Against a backdrop of Gottschalks joining the ranks of retailers to file Chapter 11 and Circuit City in the process of auctioning off its assets, the NRF Big Show definitely had more of a sober tone this year. While Gottschalks filing was not a huge surprise to many in the industry, the struggles of the chain of 58 department stores and 3 apparel stores reflected the harsh reality that in the current economic crunch retailers are quickly falling into categories of has-beens, survivors, or thrivers.
While retailers may have cut back and sent fewer team members to this year’s NRF event, those retailers in attendance were active buyers in pursuit of solutions that could help them emerge as a company that survives and even thrive once the economy rebounds. In order to stem the current tide, most retailers in attendance were focusing on the following 5 key areas:
- Efficiency/Cost Savings
The ROI that tier 1 retailers like Home Depot and Sears have realized from task management and workforce optimization has been well documented, but now more mid sized chains are realizing the value in optimizing their workforce. For example, at NRF this week Books-A-Million, the third largest book retailer in the U.S., announced plans to implement the entire Reflexis Store Operations suite of integrated KPI, labor scheduling, task management, and storewalk/compliance solutions.
“In this challenging retail environment, it is critical to maximize the efficiency of the store level workforce,” said Dennis Lyons, Executive VP of Store Operations for Books-A-Million. “Reducing store salaries in response to tough sales can have negative ramifications if done incorrectly. In order to benefit our shareholders, customers, and associates, it is important to understand the specific labor needs of every store. The workload given to stores must be managed upstream in the home office so that key tasks are accomplished and the right amount of time is allocated and scheduled for sales and customer interaction.”
In addition, Canadian’s largest food distributor Loblaw Companies announced plans to utilize RedPrairie’s Workforce Management applications to manage over 120,000 associates in its stores across Canada
- Analytics/Business Intelligence
Considering the rapid change in demand cycles, many retailers are leaning more on the dashboards, real-time alerts and other insights business intelligence and analytics solutions provide. One of the most telling examples spotlighted at NRF was Family Dollar’s Project Accelerate. The Fortune 500 retailers with more than 6,600 stores and $6.8 billion in annual revenues is in the midst of a three-year transformation designed to improve the shopping experience and also improve inventory productivity and enhance supply chain efficiency.
Family Dollar’s executive team has identified its use of SAS merchandise planning applications and business analytics as a key component of Project Accelerate. “SAS enables the Family Dollar merchandising organization to quickly create integrated merchandise financial plans we can share and adjust collaboratively on an almost real-time basis,” said Scott Zucker, Vice President of Merchandise Operations for Family Dollar. “With the current economy, it is important for us to make inventory adjustments quickly to minimize ‘discretionary’ risk and maximize ‘basic needs’ opportunities. During 2008, the SAS Merchandise Financial Planning solution enabled us to adjust our merchandise assortments much more quickly than in the past. This allowed us to make immediate investments in the consumable categories that our customers need most during these difficult times. Our strong fourth quarter results from June to August in 2008 reflect this mix shift away from more discretionary merchandise.”
- Customer Centricity
Every retailer claims to be customer centric, but in the current economic climate many retailers are actually putting their money and focus behind those claims. As a clear indication, a Sunday conference session entitled “Are You Truly a Customer-Centric Retailer?” drew approximately 800 attendees. Presented by DemandTec, the session introduced new research from IDC on the state of customer-centricity and insights from Best Buy and Canadian drug chain Rexall PharmaPlus.
Leslie Hand, Research Director for IDC Global Retail Insights, previewed the results of a recent survey to be published later this month. The results highlighted suggest customer-centricity is a retail initiative that has firmly taken hold, especially among the industry’s higher performers. “We were impressed with the fact that customer centricity is one of the top three focuses of most retailers and that customer insights are being deployed extensively by both marketing and merchandising,” said Ms. Hand.
Denise Darragh, VP of Marketing & Advertising at Rexall PharmaPlus, a 350-store drug chain in Canada, described how the 350 store chain has used customer segmentation to better target and promote to specific shoppers. Dan Moe, VP of Merchandising Operations and pricing for Best Buy, presented a summary of how Best Buy’s well-publicized customer centricity program has changed how the company approaches merchandising, pricing, and advertising.
- Connected Channels
Retailers looking to connect disparate sales channels had several live demos on the show floor of providing the ability to allow consumers to buy from any channel, and easily have that purchase fulfilled from the distribution channel of their choice. For example, Manhattan Associates showcased the integration of its Distributed Order Management (DOM) solution with WebSphere Commerce from IBM. Building a demo around their joint client David’s Bridal, Manhattan and IBM demonstrated the ability for buying products online with pickup in stores, by allowing visitors to the IBM booth to order gifts such as digital photo frames from an IBM gift registry and then have that order picked up at the Manhattan Associates booth.
“Solutions like Manhattan’s DOM are the future for cross-channel order management, especially given the certified integration with a leading eCommerce solution like WebSphere Commerce,” said John Morrow, CIO for David’s Bridal. “This technology allows us to have complete order and inventory visibility along with better communication with our customers in every selling channel. As you’d expect, having absolute certainty over ability to deliver by our customers’ wedding day is core to the David’s Bridal culture, and Manhattan DOM gives us the tools we need to make this happen.”
In another powerhouse teaming around cross-channel commerce, Accenture and Microsoft announced an initiative at NRF to help retailers tackle the challenge of linking consumers to emerging technology platforms such as social networking and online communities.
Under the multi-channel retail initiative, Accenture and Microsoft will work with Avanade — a global IT consultancy created by Accenture and Microsoft – to help retailers extend the shopping experience to an ever-widening number of locations and devices, including the Web, mobile computing, and even new ways to shop in stores.
- The Arrival Of Mobile Commerce
The NRF Show also featured one of the first live demos of the new Microsoft Tag short code technology. Built around a prototype retailer called Martin Blue, Escalate Retail promoted an offering for a free pair of iPod travel speakers. Retailers were invited to “snap” the tags featured in ads and post cards with their web-enabled phone and “order” the free speaker as a reward for taking part in the demo. After snapping the tag to place their order, retailers were able to stop by the Escalate booth to pick up their order and learn more about the mechanics of how the behind-the-scenes tools used to deliver the live “Buy Anywhere, Fulfill Anywhere” example.
Despite huge growth in Japan, quick response codes are still in their infancy in the U.S. The debut of Microsoft’s Tag technology could change that quickly.
There were also demonstrations of mobile payment solutions showcase at the NRF Big Show, with exhibitor Vivotech showcasing its Near Field Communication (NFC) software which enables mobile payments. The company also announced plans for a trial with Sheetz and Wright Express, which will enable drivers to make fuel purchases by merely tapping their phones at contactless payment readers.
In collaboration with Sheetz and Wright Express, ViVOtech will provide the complete end-to-end NFC mobile solution including a mobile wallet, Over-The-Air (OTA) fleet card provisioning infrastructure software, promotion management software, and contactless/NFC terminals installed at Sheetz locations. The trial will include more than 350 participating Sheetz locations throughout Pennsylvania, Virginia, Maryland, West Virginia, Ohio and North Carolina.