Retail tech propels stores past the pandemic
At NRF Converge, speakers discuss technologies to propel recovery from the recession of 2020, and how social media becomes a minefield for companies that don't have a strategy.
After 2020's pandemic and recession, retailers are reopening to a different world, where e-commerce is a top priority, data is more valuable than ever and those who ignore social media do so at their own peril.
The changes in shopping behavior have led retailers to build up their customer experience tech stacks with customer data platforms (CDPs), data management systems and more sophisticated digital commerce. Also, 2020 was a year of social awareness, protest and change. Brands keep up with social issues their customers care about -- and take their own social stances -- using social media tools.
That was the upshot of retailers and industry experts at the opening day of National Retail Federation's week-long NRF Converge virtual conference, originally planned as an in-person event.
Frontline retail workers became essential workers during the pandemic, which recast them as more important than ever to many employers. Walmart U.S., which generated more than $370 billion in sales last year across 4,700 stores and Walmart.com, took cues early in the pandemic from the company's European and Asian stores and provided masks to employees as personal protection, said John Furner, Walmart U.S. President and CEO, who also is NRF's board vice chair.
As Walmart grasped new concepts such as "social distancing" early on in the pandemic, its corporate teams operationalized protective measures at massive scale to keep stores open -- such as sourcing and shipping 80,000 plexiglass shields for its checkout aisles and other store departments.
Online commerce expanded rapidly for Walmart, as it did across the board in retail. While things are still "settling down" to what will eventually be a post-pandemic world, Furner believes that, when it does, consumers won't revert to pre-pandemic buying patterns.
That means retailers must accommodate customers who order online and want their orders shipped to their homes, groceries delivered to their homes from a local store, or picked up at a store. E-commerce and the supply-chain operations behind it have become a linchpin of customer experience.
"We probably skipped four years of change, transformation, evolution, growth -- whatever you'd like to call it -- in the e-commerce space," Furner said. "Just this year, we're up 37%, on top of 77% last year -- well over double the business in two years."
The decline in foot traffic drove some 38 retail chains into bankruptcy in 2020, including Neiman Marcus, J. Crew and Pier 1, but e-commerce was a savior for those that survived, said Lee Peterson, EVP at WD Partners, a retail architectural and operations consultancy.
Online sales will continue to drive growth for companies that focus on those technologies to reorganize their operations around what their customers want, he added. More than half of the respondents to a WD Partners survey of 2,500 U.S. consumers said they will continue purchasing online for home delivery and buy online, pick up in store (BOPIS).
"Americans are shopping, and they shopped pretty consistently all the way through [the pandemic]," Peterson said. "But the way they shopped has changed forever."
In his keynote, Mike George, NRF chair and CEO of television shopping conglomerate Qurate Retail, Inc. noted that through the perilous pandemic economy, retail sales actually grew by 7% overall.
Coming out of the pandemic, NRF projects that retail revenues will grow 10.5% to 13.5% this year and will total $4.4 trillion. Federal economic stimulus and the rapid rollout of vaccines will spur that growth. If the projection holds true, it would represent the fastest U.S. economic growth in more than three decades.
Data changes retail
Customer data is the key to driving good customer experiences, said Chris Sanders, head of data for 1-800-Contacts, a mail-order company whose contact-lens delivery business thrived as in-person visits to eye care practitioners dwindled during 2020. But the challenge for his company wasn't acquiring customer data -- it had more than it needed -- but building a tech stack with tools that can drive the right insights to further personalize individual customer experiences.
"We are at a point where we have so much data coming in that we need a way to bring it together and make as much sense of it as we can to optimize the customer experience and provide the right journey," Sanders said.
To accomplish real-time access to data and derive insights from it, 1-800-Contacts migrated data from its several data centers into the AWS cloud, and is in the process of installing Databricks data management services to build a lakehouse, a cloud repository with enterprise-grade security, integration, access control and time travel data versioning.
Asian Paints, the largest paint company in India and the third largest in Asia overall, implemented a Treasure Data customer data platform in 2020 to create a more immersive customer experience and to expand its foothold in the general home-decor market. The company needed a CDP, said general manager of IT Deepak Bhosale, because it needed to get a better handle on where its customers were on their journeys -- and they were starting them through any of a number of channels, including retail stores, customer service, social media, mobile apps or from marketing emails.
"We need to inspire customers to dream with personalized designs," Bhosale said. "[Then] we need to keep nudging them with contextual insights to make the right decisions."
Most importantly, he added, the CDP helps keeps the experience consistent, without breaks as its customers move between the physical stores and the digital experience. Customers would, for example, create a design online but when it came time to shop, the store couldn't access the designs. Such "journey breaks," as Bhosale called them, lead to poor experiences, low Net Promoter Scores and ultimately the loss of customers.
In worst-case scenarios, he added, disconnected customer data can cause privacy problems when customers' identities are managed poorly. CDPs can fix a lot of these issues by managing a single customer golden record to tie together records across marketing, sales, e-commerce and customer service applications.
Sports hat and apparel retailer Lids so far has launched Microsoft Cloud for Retail MPaaS in 100 of its 1,131 stores, doing away with the "cash wrap," or cash-register station. Customers check out directly with employees who carry mobile devices that can access their data where they stand. Lids CEO and chairman Tom Ripley said the MPaaS experiment has opened up room in its stores, which tend to be small.
"If you put a cash wrap in a store, what happens is they'll use the space and it becomes this monolith where stuff gets stored," Ripley said. "What we've found since we went to the mobile platform is that it creates a much more engaging customer [experience], but the truth is, a lot of the stuff that you thought you needed in the store we don't need anymore. The binders, the manuals, can go in a non-retail-selling space -- the back room, for example -- and frankly it's a better place for it."
Social media monitoring, engagement heightens
In the wake of both civil activism and civil unrest last year after police shootings of Black Americans, social media has become a place where retailers can get information about what's happening near their store locations and a platform to take stands for social justice alongside their customers.
Ryan LongDirector of global intelligence, McDonald's Corp.
In fact, inaction on social media sites -- especially Twitter -- amid political events carries downsides, said Ryan Long, director of global intelligence for fast-food retailer McDonald's Corp. Customers are very aware of the social stances of brands, whether it's about social justice, climate change, socioeconomic inequalities or issues related to the pandemic.
"There's this growing expectation that companies say things or take stances on these issues," Long said. "Taking a stance -- or not taking a stance, where silence can be absolutely deafening -- can pose a risk to reputation and escalate to protest activity as well."
Social media sites can also offer early warnings for violence in a particular area, Long said. Protests, military battles, violence against civilians, riots and explosions are on the rise globally, he added, with almost 140,000 such events having taken place so far this year, according to the Armed Conflict Location and Event Data Project. That's up from 2020, which was an eventful year in that regard with 10,330 Black Lives Matter protests logged in the United States as well as 2,350 right-wing demonstrations and 3,990 demonstrations related to the pandemic.
Valerie Jarrett, former senior advisor to President Barack Obama, keynoted NRF Converge and discussed the similarities and differences between 2009 and 2021 -- both times when incoming Democrat presidents dealt with devastating recessions.
While there are many parallels between the two epochs of recent U.S. history, some things are different: Young people are more politically aware now, she said, not only shopping with brands that reflect their own values of diversity and inclusion, but also working for companies that reflect them, too.
Social media, Jarrett continued, has evolved much since 2009. While it's great that social media democratizes information, the big downside is that there are no filters to separate what's accurate from what isn't. In 2009, social media was just getting started, and it didn't carry the influence it does today.
"When President Obama took office, I didn't even know what Twitter was," Jarrett said. "He asked me early on, and I said, 'I don't know, like "all atwitter" or something?' and he said, 'You're not helpful.'"