The JCWG team attended the NRF Big Show a few weeks ago and it was impossible to miss all the retail tech enabling hyper-efficiency. While there was a lot of technology directed at improving the online or in-store experience, the majority was focused on one main goal: make retail operations more efficient for everyone.
Not only did the JCWG advisors sit in on sessions about technological advancements, but also walked the Expo Floor to see what the newest products were for retailers to streamline their operations, their customer experience, and their corporate tasks.
With inflation being a hot topic at this year’s Big Show, there were many conversations around improving supply chain efficiencies. During a conversation with Macy’s CEO on the first day, their organization were clear in these efforts.
First, they (as with many other retailers) are attempting to become significantly less reliant on China for production. Not only are lead times becoming longer and longer, but the savings are not what they used to be. Instead, they are looking to smaller vessels from nearby countries.
Another interesting note from the same conversation is that, as the issues with supply chains are nowhere near solved, in Macy’s situation, have moved from “just-in-time” ordering to “just-in-case”. Now some retailers may not be in the position to order in bulk as much as Macy’s, it seems that accurate forecasting is essential as is ordering early (just as consumers have done throughout the holidays).
Though there was a lot of hardware at the Big Show, there was also a lot of retail software . The majority of this software was focused around Artificial Intelligence (AI). There were numerous applications of this technology , for example:
- Merchandise Forecasting – there is software that can analyze entire revenue histories of a brand to identify sales trends more accurately for precise product ordering for complete inventories.
- Visual Merchandising -AI is able to identify traffic patterns and customer sales habits and run millions of possible combinations for the most successful sell through.
- Combining these two applications, JCWG demoed a software that can take both of these elements (alongside scheduling preferences) and build ideal labour schedules at a UPC level to guarantee the best utilization of salespeople and where they are placed in a store.
The software’s mentioned are all relatively easily implemented compared to previous solutions and allow for all human elements of retail to work more efficiently. Through AI, there is the ability to further work towards the goal of having the right inventory, in the right place, at the right time. This allows customers to shop more conveniently, and should they decide to go into a store, AI is able to better predict where/when an associate needs to be available to help to add to the customer efficiency.
In-store operations are difficult for retailers to imagine improving. With labour shortages all across North America retailers are more concerned with just getting staff to stay operational rather than making the operations more efficient.
For retailers with sufficient revenue to afford it, automation is the solution to this problem. This includes delivery robots, robotic arms to pack orders and automated shelf scanners to identify what products need to be restocked. Though there is a significant capital investment into these technologies, a large retailer will likely offset these costs as the cost of labour will inevitably continue to increase in the future. The labour shortage is not going away anytime soon, so retailers need to figure out how to adapt.
For small and medium sized businesses, this technology (as of 2023) may be unrealistic. Spending millions of dollars on robotic arms to package under 100 orders a day will have a long return-on-investment, and even then is likely not feasible. For these retailers, there were still options being presented. For example, there are apps that retailers can use (similar to the “Task Rabbit” concept) where they can hire skilled retail workers for small increments of time. This can include bringing in a few extra staff for your inventory counts or bringing in extra baristas when you know there is a large morning event occurring near your coffee shop. For small businesses, this can allow for improved efficiencies without needing to invest into expensive technology or hiring staff who are only needed for a few peak times.
Improving your efficiency is important to many forms of retail. Physical stores are remaining important, and efficiency is often the reason. For other brick-and-mortar locations, it is often the experience that matters most to customers rather than how seamless the interaction was. Check back on the blog next week for our reflection on ways the NRF Big Show 2023 expanded our knowledge on customer experience.
Reach out to JCWG advisors to discuss new efficiency innovations can support your business.