Retail Innovation Continues To Improve As Budgets And Margin Grow
Over 40,000 attendees gathered at Jacob Javitz convention center in New York City for the annual big show (see Figure 1.) The show kicked off with a keynote from BJ’s Wholesale Club Chairman, President, and CEO Chris Baldwin. Chris conveyed the impact of retail on the economy with $2.6 trillion in US GDP, one third of Americans starting their first job, and one in four jobs in the U.S. Despite the stereotypical grim outlook, Baldwin noted that retailers had 2,000 net new store openings in 2018.
Figure 1. Registration at Javitz Center
Top Trends Highlight A Business Model Shift
Top retail trends for 2019 include both technology and business model shifts (see Figure 2). New business models include:
- Mass personalization at scale
- Multi-channel return optimization
- Private labels
- Checkout free retail
- Pop-up stores
- Small format stores
- Stores as distribution centers
- Digital supply chains
- Micro warehousin
Figure 2. Retailers navigate exponential tech amidst new business model shifts #NRF2019
Key technology trends in order of importance:
- AI and machine learning pervasiveness
- Dynamic pricing and pricing optimization
- Order management and order orchestration
- Robotics and drone automation
- Blockchain adoption
The Bottom Line: Retailers With Digital Efforts And New Business Models Will Win
Retail performance shows a growing dichotomy between the winners and losers. Brick and mortars who built digital business models will continue to lose market share and revenue to pure play digital players unless they adjust their business models for digital. Winners will continue to focus on contextually relevant, experience driven, design principles. Retailers must build joint ventures to counter the Amazon threat in order to invest enough in innovation. Partners with public cloud service providers such as Google Cloud and Microsoft Azure will be required to beat Amazon.
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