Top 5 Digital Transformation Trends At NRF 2019
Retail has entered the digital age. From artificial intelligence helping stores react to inventory levels in real time to augmented reality redefining the in-store shopping experience, technology was top of mind at the National Retail Federation’s annual conference. In this article from Forbes, learn about the five key digital transformation trends on display at NRF 2019.
On the heels of the planet’s biggest technology show in CES, comes “The Big Show,” otherwise known as NRF (National Retail Federation), which commences annually in NYC and is focused on what’s next for the retail industry.
Over the past year, Amazon received a lot of attention for the frictionless shopping technologies that it is already integrating into Amazon Go stores. The model systems have already been accepted as the standard for future retail experiences, and with Amazon’s acquisition of Whole Foods, there have been rumblings that the chain could eventually see itself go in that direction.
Amazon hasn’t gone without competition in that space, however. In 2018, Microsoft and Walmart made waves with a new partnership that leveraged Microsoft Azure and AI to help Walmart improve in-store experiences. SAP and Google Cloud have created a similar strategic partnership that other retailers could potentially leverage as well, signaling that the entire retail industry is likely looking at leveraging transformative and scalable new technologies to enhance and reinvent retail shopping experiences for their customers.
Last year, following NRF 2018, I shared seven key takeaways. How much has changed in the past year and what key technology and digital transformation trends are retailers focused on at this year’s NRF? Here are the six that I believe will make waves this year.
Analytics to AI
The AI-inside-everything trend hasn’t skipped a beat in the retail space. From using contextual data from chatbot conversations to create even smarter chatbots, to machine learning generated by sensors in the refrigerated goods section of your local grocer (to improve the just-in-time stocking of goods), the incorporation of smarter real-time analytics coupled with the power of AI is a huge topic at NRF this year. The limits for most retailers will come down to their ability to collect, process, analyze and act on the mass of data at their disposal. This is precisely why large cloud players like Google, Microsoft, IBM, and Amazon are all front and center at this year’s retail show. They are all there to help enable AI through their respective clouds.
For the third, fifth, tenth consecutive show, the IoT occupies a category all its own. On the one hand, sensors and the data that they create are critical to improving both the retail supply chain and shopper experiences. On the other, the IoT is also one of the key catalysts for making Analytics and AI solutions applicable to the real world. For instance, connecting RFID to Point of Sale (PoS) systems is a key catalyst for minimal-touch shopping experiences. The IoT is therefore critical for real customer experience innovation, as well as for incremental innovation (like, for example, incorporating AI into inventory systems). One of the hottest IoT announcements at this year’s NRF is the partnership between Kroger and Microsoft involving two pilot stores in Ohio and Washington. This partnership, touting a concept of RaaS (“Retail as a Service,” because why not?) uses an EDGE shelving system that combines the IoT and several previously mentioned technologies to redefine the shopping experience.
Augmented and Virtual Reality
Augmented reality (AR) and Virtual Reality (VR) have a bit of a love/hate relationship with the tech world these days: While some are sold on their infinite transformative potential, others note the inability of both technologies to drive mainstream adoption beyond a few niche areas like gaming and industrial applications. In my view, however, the retail space may offer some of the best opportunities for AR and VR to prove their worth and help become more mainstream. Customizing shoes, seeing what your hair will look like if you dyed it that wild shade or pink, or seeing how a sofa will look in your living room are the types of valuable and remarkable use cases that AR and VR can deliver. The opportunity to enhance customer experiences and create value without massive physical investments in spaces is definitely something that retailers and their customers can get excited about.
Omnichannel and Mobile
These are really two trends merged into one but bear with me. We have been talking about Omnichannel for years, but as a whole, retail and e-commerce experiences have still been somewhat disjointed. That was because many retailers large and small were forced to rely on third-party logistics and e-commerce companies to handle their digital experiences. Building a seamless end-to-end customer experience system under that kind of regime was too complex to pull off. Technologies and best practices are evolving fast, however, and I believe that 2019 will bring us significantly closer to the types of seamless omnichannel experiences that retailers like Starbucks and Capital One have been dying to deliver for their customers for nearly a decade. One item that caught my eye was this SAS Software video done on Omnichannel for this year’s NRF. I thought it did a nice job of explaining the challenges for omnichannel and how technology and analytics can enable retailers to finally execute an effective (and complete) omnichannel strategy.
What would a big tech show be without the mention of Blockchain? Snark and hype aside, Blockchain does have some really interesting uses (like farm-to-shelf product tracking). One idea that caught my eye was project NGAGE: a partnership between BLOCKv, CataBoom, and Intel to use Blockchain and gamified digital objects (think Pokemon Go) to improve retail experiences. I am still digging into the specific ways that Blockchain is enabling this technology, but if you want to check it out, here is more info and a video that I found helpful. It is intriguing enough to warrant attention.
If you compare these predictions with my takeaways from a year ago, the biggest change I notice is the trend towards a convergence of these technologies. With the sole exception of Blockchain, it is almost impossible to mention any of these technologies in isolation from the others now. I see this is an encouraging sign. After a challenging tidal wave of disruptive innovation these last few years, seeing these technologies not only converge but naturally begin to integrate well with each other means easier, smoother, simpler adoption and deployment for retailers. We will have to see if 2019 will be the year when we finally transition from talking about how technology can change retail to seeing real, bonafide examples of technology transforming retail happening in a store near you, but based on what I am seeing at NRF 2019, I am very hopeful that it will be.