Last year, the National Retail Federation’s annual show put the spotlight on the return of physical retail and AI. This year, it’s all about checking out how these innovations are hitting the sales floor and making a real impact.
“It’s our Super Bowl,” said Eric Olson, vice president of education at NRF, who spoke on NRF’s Retail Gets Real podcast on Tuesday (Jan 2).
And unlike last year’s focus on the resurgence of physical retail and advancements like artificial intelligence (AI) to improve in-store experiences and optimize data analytics and personalization, this year’s show, running through Tuesday (Jan 16), will center around translating those innovations into actionable results.
At NRF 2024, retail experts ranging from Walmart’s U.S. President and CEO John Furner to Ulta Beauty CEO Dave Kimbell and Salesforce Chair and CEO Marc Benioff share strategies such as AI-driven personalization and point-of-sale technologies, with the aim of enhancing operational efficiency and enriching customer experiences.
Moreover, NRF 2024 is looking to overcome obstacles from 2023 such as retail shrink, which has plagued the retail sector, and inflation by focusing on long-term business growth, prioritizing high-quality customer experiences, and streamlining operations.
Last year, many retailers’ profits took a hit due to “shrink,” also known as lost inventory. Now investors and analysts are looking forward to hearing more from retail chains about this problem.
“We want them to talk about what the heck is going on, what are you doing about it, and how should we bake this into their models?” Dean Rosenblum, a senior U.S. retail analyst at Bernstein Research, recently told the WSJ.
Last year, retailers faced approximately $142 billion in inventory shrink, marking a 25% increase from the previous year.
Yet, according to Dylan Carden, an analyst at the bank, recent reports from retailers may indicate a potential exaggeration in these figures. He contends that considering shrink as a percentage of sales offers a more precise representation, smoothing out the impact of inflation.
According to a recent PYMNTS report, consumers anticipate a decrease in the rapid inflation rate in the coming months and years. However, they are also scaling back their spending plans, indicating a potential inclination to rebuild their savings. This presents a mixed set of signals for merchants — and merchants are going to have to get innovative and personalized to persuade consumers to spend.
The decision to scale back is reflected in findings from PYMNTS Intelligence last year, revealing the toll of inflation on consumers. About eight out of 10 have depleted their savings to cover bills, and approximately 12% spent more than their earnings in the preceding six months, which includes the period before the holiday shopping season.
The impact is most significant for those earning between $50,000 to $100,000, with only 37% in the middle-income segment and 45% among high earners expecting their savings to increase in the near term.
Read more: Consumers Temper Their Spending Plans Despite Slowing Inflation
“We have 50-plus companies showcasing this year,” said Susan Newman, SVP of Events at NRF, who also spoke on NRF’s Retail Gets Real podcast.
Newman highlighted the prevalence of robotics and how retailers are utilizing them for tasks that people may not want to do or to enhance efficiency.
On Sunday, Stripe, SSENSE, and Wayfair collaborated to discuss how enterprises incorporated unified commerce into their core business models. The focus was on leveraging data analytics to understand customer behavior and provide personalized shopping experiences.
Marko Ivanovic, director of digital payments at Adidas, told PYMNTS, “We clearly see the shift to mobile in general. We’re already offering a range of mobile payment methods, like Apple Pay, Google Pay and WeChat Pay. We also launched PayPal in stores. For us, it’s members first, one-click checkout, especially for the young generations that do everything with their mobile.”
Read more: Merchants Say Defeating Checkout Friction Defines Retail’s New Reality
One discussion set for Monday aims to explore bartaco’s story as a dine-in restaurant, tracing its journey from identifying the need for a straightforward checkout experience to seamlessly integrating Amazon Pay. Through bartaco, Amazon Pay isn’t just confined to online transactions anymore; now it’s stepping into the realm of in-person experiences.
Retailers are advancing into a new phase of technological innovation centered around AI and machine learning (ML). AI has become the most efficient means for retailers to extract value from data. This session is expected to provide insights into how Walmart leveraged AI to foster growth and gain a competitive advantage across the business.
PYMNTS recently reported on Walmart’s aim to become a “customer’s concierge” through its investments in AI. It raises curiosity about the specific ways in which the retailer is utilizing AI to achieve this goal.
Read more: Walmart Aims to Be an AI Concierge as Amazon Expands Buy With Prime
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