NRF is the flagship event where some 40,000+ retail leaders and industry partners meet annually to gain a pulse on the industry and learn from peers and providers.
Here are a few thoughts and key takeaways from the event, as so much accelerated change is occurring across the industry, with technology leading the way for growth and new profit levers in 2024 and beyond.
The big takeaway: Generative AI has moved beyond buzz
Each year, a broad range of topics are covered—some are evergreen (e.g., omnichannel), and others burst onto the scene (e.g., drones) seemingly overnight. Many that are popular one year fade into the background or disappear altogether in future years (e.g., metaverse).
Among the broad range of topics, an underlying theme always emerges, informed by what’s hot in retail, and this year, as one could imagine, Generative AI was the focus, with one-quarter of all the sessions (185) focusing on this significant theme alone! Given the attention paid to Gen AI over the past year and the investments being made, this conference’s focus comes as no big surprise. But, unlike some emerging technologies, it’s not just buzz – brands and organizations of all types are launching use cases, pilots, and broader initiatives to generate value creation through Gen AI.
The general tone from speakers regarding Generative AI was hopeful yet pragmatic, with stories about a broad canvas of use cases and experimentation such as supply chain, customer experience (e.g., retention, loyalty, personalization), employee experience, organized crime and fraud detection/prevention, and decision support.
For most organizations today, it’s about leveraging Gen AI to help better power the core business of retail, with more speculative experiences still in very early stages.
What’s clear is that we have quickly moved beyond the hype train, as Gen AI almost overnight became a major force in enabling the future of retail. While most retailers are in the early stages of experimentation and adoption, its permeation is moving very fast, buoyed by early successes and a broad range of potential use cases. Gen AI is quickly becoming a Swiss Army knife in the hands of the bold and ambitious, with early wins focused on using natural language and computer vision to realize savings, drive revenues, and enable scale.
Throughout the event, an impressive group of innovators and business leaders took the stage to share their visions and experiences. Several in particular left me with some post-event thoughts that I want to share with you through a few summarized messages below. These learnings nicely encapsulate the space we operate in and the profound shift that’s upon us.
- You shouldn’t aim to have a Gen AI strategy; instead, your strategy should be focused on growing your business with Gen AI as one of the many tools in your toolbox.
- The key to a Gen AI agenda, given the nascent nature of investments, is to get exec buy-in, be relentlessly focused on delivering business value, ensure a solid data foundation, start with the right use cases, build trust with users, and regularly communicate quantified progress.
- You will likely find value from Gen AI initially through “micro-efficiencies” – areas where you can realize 5-7 seconds of savings over thousands of people/transactions, resulting in savings of millions of dollars.
- Data collection is foundational. With every customer experience, you’re only generating half the potential value if you’re not also thinking about what data you’re collecting through that experience or interaction, irrespective of whether you have immediate line of sight to how you’ll use that data.
- Gen AI is equipping a new generation of employee self-service and enablement. For example, allowing an employee to ask a question of a bot (e.g., What’s my inventory turn? What is the best product for a particular customer need? What are my medical benefits?)
Omni-channel: Moving beyond the channel to optimal consumer experiences
The topic of omni-channel came in second to Gen AI in popularity. It has been a leading topic of focus at the NRF Big Show every year in recent history. However, the thrust of it has shifted over time from choosing e-commerce platforms to growing the e-commerce channel to optimizing inter-channel connections such as buy online pick-up in-store (BOPIS).
This year, the focus was on meeting the customer where they are by providing ubiquitous channels to enable a blended, engaging, and efficient consumer experience – tying together every imaginable customer commerce touch point (e.g., bricks and mortar stores, websites, mobile, live stream, pop-ups, delivery services, marketplaces, fully automated walk-out stores, etc.) – with emphasis on optimizing the physical store.
The shift in focus for omnichannel is a powerful evolution in retail as the channel of engagement becomes increasingly unimportant as retailers focus on optimizing their capabilities across every touch point – with a holistic, end-to-end customer experience taking center stage.
Expect a big year for tech in retail!
With the 2024 NRF Big Show behind us, it will undoubtedly be a huge year for the retail space. With the ever-changing consumer landscape and hopeful economic growth, technology investments driving innovation and operational efficiencies will flourish in 2024. Leaders are poised to leapfrog their competitors – look for these themes to take on a bigger life and move quickly from the world of use cases to scaled programs and major value-driving initiatives in the months ahead.
Many retailers are intentionally fast followers or laggards, purposely aiming to learn from the successes and failures of their competitors before investing their limited budgets. If you’re a retailer or brand in that camp, I encourage you to make an exception for Gen AI as it has all the hallmarks of an evergreen tool, with broad application and endless use cases that will create an ever-widening gap between leaders and laggards.
It’s an exciting time. If you’re looking for perspectives on where to play or how to plan your investments, please reach out to us at Cuesta. Our team is on the front lines of some of the most innovative work in the space, and we would be delighted to share our views and experiences with you.