By Nikki Baird, Managing Partner
1/22/2008
As I continually received email alerts at NRF from the Wall Street Journal about negative news on the economy and how we’re apparently sliding towards a recession, the inside of NRF reflected a very positive atmosphere – vendors had a full slate of appointments and were happy with the level of walk-up traffic. Further, retailers with technology shopping lists didn’t seem phased by the slew of negative indicators, most especially some big negative comparative store sales results from December.
I took this to mean one of two things: Either retailers are rushing to spend budget money before that money vaporizes among declining consumer spending, or we haven’t actually heard the whole story on holiday sales results. Evan Schumann offered a third alternative – that line of business executives have learned that cutting technology investments in a down economy is getting pretty close to cutting your own throat, and so have reaffirmed their investment plans for 2008.
Whether the economy is up or down, or even sideways, it seems that retailers’ fascination with customer centricity is here to stay. And if retailers are going to continue to evolve the customer experience, there are three areas of investment that seem to be a high priority for 2008 – and solutions targeted to these areas abounded on the NRF show floor.
- Cross-channel care. "Multi-channel" is in danger of becoming an overused term. I think the industry has evolved to the point where “multi-channel” is almost meaningless. About the only thing that multi-channel gets you nowadays is a financial headache when it comes to explaining sales results to Wall Street. The financial industry is still enamored with comparative store sales growth, but it seems that few retailers – and few financial analysts – have taken the time to temper store sales against the growth and the synergy available from other channels. What does a -5% comp store sales result mean against a 20% growth in online results? And how do gift cards shift around consumer spending? Even though it does create financial headaches, delivering a seamless cross-channel experience designed around how consumers shop (from search through use) is top of mind for both retailers and solution providers.
- Interactivity. Even as in-store media and advertising made their debut at NRF, such passive forms of interaction with consumers seem to be taking a secondary place within a large range of consumer interactions – most of which involve getting some kind of feedback or response from consumers. Whether it is something as passively measured as dwell time through digital video surveillance, to sophisticated interactive kiosk/digital signage combos that can summon employees when more assistance is needed than the kiosk can supply, the future of customer service resides in interactivity. It’s important not only because it provides the opportunity to get more personalized in how a retailer interacts with a customer, but also because it enables retailers to measure the effectiveness of that interaction – something sorely missing from purely passive forms of communication.
- Mobility. Not limited to consumer devices (though that was also on display in spades) mobility will play a role in freeing up store employees, in giving consumers more control over how they let retailers interact with them, and in providing a bridge between the physical world and the online world. Actually, some of the more interesting mobile solutions I saw were not at NRF, but were on display at the Consumer Electronics Show, where, for example, near-field communication was used as a short cut to enable a Bluetooth connection between a consumer’s cell phone and an in-store device – an interaction that could download coupons, recipes, or media files, or upload pictures or wishlists to in-store printers, to name but a few of the use-cases.
If the solutions on display at NRF – and retailers’ reception to these solutions – are any indicator, 2008 will see a big push into the digital lives of consumers. Technology in employees’ hands and in stores will increasingly reach out and connect with the technology in consumers’ hands (and, through more seamless cross-channel experiences, in their homes too).
As more negative December comp store sales roll in, the real challenge will be in explaining how these investments translate into results. If the industry has a hard enough time explaining the relationship between comp store sales, online, and gift cards, imagine the challenge in explaining the inter-relationships between employee and consumer devices, online and in-store media and advertising, and how ultimately these all drive sales for retailers, regardless of the channel. Looks like interesting times remain on the horizon.
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