2020 NRF recap: The continuing evolution of retail

February 14, 2020 Mark Vomend 5 min
NRF 2020 marked a shift from specific types of transactions to a broader focus on removing friction for customers and store associates alike.

Every January, the National Retail Federation (NRF) holds its Big Show at the Jacob Javits Center in New York. It’s 4 days’ worth of collaboration and idea sharing for retailers, industry thought leaders and technology vendors alike.

How Product Development is Evolving


NRF 2020 had an estimated 40,000 attendees and 800 vendors spread over 1.8 million square feet of exposition space. I spent the 4 days of the show meeting with customers, prospects, our business partners and industry analysts.

I came away with several observations around retailer priorities and some thoughts on 2 underlying technologies that received a significant amount of focus this year both at the show and in post-show recaps.

Retailer priorities

Based on my conversations with our customers—as well as listening to retailers present in some of the conference sessions—3 themes jump out:

A focus on convenience

Last year, a significant amount of time at NRF was dedicated to the technology required to enable the concept of unified commerce. Unified commerce is the broad term that covers buy online pick up in store, ship from store to home, curbside pickup and other variants of how retail customers order and receive products. Technologies that deliver this experience include point of sale (POS) systems and order management systems (OMSs). NRF 2020 marked a shift from specific types of transactions to a broader focus on removing friction not only for customers but for store associates as well.

Brick and mortar is not dead, the role of the store is just evolving

Digital advertising is becoming very expensive, and the cost of digital customer acquisition through tactics like email, banner ads, paid search and affiliates is increasing every day. Conversely, the online channel is becoming better at taking orders and facilitating delivery of products to customers, whether through delivery to the home or by allowing the customer to pick up their order at a store—or at an alternative site like a locker. In the past, retailers looked to online digital tactics as a customer acquisition tool and the store as an order-taking and fulfillment channel. As the cost of digital advertising has increased and e-commerce order-taking has improved, retailers are now looking at their stores as a customer acquisition tool and online channels as an order-taking vehicle. Said differently, store rent is now the cost of customer acquisition rather than Google Ad spend. As a result, retailers are now looking at their stores as destinations that combine product, entertainment, food and experiences.

Examples of this approach include:

  • Showfields, advertised as the “most interesting store in the world,” is a space in the Bowery of NYC. Showfields is a set of curated direct-to-consumer brands mixed with art installations, food and community programming.
  • Soon to open in Las Vegas, AREA15 is an experiential retail and entertainment complex offering anchor retail tenants mixed with live events, art installations and curated experiential retail.
  • Lululemon’s 25,000 square-foot experiential store in Chicago, which includes yoga studios, meditation space, health food and community space.
  • And finally, Nordstrom, which over the past year has doubled its food-service operations, including full bars with seasonal hand-crafted cocktails.

Innovation must be a core competency

One theme that came out loud and clear during NRF was that retailers must be comfortable with constant change and be capable of continuous innovation. A speaker from Crate and Barrel stated, “We’ve been around for the last 58 years. We have no right to expect that we will be around for the next 58 unless we continually innovate.” Several technology vendors highlighted their ability to work in an agile framework and support a DevOps operating model. This sounds a lot like the Windstream Enterprise transformation over the past year. It’s worth noting that our retail customers and prospects are embarking on the same organizational journey WE is. One quote that stuck in my mind was from Satya Nadella, the CEO of Microsoft: “When I think about innovation, the word that I think about is empathy.”

Underlying technologies

The influence of the digital video camera

2020 could be the year that the digital video camera influences the customer experience in retail. Video cameras in retail are no longer just closed-circuit TV cameras focused on loss prevention and security. Digital video cameras, combined with AI, visual recognition and machine learning, allow retailers to enhance customer and associate experiences as well as reduce costs through applications in:

  • Payment processing
  • Sales associate performance
  • Customer sentiment
  • Store traffic and customer segment analysis
  • E-commerce product search and ordering
  • And of course, loss prevention
  • Inventory and shelf stock management, including autonomous robots that roam the store after hours

We have a data lake, but why?

Mr. Nadella, the Microsoft CEO, suggested that 40 TB of data is created every hour. I spoke with several brands about this and all agreed that they want more data, but when asked how they would use this data, they didn’t have a lot of specific plans. Maybe a better way to think about this as a retailer is by asking, what part of our customer experience is valued most by our customers? Once we answer this question, then we can ask ourselves what data we need to deliver it.

The role of the solution provider

Retailers’ focus on convenience, the changing role of the store and the constant march of innovation—along with the emergence of digital video camera technology and the reliance on predictive data analytics—all require reliable, secure network connections that can handle a large amount of data over many locations.

In fact, the biggest change regarding the choice a retailer has for connectivity is the role that solution providers play.

In-store networks and connectivity that once had to support just an alarm POTS line and polling of POS data overnight over a single telephone line must now enable a connected customer with WiFi access, VoIP, real-time cloud-based POS and CRM systems, plus smart mirrors and digital signage to deliver a better customer experience and help retailers optimize operations—all while being highly secure following a stringent set of PCI requirements.

This means that retailers expect their connectivity partners to not only provide an IP address, but deliver the reliable and secure technology foundation they need to deliver a superior customer experience in store and online.

Key Takeaway
The theme that came out loud and clear was that retailers must be comfortable with constant change and capable of continuous innovation.

How Product Development is Evolving to Meet Customer Needs