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NRF Big Show Report: The big ‘c’ and retail economics ahead

Standing still, and not understanding the value of data, could prove to be the demise of many a retailer, big and small, despite encouraging economic expectations for retail in 2019.

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January 15, 2019

If one were to sum up this week's National Retail Federation ‘Big Show,' in one letter it would be a capital ‘C' as in customer, customer-centric and connecting with the customer.

If one had to chose one word to describe the big buzz of the annual event, which reportedly drew an estimated 37,000 attendees to the Javits Center in New York City, it would be data.

That's because in session after session — which featured both behemoth retailers like Walgreens, Walmart, Kohl's, Kroger and Target as well as smaller but bustling brands including Lush, Chico's FAS, and Rocksbox —the message was short and simple: If retailers, restaurants and brands are not collecting the data for understanding and knowing their customer they are very likely to stumble in what is clearly a thriving industry time period.

Consider just one encouraging statistic: a 3 percent consumer spend growth in 2018. Then consider that the retail segment overall enjoyed 5 percent sales growth. Those two numbers were noted by Janet Yellen, who resigned in Jan. 2018 from the Federal Reserve Board of Governors, during a presentation that also featured Recode co-founder Kara Swisher.

And while the current government shutdown, the longest in the country's history, is becoming a bigger worry every day given 800,000 workers aren't getting paid, this year should still be a boon for retail, noted Yellen.

"Things are in good shape and fundamentals look excellent," said Yellen, acknowledging there will likely be a slowdown and "tightening" of financial conditions. "But consumer spend is predicted to grow on a solid rate."

Yet to take advantage of that expectation retailers that aren't moving fast to be faster and more agile and very, very customer-centric likely won't benefit, said Swisher.

"You need to completely understand the consumer and have a data relationship with the consumer because if you don't you will have trouble surviving," said Swisher.

And in regard to competitors, retailers that stand still will end up in the same predicament.

"If you don't react to what they're doing [retailers moving fast with data knowledge, agile pricing strategies, enhanced delivery options for shoppers] you are going to be in a lot of trouble," said Swisher.

And with a standing-room-only audience of retailers, she added, "if you don't think Uber is about retail you're not paying attention."

Survival, said Swisher, is tied to providing an experiential experience, offering product no one else has and solid customer services.She went on record once again declaring today's physical stores will go extinct, and stressed that data from customer activity is crucial to success. She predicts the next wave of retail will be a "different kind of store" which is event-driven and caters to specific consumers.

Stay tuned as Retail Customer Experience reports on NRF sessions and presentations.