Major takeaways from NRF 2024: Exploring the new era of retail

Capgemini experts were part of this dynamic scene, leading conversations on how brands can navigate the changing landscape. Here we share our three interconnected guiding principles for harnessing the power of disruption to drive innovation and recap the major takeaways from the event’s speakers, exhibitors and attendees.

LEAD WITH PURPOSE

To succeed, retailers need to embrace a mentality that serves customers, communities, and the planet.

1. Athlete’s mindset: Developing leadership skills

On the morning of Martin Luther King Jr. Day, basketball legend Earvin “Magic” Johnson told a rapt audience about his journey from the basketball court to the boardroom.

Johnson, the Chairman and CEO of Magic Johnson Enterprises, talked about how the same athlete’s attitude that led his Los Angeles Lakers to five NBA championships contributes to his success in the business world.

“If I’ve done everything I’m supposed to do, I feel that I’m going to win. And I only hire people like that. The same type of mindset. The same type of dedication. The same type of discipline. The same type of focus,” Johnson said.

2. Self-confidence: Supporting women in business

Stephanie Linnartz, the first female CEO of Under Armour, and Diamond Miller, Forward for the WNBA’s Minnesota Lynx, spoke about their respective successes in business and sports, as well as the connection between the fields.

Linnartz emphasized the importance of supporting women’s and girls’ sports and always being “athlete first.”

“[We are] working closely with our athletes to meet their needs – look good, feel good, and perform well – and we’re going to be able to appeal to a broader consumer base,” Linnartz said.

3. Social consciousness: Staying relevant in changing times

Many businesses see a need to engage on the major issues of our time.

Michelle Gass, President of Levi Strauss & Co., said the brand is dedicated to being at the center of contemporary cultural conversations, “connecting it to everything that’s going on socially today.”

Anton Vincent, President of Mars Wrigley, said during inflationary periods manufacturers always assess what they can do to reduce costs and maintain quality. While there are many ways for a candy manufacturer to provide value, social concerns have become more important over time.

“Something we learned coming out of COVID was that consumers are much more introspective…. ‘Who’s running this company? How do I feel about it?’” Vincent explained. “People are really connecting their values with their transactions.”

4. Sustainable business: Reducing environmental impacts

Contributing to the global effort to reduce CO2 emissions to avert the worst consequences of climate change was also a big topic.

Steven Williams, CEO of PepsiCo, talked about how launching pep+, an end-to-end transformation with positive agriculture, positive value chain, and positive choices threaded throughout the company, is helping the company drive sustainable long-term value and competitive advantage.

“It’s about doing the right thing for people and the planet,” Williams said.

David Kat, Senior Vice President of Business Development at Wasteless, a Capgemini partner, said supermarkets often lose more money from food waste than they make through sales. To address this problem, Wasteless provides an AI-powered solution to dynamically reprice items with shorter expiration dates.

“We can cut more than half food waste, making retailers substantially more profitable, increasing revenues but also reducing their carbon footprints,” Kat said.

ADAPT TO COMPETE

To remain competitive, retailers need to navigate disruption and meet consumer’s changing expectations.

1. Dealing with disruption: Protecting supply chains

Raj Subramaniam, President and CEO of FedEx Corporation, wants to make supply chains smarter for everyone. He emphasized the importance of digital platforms to safeguard supply chains and foster trust and loyalty.

“Upheavals in global supply chains have reshaped retail and the tools that you need to be competitive, efficient, and resilient,” Subramaniam said. “Physical networks get us where we want to be, but digital supply chains make that journey faster, more precise, more reliable, and equally critical, more seamless and personal.”

2. Pricing rationale: Demonstrating quality in luxury

If luxury brands and retailers need to maintain or raise high prices, they must communicate what sets their products apart.

Anusha Couttigane, Head of Advisory at Vogue Business, discussed how the luxury fashion market has decelerated as consumers cut back. Despite this bleak outlook, she’s optimistic about growth potential in Brazil, the Middle East, and South Korea, where there’s great demand but low brand awareness.

“Think about the brand’s story and the credentials that you need to boost conversion,” Couttigane said. “Influence and advocacy don’t look the same in every market. Consider the reach of those cultural moments.”

3. Affordable choices: Keeping costs down for consumers

Drew Barrymore, Co-Founder of kitchenware company Beautiful, said she draws inspiration from niche products while prioritizing accessibility and affordability.

“It’s about figuring out that balance,” Barrymore said. “Ultimately the person who benefits the most at the end of the day is the consumer, but it has to be smart business because nobody’s here to do favors.”

Bob Eddy, Chairman and CEO of BJ’s Wholesale Club, emphasized that their entire business centers around providing members with tremendous value.

“Value always wins. So that’s my job, to make sure we have the right partnerships, the right products, and the right procedures to offer that value,” Eddy said.

4. The future of technology: Embracing AI in retail and life

During Capgemini’s NRF celebration at City Winery, Zack Kass, an AI Futurist and Former Head of GTM at OpenAI, delivered an insightful keynote on unleashing the potential of AI in retail.

He encouraged retailers to ask themselves, “What are the things that our vendors won’t do that if our competitors did would sink our ship?” Then, point everything at that goal.

“You don’t need to boil the ocean. One or two really cool applications will catapult your businesses forward,” Kass said.

He’s optimistic about how AI will shape our collective futures and warned against pessimism and cynicism stemming from dystopian science-fiction films.

“I think the future is exceptionally bright,” Kass said. “I think we are still in the very early days of the human experience. We won’t accomplish it unless we imagine it together.”

5. Repetitive-task automation: Increasing human capacity for better projects

A recurring theme throughout the conference was that we shouldn’t just replace human labor with AI, but use automation as a way to augment the human workforce.

Adrian Mitchell, Chief Operating Officer and Chief Financial Officer at Macy’s, said allowing AI to take over some business processes creates greater capacity to focus on strategy, execution, and innovation.

“What’s selling and what’s not? What’s profitable or not? A lot can be automated, which allows the team to spend more time on problem-solving and less time on reporting,” Mitchell said.

At the same time, the ultimate beneficiary of AI is the end customer.

Dave Kimbell, CEO of Ulta Beauty, explained that incorporating Gen AI and other emerging technologies into the products and services of beauty retailers starts with human connection.

“Despite all the technology that’s brought forward, there is a strong desire to discover and engage in beauty in human terms,” Kimbell said. “When we think of beauty innovation, it has to start with how we can complement, elevate, and highlight the human experience.”

UNLOCK CHANNEL GROWTH

To grow, retailers need to understand that channels must connect, not compete.

1. Intelligent retail: Integrating smart technologies into stores

A team from Capgemini demoed Casey, a conversational commerce digital assistant who can engage with customers in new and exciting ways: taking orders, providing directions, offering product suggestions, etc.

“Our initial vision for Casey was omnichannel growth, reaching customers with less infrastructure,” said Jennifer Marchand, Principal at Capgemini.

The team created a modular architecture for the custom user interface – combining visual reinforcements, conversational flow, and human empathy – to create conversations that supersede traditional chatbots.

“We can port and deliver Casey in a very quick fashion to across domains and enterprises,” says Mayank Chandra, Senior Director at Capgemini.

Grant Anderson, Developer at Capgemini, explained Casey doesn’t just help customers find products in stores but also provides tips on nutrition, mental wellness, immune issues, and other topics.

Dan Révah, Global Head of Presales at Shopic, a Capgemini partner, demoed a groundbreaking solution powered by AI called Smart Cart, “the world’s smartest shopping cart.” A sensor uses computer vision to detect each item added to the cart, present a live bill on a touch screen, and enable the customer to skip the checkout.

2. Brand focus: Mastering specific offerings

Too often, businesses spread themselves thin trying to be everything to everybody and lose sight of what made them special.

Martha Stewart, Founder of Martha Stewart Living Omnimedia, said it’s important to pay attention to your customer’s needs, but warned against overcomplicating one’s portfolio.

“I thought we were offering too many different styles of placemats in too many of the same colors. I wanted more colors and less variety,” Stewart said.

Shay Mitchell, Founder and Chief Brand Officer of Béis Travel talked about disrupting the retail industry with Kyle Leahy, CEO of DTC cosmetics brand Glossier.

“We have always seen ourselves as more of an on-the-go brand as opposed to a luggage brand,” Mitchell said. “We purposely launched with shoulder bags and accessories over rollers, so that we could solidify our space in the market as more than just luggage from the start.”

3. Empowered workers: Reimagining strategy for major chains

Many large retailers might not realize that “playing it safe” can be riskier than imagined.

James Daunt, CEO of Barnes & Noble, explained that the bookseller is mounting a comeback by decentralizing decision-making for individual stores. This empowers local teams but also gives the larger company the freedom to operate stores of different sizes.

“People like being in our stores,” Daunt said. “And if you run better ones with better service and make them more attractive, you will get more customers.”

BOLDLY STEP INTO THE FUTURE

Successfully navigating these changes takes a team.

Team player: Cultivating partnerships for success

During her session, Barrymore said, “We never do anything in this world, in this life alone. So, find that partner. Find those people.”

At Capgemini, we echo that sentiment, offering a range of services and solutions, as well as digital and industry expertise and ecosystem partnerships, to help our clients capitalize on the opportunities of the market and turn NRF inspiration into action.

I’d like to conclude this post with a short list of thought-starters from our most recent consumer trends research, What Matters to Today’s Consumer 2024. Now in its third installment, this consumer behavior tracker identifies the latest trends and shopper preferences across the consumer products and retail industries.

Adapt to compete

• Use generative AI tools to become more consumer-centric: A personalized experience has never been more important. Generative AI-enabled tools can help retailers and brands create timely and relevant interactions for shoppers, enabling a truly individualized experience.
• Leverage technology to reduce costs for consumers: In a tough economy, retailers need to take a transformational approach to cost reduction so that they can remain competitive for consumers. IoT technology, data, and AI need to play a central role in every aspect of the business—from remotely controlling lighting and HVAC systems in stores to optimizing shipping routes—all in the name of reducing costs for shoppers.

Unlock channel growth

• Leverage social as both a feeder channel and a sales channel in its own right: Our research indicates that social media is playing an increasingly important role in discovery across all demographics and shopper journeys. It also reveals that for many shoppers, especially younger ones, social sites are the preferred platform for purchase. Retailers need to recognize the expanded role that social media is playing for many consumers and invest accordingly.
• Tap into the power of influencers with specially designed programs for story-selling: People buy from people—and that makes influencers very important to brands and retailers. Now is the time to find authentic brand ambassadors and invite them to share their real-life stories on brand platforms to reach consumers on a deeper, more personal level.

Lead with purpose

• Educate consumers on the sustainability impact of their shopping: Our research showed that sustainability is an important issue for shoppers—but it is also a potentially confusing topic. Consumers are looking to brands and retailers to help them understand sustainability claims and make good decisions. Companies that help people navigate this issue will likely build loyalty in the process.
• Reduce food waste to help combat the cost-of-living crisis: Food waste is one of the biggest challenges our society is facing. Retailers have an important role to play in solving this problem at the root level by eliminating food waste in stores. From dynamic pricing to consumer education programs, retailers can lead the way to a less wasteful future.

Retailers certainly face a challenging year ahead. But in reviewing the highlights of NRF, it has become even more clear to me that with the right partners, digital capabilities and strategy, companies can effectively manage many of the issues on the horizon. If your retail organization would like to discuss your plans for the coming year, Capgemini is here to help. Please feel free to contact me to set up a consultation and download our recent research for more insights on the trends that are shaping the industry in real-time.