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NRF BIG Show 2018 Highlights

By David Hochman | January 24, 2018

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Embracing emerging technology is key in powering growth at retail.

By: David Hochman

2017 was quite a year for the retail industry, with game-changing acquisitions, technology disruptions continuing at a lightning-fast rate and a new term, the “Retail Apocalypse,” used to describe the glut of store closing announcements, became popular.

If that gives off the impression that the retail industry is hunkering down and steeling itself for a tough period of retrenchment, think again. At the NRF 2018: Retail’s Big Show in New York City, held Jan. 14-16 at the Jacob K. Javits Convention Center, the message was quite different.

While predicted tax cuts, the best holiday shopping season in eight years, and overall improved consumer confidence is driving a lot of industry optimism, the big story around the Big Show is technology transformation or disruption and what that really means for retail.

NCR OPTIC Outdoor Payment Solution in use at a Mirabito convenience store in Norwich, N.Y.

Any retailer that embraces the concept of solving problems using emerging technology can compete with (or at least co-exist peacefully with) the Amazons and Walmarts by cultivating a culture of innovation.

Transformation Strategies
This topic was front-and-center during a panel on Sunday, Jan. 14, “Powering the store of the future with successful digital transformation strategies,” moderated by Hansang Bae, CTO of Riverbed Technology. Darren Wood, tech innovator at Foodstuffs, the parent company of New Zealand grocery and c-store co-operative Four Square, New World and Pak’nSave, told the packed room that in order to foster that innovative culture, especially one that embraces emerging technology, keep in mind that building solutions and features must be based directly on customer input.

Also, for larger organizations like Foodstuffs, strong board oversight of technology investments and programs is crucial. However, he added, “one can’t let corporate governance slow down momentum.” An IT oversight committee with one or more IT expert members is crucial. “Work hard to maintain good relations, avoid corporate politics at all costs, and keep people happy.”

After the panel discussion, Wood, originally from the U.K., told me that prevailing corporate culture in New Zealand for retail companies is quite conducive to innovation, in part at least due to the fact that much of the country’s population outside the large cities is rural and isolated.

Bae also provided an example of emerging tech relevant to the c-store space when he discussed how a retailer in South Korea displayed posters with images of food products tagged with QR codes in the mass transit stations. Customers could simply scan the QR codes with their phones, and based in where they were in the transit system and where they lived, delivery of the food they selected will be timed to coincide with their arrival home.

I also attended an interesting session on Monday, “How artificial intelligence (A.I.) is revolutionizing in-store operations and merchandising.” Professor Irad Ben-Gal, the co-founder and chairman of CB4, head of AI and Business Analytics Lab at Tel Aviv University and formerly visiting professor at Stanford University, confirmed for the audience that although A.I., and related terminology such as Machine Learning, Deep Learning, Neural Nets, etc., have become so overused to the point where much of it is simply marketing buzzwords, but the reality is that these tools can revolutionize your operational and merchandising decisions.

One of the presenters, Joe Gauthier of Wesco, shared the results of an A.I. program they launched with CB4, in 2017. “The CB4 weekly recommendations have been an awesome tool for the Wesco Store Operations Team,” he said. “The stores spend 5-10 minutes per week going over the merchandising recommendations, making adjustments and responding back to CB4 via the mobile application with the action they’ve taken. CB4 calculates the results weekly and provides Wesco with a monthly ROI. In the first year of the program Wesco saw a sales lift of 1.6% that can be attribute to CB4.” As director of sales analytics, Gauthier is responsible for overseeing the CB4 process for the 53 convenience stores.

There were scores of booths with “A.I.” plastered across their signage and multiple sessions with titles like “How A.I. is currently powering retail’s growth,” and “You can’t spell retail without AI,” and my favorite, “Retailing ethics in the age of artificial intelligence.” Some retailers walking the floor were wondering aloud how much of the A.I. content and marketing is hype.

Jay Sweeney, vice president sales at Daisy Intelligence, a Toronto-based A.I. startup, advised that “A.I. is at the top of a hype cycle, and there are pretenders that will be weeded out, so retailers who may be considering an investment in A.I. should ask, what’s the output? It’s ultimately about proven results.” Gartner advises that companies “distinguish between faux and real A.I. offerings” by asking vendors to “describe the analytical model used in their A.I. solutions and, from there, infer how well it might perform in a given situation.”

Staff-free stores, a growing international retail industry trend with clear implications for the c-store industry, were discussed by Intel, which is heavily invested in the usage of its IoT and other technologies in retail. They provided the example of JD, one of the largest online retailers in China. Intel reported that JD, which opened a staff-free c-store called “D-Mart” at its company headquarters, “leverages a suite of Intel responsive technologies that range from edge computing to digital signage to point of sale (POS) solutions.”

NCR demo’d their OPTIC pay-at-the-pump interface. While the solution isn’t new—Speedway has been using it in their stores for over a year—NCR is positioning it as the omnichannel solution for c-stores; opportunity to push out promotions and specials and convert consumers at the pump to in-store shoppers, which makes sense, because where else in the industry does the retailer own 5-7 minutes of the consumer’s undistracted attention, directed at a 12-inch HD widescreen?

Dave Hochman is a frequent contributor to several publications, is the founder of DJH Marketing Communications, Inc., a PR and marketing consultancy with strong specialization in the retail economy. NRF 2018 marks his 15th year covering the event. Follow Dave on Twitter @davehochman

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