Every year, the National Retail Federation (NRF) trade event in New York seems to get bigger and more global. 2014 did not disappoint with over 30,000 retail professionals listening to 300+ industry experts and visiting a record 200,000 square feet of exhibit space showcasing the latest technologies. Brazil had once again the largest contingent of attendees outside the United States.
NRF is a great stage on which to reflect the " Big Ideas " that are reshaping retail. The top 10 from NRF 2014 include:
Product or service differentiation has always been a strategy adopted by the retail industry towards finding that winning formula for growth. Differentiation can take many forms and include price, product quality, store decor, targeted consumer audience, and the business model itself. Two recent examples of successful retail differentiation:
Forbes Magazine recently recapped the successful Zara business model. A team of designers and product managers in Spain oversee design, sourcing and production of specific apparel categories. These individuals monitor closely the sales process of each apparel collection -- from the time the merchandise reaches the stores to the real time customer response.
-- How Piggly Wiggly Built Today's Self-Checkout Legacy --
"An invention acts rather like a trigger, because, once it's there, it changes the way things are, and that change stimulates the production of another invention, which in turn causes change, and so on. Why those inventions happened between 6,000 years ago and now, where they happened, and when they happened , is a fascinating blend of accident, genius, craftsmanship, geography, religion, money, ambition..." (1) -- James Burke
Fortune magazine recently published the 100 fastest growing companies. (1) Analyzing this year's list:Revenues for the top 100 global fastest growing companies totaled over $627 Billion, up from $390 Billion a year ago. Apple, which was part of this group, had revenues of $169 Billion and profits of $39.7 Billion.
"James Nesmeth...was an average golfer consistently shooting in the mid-90's, until he developed a unique way of improving his golf game. It came while he spent seven years in North Vietnam as a prisoner of war. During those tortuous seven years, Nesmeth lived in a solitary confinement....To keep from losing all hope, he realized that he needed to do something to occupy his mind. So every day he played 18 holes of golf in his mind. He imagined everything in vivid detail...the country club...the smell of the fresh cut grass...the grip of the clubs...practice his swing many times until he perfected it....Upon returning to the actual golf course, he found that he had shaved 20 strokes off his game! By visualizing a perfect game every day for seven years he literally brought his score down to a 74." (1)
Around the world RFID continues to be piloted in hundreds of retailers. By far the vast majority of the activity is centered in the specialty soft lines verticals. A handful of major retailers primarily in Europe and North America are post the pilot phase and in full deployment. Retail RFID industry adoption had multiple starts and it is finally coalescing around item level visibility as the foundation to transformational onmichannel retailing. For all the activities and discussions, much more needs to be done to speed up the adoption of this high potential retail technology.
This week a video from the IHL Group and a couple of IT posts sparked some thoughts on the evolution of retail as it is accelerating on a technology shoestring budget.
According to the latest 2013 "State of the CIO" survey from CIO Magazine, the average IT budget as a percentage of revenue is 5.2%, and it was up from 4.7% the previous year. Contrast this to the retail industry where according to Jerry Sheldon from the IHL group, the average IT spend as a percentage of total sales ranged from 1.1% to 1.2%.
The latest BrandZ Top 100 Most Valuable Global Brands survey has insightful data for both technology companies and the retail industry.
For the retail industry, the brand value data projects continued economic recovery especially in the United States and in luxury brands.
New technologies such as RFID, NFC, augmented reality and gamefied retail apps will directly interact with consumers based on predictive behaviors identified by "Big Data". - Tony D'Onofrio
This month RIS News published a great post on 12 key takeaways from a recent Onmichannel Merchandising Symposium.
"Retail IT is being transformed. CIOs are shifting from proprietary systems to package solutions and from an emphasis on cost reduction to a solid bump in IT capital spending. A strong customer focus means CIOs are fixing their attention on channel integration and analytics that will help them spot and anticipate shopper preferences more quickly." (5) - NRF Stores Magazine, April 2013