The Need For Solid Multi-platform Experiences Took Center Stage at NRF Expo

by Pradeep T Moudgal 0

Editor’s note: This is the firstof two Perspectives about the NRF Expo. PaymentsJournal will runthe second one tomorrow.

NRF 103rd Convention and Expo-the retail industry’s big show withover 520 exhibitors spread over 190,000 square feet at the JavitsConvention Center in New York City on January 12-15-was attended byrepresentatives from North America, Europe, Asia-Pacific, LatinAmerica, and Africa. The show represents retailers, paymentsprocessors, technology solution providers, financial institutions,and other key providers who continue to drive change in theretailing experience in-store and digitally.

The first day’s theme was the technologically challenging exerciseof developing omnichannel retail product and strategy to create aunique, feel good shopping experience forconsumers with respect to marketing, loyalty, productinformation/reviews and payments. All of the retailers stressedthat the multiplatform experience has to be solidto protect a company’s brand and generate goodwill.

A company’s digital strategy eventually has to match what ishappening in-store from the time the customer enters up tocheckout. A solid mobile checkout strategy is ofparamount importance, and key areas of product development for manyretailers in 2014 and 2015 will be apps ranging from basic productinformation to digital wallets.

In light of the recent data breach at Target, continued focus ondata privacy and security will be a top priorityfor many retailers in 2014. Another is new technology solutions tocreate more personalized shoppingexperiences.

Developing systems with one view of the product, one view of thecustomer, a robust point of sale, online and in-store datamanagement that supports better marketsegmentation and developing targeted marketing strategiesthrough one data base were also key themes of the conference. Thechannels are being linked and integrated to createsophisticated inventory management solutions for theseretailers. More personalized customer relationshipmanagement (CRM) can be attained by combining theretailer’s own database is with information from other databases.The key is to create relevant technology solutions forcustomers.

Retailers also talked about how they are leveraging technology inthe stores and digitally that allows shoppers to scan productreviews instantly and get access to user-generated reviews, andgenerating yottabytes of data, which results in a richerunderstanding of their customers to improve marketing and retentionstrategies.

The conference began with a keynote address by Rick J. Caruso,founder & CEO of Caruso Affiliated, the largest privately heldreal estate development companies in the United States, titledReimagining Main Street – How Brick and Mortar Retail WillThrive in the 21st Century followed by a panel. Carusosaid that to thrive in today’s marketplace, retailers need topromote the human experience of shopping while alsodeveloping digital strategies. Panelist Blake Nordstrom,CEO of Nordstrom, Inc., agreed with Caruso’s assessment inprinciple but pointed out that building the true omnichannelexperience is capital intensive and neither a simple nor easy tasktechnologically. Caruso said the traditional large mall will soonbe dead though shoppers today still want to engage and feel a senseof community and have come to expect greater and more personalizedservice from their retailers. He argued that digital technologydoes not mean the death for brick and mortar but face-to-faceinteractions with brands, the social aspect of shopping, and thephysical presence of retail goods will continue to fill basic humanneeds and drive consumers to brick-and-mortar establishments. Asevidence he cited a recent study that 40% of Americans haveexpressed loneliness and crave more human interaction while at thesame time conducting a great deal of business digitally.

The bottom line is that people’s desire for interaction and asense of community will never disappear despite all thesophisticated technology solutions at their disposal.Social media is crucial to the success of theretailer be it large or small, allowing engagement withcustomers on multiple fronts and learning about them viasophisticated data management and analytical tools. The panelpraised Starbucks for promoting the human experience while usingsophisticated digital technology (from payments to loyalty) toconstantly delight its customers. Blake Nordstrom mentioned thathis store has about 4.5 million Pinterest followers.

The Role of Payments, Marketing and Technology in theSuccess of the Digital Economy: In a second panel,representatives from MasterCard, Saks Fifth Avenue, Bass Pro Shops,and Walgreens talked about the seamless shopping experience,providing clients information on product inventory, focus on deeppersonalization as a marketing strategy, mobile services, and thebenefits of social media interactions. They discussed an openapproach to mobile app development. Walgreens discussed its APIstied to apps varying from photo apps to health care to payment appsdesigned to connect with and retain customers. They spoke of seeinga 40-50% increase in spend due to loyalty schemes.Providing information on in-store sales/promotions to their bestcustomers has become very important part of loyalty. Freeshipping is now very common. The retailers represented bythe panel are also working with their card providers such asMasterCard to gain greater insights into consumer spend to supportmore targeted marketing offers, which help in retention.Cobranded cards are also valuable to retain the bestcustomers, whether they are prepaid or credit. Saks FifthAvenue said its cobrand card has been a big success, allowinggreater engagement with customers and significantly increasingsales as a result. Walgreen’s Balance Rewards loyalty product has90 million clients, of which 74 million are active on the program.All three retailers said they are working with MasterCard tofurther dissect payment information to differentiate theiradvertising and develop targeted marketing strategies. Walgreens isexpanding its loyalty product to fulfill customers’ unmetfinancial needs for bill payment, money transfer services,etc. Bass Pro Shops discussed how PayPal has brought newclients to its stores and said it is experimenting with MasterCardPayPass as well. The retailers all said that they will adapt toEMV although they were skeptical that thedeadlines would be met for full conversion due to the costs andcomplexity of implementation.

Global Retail Innovation Trends was the topic ofa session in which speakers who are spearheading product innovationat firms based in Barcelona, Berlin, and New Delhi presented, asdid speakers from Italian, French, and U.S. firms. Some interestingcompanies such as Quirky, Kase, Coop, and Warby Parker werehighlighted. Innovation was characterized as reallybreakthrough reinvention and presenters warnedthat companies have to be responsive to change to survivein the 21st century or risk being quickly disintermediated by thecompetition.