Innovating in Retail

A look back at NRF Retail’s Big Show presented by KPMG in Quebec

Taking the time to understand changes in society and consumers, and the usefulness of technological innovations is an essential process for any business. In fact, the National Retail Federation (NRF) Retail’s Big Show provides the perfect opportunity. This annual event is held over three days in New York City and a global reference in the industry.

The 2023 edition of this event was no exception and saw the return of visitors and exhibitors for the first time since the pandemic. More than 36,000 visitors, 6,500 retailers and 1,000 exhibitors took to the halls of the Javits Center to discover current trends with the support of 150 high-level events.

The retailers in attendance shared a rather optimistic view of the industry for 2023, despite a new difficult period following disruptions due to health restrictions to counter COVID-19.

The war in Ukraine with its geopolitical and energy impacts has come at a time when supply chain tensions related to factory closures in China have not all been resolved. In 2022, online sales are plummeting with the reopening of bricks-and-mortar stores while the Great Resignation and career changes during the pandemic continue to weigh on resources and costs related to shops and services. The profit-by-sales growth model also faces a deeper adoption of more sustainable and judicious consumption, particularly against a backdrop of high inflation and a potential recession.

These are some of the issues that emerged from discussions with retailers attending the conference.

The KPMG delegation present on site analyzed this feedback and identified four new Ps to be taken into account in the strategies and investments of retailers, in addition to the four Ps defined in 1950.

P for People: How can we acquire and retain new talent, and adapt to consumer and shareholder expectations?

P for Planet: How can we best meet the need to reduce each industry player’s environmental footprint and the resulting regulatory requirements?

P for Profit: How can we continue to invest and remain profitable despite rising labour, energy and technology costs to meet consumers’ needs and stand out from the competition?

P for Purpose: What common goals and values unite all the stakeholders across the organization while balancing the three P’s set out above?

This is where some of the innovations and solutions unveiled at NRF Retail’s Big Show can help retailers address these tensions.

Triangle 4P

People vs. Profit: How to make up for a people shortage?

A broad number of digital solutions allowing sellers to better assist customers were presented at this edition of NRF Retail’s BIG Show. Among these solutions, mobile apps dedicated to sellers are a fine example, as they not only provide detailed information about customers who show up in store by including their online history (abandoned shopping carts, wish lists, previous orders, etc.), but also provide precise inventory availability across the network of stores and warehouses. As a result, they allow the customer’s purchase to be cashed in immediately, even if the product(s) are not available locally. This makes the seller and their work more satisfying and effective.

In addition, to streamline the purchasing process and make up for sales employee shortages, many autonomous checkout solutions were also on display. A trend you’ll not want to overlook! As a matter of fact, Couche-Tard has announced that it is equipping 7,000 points of sale with autonomous checkouts.

Automation also affects the retail supply chain, which is a less visible yet essential part of the ability to meet customer satisfaction. Over 24 robotics companies were on site to present their optimization, logistics process, order picking and warehouse pallet movement solutions.

Planet vs. People: How can consumption be reconciled with sustainability?

Retailers are now facing a consumer who understands the impact of their own consumption on the planet but continues shopping for fast fashion anyway. A special paradox!

However, between these contradictory facts, a more sustainable underlying trend seems to be taking over: shopping for second-hand goods. Technology platforms are popping up to allow brands to manage a second-hand business line both internally and externally. These technologies are driving new business, while satisfying a desire for more ethical consumption. For example, Paige Thomas, CEO of Saks 5th Avenue, explained during one of the NRF events that she chose to handle second-hand products in-house to keep her customers on her site. In her case, she relies on technology from the Rent The Runway marketplace, which also distributes a variety of other brands. Truly a win-win partnership!

People vs. Profit: What investments meet consumer expectations?

Two words to take away from this edition of NRF Retail’s Big Show: Customer Centricity.

To respond to this trend, various approaches are adopted such as the immersive in-store experience that help create emotional universes.

Another response to this trend is the development of e-commerce platform offerings on composable architectures. This type of architecture provides retailers greater flexibility to integrate the full range of customer touchpoints (e.g. store, e-commerce, social networks, customer service, live shopping, etc.) to make them transactional, seamless and frictionless parts of the shopping journey.

A sign of this fundamental trend is Shopify, a market-leading e-commerce platform, initially based on a monolithic architecture. However, at NRF Retail’s Big Show 2023, the company launched its composable version: Commerce Components by Shopify designed to meet retailers’ customization needs.

All these solutions aim to unify the consumer journey while boosting IT agility in rolling out technologies. Frictionless shopping experiences drive loyalty and, in turn, customer lifetime value. A real impact on customer acquisition cost ROI.

In a nutshell, while retailers face new challenges, they can be overcome by leveraging some of the technologies and innovations available. Patagonia is a great example of successful 4P balance. Founder Yvon Chouinard built his success on the authenticity of his actions to protect the environment (Purpose) and successfully reconciled consumers, employees (People), the Planet and Profit.

Similarly, retail professionals at KPMG across the country are working with multiple companies to navigate a changing market and identify opportunities for sustainable growth. KPMG offers a broad range of consulting, tax and audit services that leverage the 4Ps and focus on the customer and industry to enhance the organization’s value and impact. To learn more about our retail services, check out the following KPMG webpage: Consumer and retail – KPMG in Canada

To learn more about the trends identified at the 2023 Retail’s Big Show, we invite you to read the following KPMG report: Retail’s delicate balance.

Comtent presented by

kpmg logo