While most consumers have spent their budgets over the holiday season and look to pull back and recover in January, retailers spend their time doing the exact opposite. They’re too busy keeping stores and online humming over the holiday season, but when that’s over they descend on the Javits Center in Manhattan in January with their own budgets refreshed and shopping lists in hand.

You can always get an early sense for how retailers did over the holiday season by their mood in January. If they’re crying into drinks you know it was a miserable holiday season, and if they’re toasting the town you know they did really well. Bad news like Bed Bath and Beyond’s warnings of potential imminent bankruptcy and Party City’s full-on announcement aside, this year’s NRF was definitely more on the “toasting the town” side of the spectrum.

This means retailers have budget approval to improve their technology capabilities. It’s always in the context of an expected return on investment, but it’s clear the money is there to invest. So what are they investing in? A look at their shopping list:

Real-Time Inventory

You may see the term “inventory visibility” used interchangeably with real-time inventory, and while having inventory visibility has long been an objective in retail, retailers are learning that the time stamp on that inventory is nearly as important as the quantity of an item and where it is or its status. If you know your inventory from 3 days ago with 100% accuracy, that does little to help you understand whether you have any left in a particular store that has been busy selling for the last 3 days. Retailers need to see all of their inventory where it is right now.

Any tech person worth their salt will shudder when they see the term “real time”. Real-time data is expensive both from a solution architecture and from a network perspective. Before omnichannel processes like buy online pickup in store (BOPIS), a daily snapshot of inventory at the end of the selling day was real-time enough.

No longer. If the website can’t see what’s sold in the store since it opened this morning, then retailers have to put buffers on the inventory it makes available for things like BOPIS. Retailers absolutely don’t want to have to cancel orders, but taking an item off the website simply because you can’t be sure you have enough in stores to continue offering it for ship from store – that is costly too.

One solution that can help with this problem is item-level RFID. You don’t have to look in every store every second – again, that would be very expensive to support – but if customer views an item’s online product detail page, you could certainly take a glance in the stores most likely to be used for fulfillment to see if enough of the item is on hand to fulfill if the customer adds it to the cart.

The challenge with RFID is adoption. I’ve hosted too many round tables and panel discussions where there is one retailer at the table who has adopted item-level RFID in stores and everyone else has not. The adopter is an evangelist facing a room full of skeptics. From what I’ve seen, retailers really do need to put 100% item coverage in one store, with 100% reader coverage in the same store to really understand what’s possible and how it could change their lives.

Most retailers looking for real-time inventory are looking for better intra-day visibility into inventory snapshots. A few retailers are ready to see about whether RFID can get them that and maybe something more. Will 2023 be the year of RFID adoption? Based on discussions at the NRF Big Show, not the tipping point, but certainly still on an upward adoption trend.

Point of Sale

Point of sale (POS) is the heart of the store. I suppose you can still at least take cash with only a notepad, pen, and a calculator, but nowadays with card payment adoption and loyalty programs and omnichannel save the sale in stores, if your POS is not running you’re not transacting.

The pandemic impacted POS in two ways: with stores closed, retailers were not prioritizing updates to store technology. And, thanks to technology supply chain disruptions, they couldn’t get their hands on hardware for stores anyway. However, the bill for those delays is coming due. Some important POS operating systems have already or are about to be sunset, and many of the required replacements also require new hardware to run them. Supply chain issues or not, retailers really can’t afford to delay any longer.

The last year has also seen consumers return to stores, and retailers are anxious to return to their plans for store technology. However, there have been some important shifts. With challenges hiring enough workers, mobility is a high priority in order to help store associates be as productive as possible no matter where they are in the store.

Retailers at NRF were definitely prioritizing streamlining their device investment as much as possible. This isn’t about adding more devices to stores. Challenged by the tech supply chain, they’re looking to remove servers and mobile devices so that store associates have one device that can increasingly do everything from inventory and fulfillment, to building a cart, to taking payment.

And retailers know that consumers now expect more from stores than stores delivered before the pandemic. Retailers want to position their stores to better match those expectations – for things like events and community, local authenticity, and more experiential retail.

In the past, retailers who got behind on their tech investments in stores often were only focused on catching up to the current standards. This year, even for lagging retailers, the focus seems to be leapfrogging – focusing more on speed of innovation, and the flexibility to rapidly adopt to consumer expectations as they emerge.

Loyalty

After living through the death of tracking via Apple
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, retailers have no desire to wait around for when that comes to Google and Android next. Retailers need to be where their customers are, which means they increasingly need a compelling reason for consumers to be willing to identify themselves when they approach from different channels or touchpoints.

Another factor is combining to increase retailers’ interest in loyalty programs: returns. Retailers who don’t have much else to offer in the way of, say, streaming movies or music are turning to their loyalty programs to help them manage their returns challenges. Loyalty programs increasingly offer tiers that include a paid level. Entry-level loyalty means collecting points and redeeming them while receiving special offers. Paid loyalty subscriptions mean things like free shipping or free returns.

In return, retailers get a clearer picture of customer activity and behaviors, along with preferences – data that has become extremely hard to get and much more expensive as more and more consumers opt out of being tracked.

A Joyful NRF Big Show

When retailers do poorly, their shopping lists at NRF’s Big Show often take a big cut – along with even the travel budget to get there. It was great to get back together and catch up with people who haven’t been in the same room together for two or three years. That energy alone would be enough to create a positive energy at the conference. However, it’s difficult to sustain that kind of energy over three full days of walking Javits end to end.

There was an underlying relief among most retailers that was palpable: they have greater confidence in what consumers will want from them going forward, and whether they meet Wall Street’s expectations for performance, they clearly did better than they expected. This has given them the confidence to move forward with technology investments even in the face of an uncertain future. That’s good news for everyone at the show – and for consumers too.