By Bill Szlaius
Co-Founder, Chief Executive Officer,
and Acting Chief Strategy Officer
Every January, I am blown away by the creativity and resilience of the retailers who come to share their stories at the annual National Retail Federation Conference and Expo (NRF) in New York City, and 2024 is no different. Once again retail leaders have exceeded my expectations in the ways they have turned disruption into opportunity.
The Logic team met with dozens of retailers. We spent hours on the show floor and in conference sessions. If I sum up our experience in just a few words, here is what I would say. Once-futuristic technologies, from AI to RFID, are becoming accessible on a much larger scale, and retailers are doubling down on the reinvention of consumer experiences and the retail practices that support them.
With that in mind, here are just some of the most exciting trends we spotted in the keynotes, sessions, and conversations with retail leaders.
1. Cool, cutting-edge tech going wide, from smart carts to micro-fulfillment.
Given the buzz they are generating at this year’s NRF, it looks like retail technologies that seemed futuristic just a few years ago are starting to go mainstream.
For example, micro-fulfillment centers have been around for a few years, helping vendors optimally store and rapidly fulfill the most popular items in a localized geographic area to eliminate wasted storage space and overstocking. Now, retailers are talking about modular, robotic micro-fulfillment systems, which are designed for a quick roll-out and rapid scale-up of micro-fulfillment centers in and near population centers. These new systems maximize space utilization, offering even more cost-effective fulfillment and shipping.
Retailers were also excited about the potential of RFID technology to support supply chain visibility. And more and more retailers are actively rolling out a combination of video, RFID, and image recognition to optimize planning, shelf-level availability, and compliance. With advances in RFID capability that allow it to be switched on and off, retailers are also looking to RFID as a solution for loss prevention and return abuse.
We’re always looking for new ways to advise clients around frictionless checkout—so we were also impressed by the smart cart technologies on display. Described by Forbes as the latest killer app for supermarkets, smart carts—carts that weigh and scan items, allowing shoppers to completely bypass checkout lines—are definitely coming into their own, with multiple vendors demonstrating their latest models at NRF.
2. AI may be “everything everywhere all at once”—but you need to pick your battles.
It’s no surprise, but AI wins the prize for hottest trend at NRF 2024. Literally everyone was talking about it, and we have only listed it second because its popularity would surprise no one. However, the AI conversation has definitely moved from jaw-dropping excitement about all the possibilities to a more disciplined, business-first approach.
NRF presenters and attendees spent time at the show speaking and thinking about what is doable with AI and defining what is feasible, not just what is possible. Seemantini Godbole, Executive Vice President, Chief Digital and Information Officer at Lowe’s, warned against trying to pursue too many use cases and instead recommended focusing on a handful that really deliver value. A great POC may not always deliver value when scaled out to thousands of associates or millions of customers, she warned.
Defining scope was also a core takeaway for the overflow crowd who showed up for the “Reinventing Retail for the AI generation” session, which featured Anshu Bhardwa, SVP & COO, Walmart Global Technology and Walmart Commerce Technologies. Here are a few of her recommendations:
- Prioritize customers and associates. “Start with the needs of customers and associates and try to solve their biggest pain point.”
- Put security first. “Be sure that you have a very small blast radius. You don’t want to be experimenting with customer data, with trust, or with security without knowing the implication.”
- Pick your battles—and the right AI partners. “You can’t build everything. So figure out who is the right partner for that right area. “There’s no one size fits all. You can’t have one partner helping you on everything.”
3. The stars are aligning for adaptive retailing.
Given the increasing maturity and accessibility of technologies like AI and RFID as well as retailers’ years-long investments in getting their data ready for analytics, it makes sense that adaptive retailing is having its moment in the sun at NRF 2024.
In some ways, retailers have always practiced the principles of “adaptive retailing,” which boils down to comprehensive and ongoing, data-driven focus on consumers to predict their behaviors and preferences—and then designing seamless digital and mobile experiences that deliver on them. However, retailers have so many more tools in their belt to provide deeper, more comprehensive insights, so they can really “meet customers where they are” and quickly surface relevant offers, content, and experiences that make shopping a more frictionless part of their daily lives.
One session really stood out—”Advancing next-generation seamless commerce: A discussion with Lowe’s.” In this session, Seemantini Godbole, Executive Vice President, Chief Digital and Information Officer at Lowe’s, gave one very clear example: “The Lowe’s app is one app. But if you’re a DIYer, you’re going to get a completely different app experience than if you’re a pro,” she explained. For instance, the DIYer sees recommendations to help them see which washing machine to buy. The pro knows what they’re shopping for, and they may be buying more than one. So they see a list of their orders, or a path to submitting an order into an approval queue for authorization.
The potential use cases for adaptive retailing are limitless, and as with AI, retailers need to establish a clear set of priorities that balances complexity and potential impact. As Godbole put it, you don’t want the effort to “die a death by a thousand pilots.”
4. Leveraging data at scale to keep up with Gen Z.
As I have said, the theme for 2024 is “The future is now.” You could also say, “The future is Gen Z, and the future is now.” In many ways, the challenges posed by Gen Z are just a more intense version of the challenges the industry faces in general.
The behaviors and preferences of Gen Z are changing so fast that traditional retail strategies just couldn’t keep up. But at the same time, advancements in AI and other analytics—and indeed all the other technologies mentioned, give retailers a fighting chance to keep up with the evolving behaviors and preferences of digital natives.
“Gen Z is willing to share their data with you, but it comes with high expectations around what you do with that data,” Caleb Pearson, VP of U.S. Customer Engagement at McDonald’s, told audiences attending the session entitled “Digital Strategies to Decode Gen Z.”
“This generation has higher expectations because they have so many choices, so any loyalty program interaction has to be both transactional and non-transactional,” added Lindy Li, Head of Customer Activation and Marketing at H&M.
5. Oh, and don’t forget to optimize existing use cases and processes.
The Logic team loved the way Seemantini Godbole framed the possibilities of adaptive retailing. But we also appreciated the way she doubled down on optimizing processes that are already in place. “We’re hearing so much about adaptive retail, but the truth is, existing use cases are just as compelling,” she said.
Working with retailers, that is the conclusion our team returns to in our work with business and technology leaders. Often, they can make the biggest impact by better utilizing the people, processes and technologies they already have in place. The annual NRF conference is a great place to dream big, but it is also a great time to remember the low-hanging fruit and the step ladder you already have to reach it. And it is always gratifying to hear reminders like Godbole’s—and the conversations among attendees where they hash out real-world problems and come up with solutions that are very much within reach.
Maybe in 2024 you want to squarely focus on unified commerce. Maybe you want to leverage your data to tackle operational challenges and delight customers. Or you need strategic guidance on solutions and technologies to pursue some other unique proof-of-concept that you’ve been considering. Whatever your priorities, the Logic team is here to help by supporting your people and optimizing your processes and technology to deliver real value that makes the most of 2024 and beyond.
Bill Szlaius is Co-Founder, Chief Executive Officer, and Chief Strategy Officer of Logic. Under Bill’s leadership as CEO, Logic has enjoyed more than 25 years of successful growth, delivering outstanding value to clients and tirelessly pursuing 100% customer satisfaction. In his dual role as Chief Strategy Officer, Bill leads the formation of Logic’s strategic direction to address the retail industry’s most pressing needs and solve client problems.