Loss Prevention Research Council Weekly Series - Episode 89 - Disturbing San Francisco Store Closures and Top 5 NRF 2022 Innovation Takeaways
With Dr. Read Hayes, Tony D'Onofrio, and Tom Meehan
LPRC Kickoff was a great success! LPRC IGNITE is coming up on Feb 15th to the 16th! In this week’s episode, our co-hosts discuss the Top 5 Innovation Takeaways from NRF 2022, High Profile Retailers Visit the LPRC Labs, San Francisco Stores Continue to Close, and a Look at 2021 Online Holiday Shopping.
Listen in to stay updated on hot topics in the industry and more!
Consumer Insights: Holidays 2021
https://www.digitalcommerce360.com/article/consumer-insights-holidays/
Let me start with a January 2022 survey of over 1000 online shopping consumers conducted by Digital Commerce 360 and Bizrate for the 2021 holiday season.
- Where did consumers shop compared to 2020 – 61% shopped on Amazon, 55% shopped online, 30% shopped in online marketplaces other than Amazon.
- 62% ran into inventory issues with 37% on some products and 25% on many products. But shoppers adapted with 32% shopping early anticipating out-of-stocks and 31% spent more searching for in-stock products
- Compared to 2020, 22% used more frequently buy online pickup in store and 20% more curbside pickup.
- In 2022, 19% will shop in physical stores more, 51% the same, and 30% less.
- How did consumers react to more limited promotions: 30% spent more for free shipping, 28% spent more time hunting promotions, and 23% only bought when item was on promotion.
- Why did consumers select specific retailers: 64% for free shipping, 57% in-stock products, 48% previous experience with a retailer.
- Compared to 2020, 45% made fewer returns, 29% same, 4% more.
- Shoppers say retailers can improve the following to get them to shop more online: 43% having item in-stock, 35% delivery speed, and 28% less website activity / advertising tracking.
Interesting stats to help prepare retailers for next holiday season.
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On a more somber topic, a friend that lives in California shared this story facebook:
Remember that song “I left my heart in San Francisco”? Think they are going to need a new song. Very sad what is happening to that city and our state
For the city of San Francisco he listed the following:
- CVS Identifies 6 San Francisco Stores Closing in January
- Walgreens to Close 5 San Francisco Stores Due to Increasing Retail Theft
- Gap Closing 3 Stores In San Francisco's Embarcadero, Market Street, Stonestown
- Lowe's To Close 2 Bay Area Stores Deemed Underperforming
- Marshalls to close S.F. store, adding to Market Street's retail woes
- H&M Closes Its Massive Union Square Store
- DSW in San Francisco's Union Square to permanently close
- Uniqlo is Closing Its Flagship Union Square Store
Some of these are probably underperforming stores, but agree with my friend sad to see that retail theft also contributed to this. All of us need to keep working together including engaging with LPRC to attack more aggressively retail crime going forward.
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Top 5 Innovation Takeaways from NRF 2022
https://www.tonydonofrio.com/blog/retail/top-5-innovation-takeaways-from-nrf-2022.html
Let me add this week from my just published article on the top 5 innovation takeaways from NRF 2022.
As I wrote, attending NRF 2022 in New York last week on multiple levels was surreal. Three live offsite events that I attend every year were either cancelled, postponed to virtual or had last minute changes in locations due to COVID restrictions. Flights and hotels were changed three times to accommodate weather challenges in the South and the evolving customer meetings scheduled for the Big Show.
Multiple of the sessions that I attended had more people that I expected. Yet the main show floor was eerily empty of major exhibitors. Much innovation inspiration was possible by spending time in the busy innovation and start-up zones in the lower level.
Turns out fewer major booths and quality time with retailers more than offset initial COVID concerns. NRF did a great job with masks, using Clear to validate vaccinations, and providing COVID test kits to increase safety. The Big Show on some levels was actually getting too big and 2022 was a refreshing opportunity to moderately transition to the next phase of retail as we continue to emerge out of the pandemic.
NRF 2022 did demonstrate retail resiliency. Strong tailwinds from a positive retail holiday season opened this year's Big Show. In the November-December shopping season, USA retail sales grew 14.1%, "easily beating the National Retail Federation’s forecast and setting a new record despite challenges from inflation, supply chain disruptions and the ongoing pandemic."
The sessions that I attended were packed, including the opening session that included Target chairman and CEO.
One of my favorite quotes was from Target’s CEO where he spoke to retail resiliency and what comes next.
Quote “(Customers) came out to shop. They were out physically shopping in our stores. They returned to shopping malls. They were engaged. They wanted to be out there enjoying what retail can provide. It gives me incredible optimism for the future…We feel more optimistic than we probably did six months ago about where we are, but we’re still living with COVID.” Unquote
I Used NRF as a trendspotting event. For NRF 2022, here are my favorite five.
- Artificial intelligence is so yesterday - AI was everywhere, mentioned in both presentations and also integrated into many technology solutions. As I recently summarized for a publication in my predictions for 2022, if you have AI only in your future roadmap, you are already behind. Jim Roddyfrom RSPA summarized it best, "the top technology discussed at the show was AI (artificial intelligence) – in a landslide. The applications varied, but software, analytics, and insights based on AI were on the tip of nearly every vendor’s tongue."
- Those cameras have big data eyes - In 2021, we crossed 1 billion video camerasbeing installed around the world. The evolution of cameras into AI driven computer vision was prevalent at NRF 2022. From applications in retail stores finding issues with self-checkout transactions to distribution centers where 3D cameras identify products, those camera big eyes are everywhere.
- Those robots just keep on coming - From taking inventory using multiple RFID readers, to automating your warehouse, smart parcel pickup lockers, to delivering your goods to a home or business near you, more robots are coming.
- Retailers at the Center of Startup Innovation - From taking inventory using multiple RFID readers, to automating your warehouse, smart parcel pickup lockers, to delivering your goods to a home or business near you, more robots are coming. Another example, again from Walmart in partnership with DroneUp, delivering on that last mile using drones. Walmartis launching three full-time DroneUp airport “Hubs” for on-demand delivery operations. The first operation has already taken flight at a Walmart Neighborhood Market in Farmington, Arkansas.
- The store as an integrated smart digital canvas - A trend that I have directly discussed with retailers and that pleasantly I am seeing demonstrated in initial solutions at NRF is smarter integration of platforms across business functions. Below is an example from NRF 2022. This is a space that will deliver substantial opportunities for increased retailer profitability. More importantly, it elevates the importance of the physical store as a digital canvas to optimize engagement with consumers. More on this in future products, partnerships, and articles.
Bottom line, pleasantly surprised by the productivity of the NRF 2022 edition of the Big Show. As above indicates, more time was spent in the innovation and startup zones.
Multiple other trends including the continued growth of DTC, the growing presence of Amazon Go, stores that come to your house or business, China's retail evolution, virtual try-on solutions, and more sensors including LIDAR coming to a store near you, for now did not make this summary edition.
Another prediction that I made for 2022 is that we will learn how to live with COVID-19 and it will transition from pandemic to endemic. Thank you retailers for your valuable time and the reminder that it's time to get busy living, take measured precautions, and stop worrying about dying. Fully agree with Target's CEO, I feel more optimistic than six months ago about where we are and where retail takes us next.
