed to helping retailers improve resiliency through the Microsoft Cloud for Retail and a few new solutions which were release at NRF.
First up is the Smart Store Analytics solution which will provide analytics for the physical store. Retailers can monitor shopper behavior across the store from discovery to purchase. Ultimately these insights will help deliver a better shopping experience for consumers.
Microsoft also announced the release of Store Operations Assist which will provide store associates with a single pane of glass with access to all operational information in the physical store. By empowering associates with information, they can make decisions faster, prioritize needs across the store, and better serve customers.
Environmental, Social & Corporate Governance
Last year, sustainability was a hot topic at NRF, with several keynote panels taking place on the topic. That momentum continued this year. The tech sector has stepped up recently to help end the global climate crisis. For its part, NRF encouraged businesses, such as SAP, to discuss ways sustainability can be interwoven more seamlessly into the supply chain. Additionally, a wealth of other tech companies, such as Dayrize (impact assessments of consumer products), Expivi (uses 3D configuration and AR to go from make-to-stock to make-to order and reduce waste); and HIVERY (allows businesses to go hyper-local on product, space, promotion, and price) were on-hand to share new and easier ways the retail industry can improve its environmental footprint. I’m sure this will be a topic for years to come.
Wrapping it Up
As with CES, not all technology we saw at NRF 2023 was new. Much of it built on previous years’ technology. That’s still great news. It means the technology they’re developing works. And it’s relevant. And it’s gaining traction throughout the retail ecosystem. These technologies will make it easier to personalize for customers, at scale, while bringing powerful analytics that used to be for e-commerce into physical commerce. It will make it easier to keep data safe, globally. And it will create new opportunities for meaningful engagement across all channels. Perhaps most importantly, the developments we saw this year will make it easier for retail businesses to create business insights, at scale. This, in turn, means more resilient retail. It will be easier for retailers to stay profitable and relevant, despite ever-changing customer sentiment.