NRF 2016 Big Show – Creating theatre and losing the audience?

At last weeks National Retail Federation’s Big Show it was very clear that retailers are focused on tackling the ‘new norm’, retailing at the clock speed of todays customer, with digital transformation, Customer Experience and Big Data dominating the agenda. For me it was all about back to basics.


NRF 2016


Gartner stated that 2016 would be the year of the ‘algorithm economy’, for Retailers competitive advantage in the Digital economy will not only be found in the bright shiny new stuff only display at NRF but by also looking to unlock value in core merchandising and supply chain processes through machine learning.

Bringing new and immersive customer experiences to create theatre in store certainly provided a compelling case for the role of technology in this area, including comprehensive voice of the customer analytics to support store operations.

However, embracing Digital strategies is not without risk and not all about technology, fundamentally the customer has changed the economics of Retailing, this has serious implications for core Merchandising and Supply Chain process that are not calibrated to operate at the speed of customer.

Inventory management disciplines could well be a major obstacle for the industry in achieving Digital transformation. In fact, we need only look at current trading performances to see how increasingly difficult it is to remain both competitive and profitable, according to a recent IHL study Out-of-stocks, Overstocks, Returns Cost Retailers $1.75 Trillion.

Typically Retail Supply Chains by nature are composed of disjointed manual processes and systems, often struggling to profitably deliver the right product at the right time. In addition, many Retailers operate traditional forecasting and replenishment systems that are simply not designed to allow Retailers to transition quickly enough.

Big Data is not a solution itself in the Retail Digital economy, without algorithms to scale, automate and drive decisions the industry will struggle to make meaningful inroads on its digital transformation.

Retailers that recognize Data Science and Machine Learning as a perquisite for Digital transformation will be the ones that successfully redefine profitable Retailing in the algorithm economy.

Matt Hopkins Matt Hopkins

is a Retail Industry Principal at Blue Yonder. Matt has spent over 20 years in the Retail Industry, working in Supply Chain & Merchandising roles before joining JDA, Oracle Retail, Salesforce and SAP in senior leadership roles.