With our Editor’s full report on NRF 2014 due soon, and his previous “top trends” already published, Peter Bambridge adopts a different tack and picks out 12 of his personal insights from retail’s big show in New York City – a shortlist of things that retailers and solution providers should be aware of.
The National Retail Federation held their 103rd annual convention and exhibition called “Retail’s Big Show 2014” from 12th – 15th January 2014 at the Jacob K Javits Convention Centre in New York City.
Thousands of delegates attended the conference, which covered over 100 sessions this year that were spread over the four days. In addition, over 30,000 people attended the exhibition, which occupied the middle two days. With over 520 exhibiting solution providers filling 190,000 square feet of exhibition space, there was clearly a lot to cover. 30% of the visitors were international in origin.
The following are twelve insights that I feel are particularly relevant to the PLM world.
1. ERP Vendors covering PLM
There were a number of traditional ERP solution providers at the NRF exhibition who are now covering PLM as a part of their solution proposition. This is in response to a growing market need to ensure tight integration between operational systems and product development, as well as the commercial opportunity that the wider solution footprint represents.
The potential to significantly reduce implementation complexity, time scales and costs are key drivers to this extended positioning. In 2014, we will see increasing numbers of ERP vendors claiming to address PLM, and PLM solution providers offering pre-defined integrations to multiple ERP platforms, along with assorted new alliances.
2. Supply Chain Execution interest is Growing
Vendors such as Core Solutions, ecVision, NGC (not exhibiting at NRF) and a variety of PLM vendors with Sourcing solutions such as Yunique Solutions, Dassault Systemes, PTC, are representative of a growing interest in supply chain execution solutions.
The successful execution of the investment in product innovation in order to deliver the right product to the consumer at the right price and time has not gone away. With the growing interest in Social and Ethical Compliance as well as product quality the need for visibility though out the supply chain is increasingly vital.
3. Merchandise & Assortment Planning Solutions Differ
With an ever increasing set of planning solutions being available to retailers, there now appear to be two clear groups ranging from the smaller niche specialist solution providers (like Ant USA, Da Vinci, Quantum Retail, 7th Online, Micros, Just Enough, Predictix) and the mainstream enterprise solution providers (like Oracle, JDA, SAP, TXT).
In 2014, we will continue to see growth in demand for close integration between financial/merchandise planning and assortment planning with PLM, as the need for end-to-end processes becomes more established. TXT were demonstrating their just released enhanced versions of both Planning and PLM which are closely integrated. In addition, the trend for integrating or embedding Business Intelligence and workflow will continue.
4. Predictix extends planning capabilities deeper into Assortment
Predictix have a SaaS based suite of consumer centric merchandising solutions. By extending the flexible planning capabilities deeper into Assortment planning, Predictix now have a more comprehensive suite of planning and information applications. The Planning & Assortment capabilities combine with Pricing & Promotions, Forecasting and Replenishment in the integrated suite.
While Predictix do not market a PLM solution, their planning capabilities can be integrated with a variety of product innovation platforms. With the increased focus on planning driven PLM, this area is anticipated to grow significantly in 2014.
5. Mid sized Retail focused service providers are beginning to appear
There are a number of major System Integrators across Retail who provide a wide variety of services. This has traditionally been complemented by vendors providing professional services for implementation, and a broad selection of independent consultants.
What appears to be developing now is a new ‘Middle’ to the market where there was little offering previously. Combining associate networks into industry specialist forces to be reckoned with are companies like Columbus Consulting across Retail, and Kalypso specifically in the PLM space.
6. Gartner demonstrated their strength in Retail
The elite retail team of Gartner’s leading industry analysts: John Davison, Kevin Sterneckert, Jeff Roster and Janet Suleski, provided their view on the processes and technologies that will allow retailers to lead in a digital world at the Gartner breakfast briefing. By combining insights on current industry trends with knowledge of the wide variety of available solutions focused on the retail market, the Gartner team provided clear focus and guidance on what to pay attention to at the show.
7. ARTS continues to progress with Standards
ARTS is the Association of Retail Technology Standards within the National Retail Federation. It’s mission is to develop best practices/ technical standards / education programs to allow retailers, their vendors and suppliers to conduct business globally. With over 40% of members now being non US companies, the global dimension is continuing to grow.
ARTS continues to make progress in developing a comprehensive suite of standards to help retailers and their suppliers to work more efficiently. The main focus areas are the ARTS Data Model, the XML Schema Documentation, POS interfaces and the RFP library. Recent progress has included 3 big XML standards on Price, Location and Charity.
The requirement to become ARTS Compliant will increasingly become important as ARTS continues to expand.
8. The new era of ‘Cognitive’
Ginni Rometty, the Chairman, President and CEO of IBM, presented the perspective that in addition to the well recognised focus on ‘Big Data’ and ‘Cloud’, the new area of ‘Cognitive’ is going to become the next era of computing. By Cognitive what is being referred to here is the next generation of intelligent systems that can absorb massive amounts of information, analyse it, come up with scenarios, and predict the scenario consequences, and based upon this, learn and continue to improve. Ginni demonstrated live a deceptively simple example of FLUIDXPS and Watson working together to answer English language questions. Another application of this technology that she mentioned was its use in helping fight cancer, after loading all global research into a cognitive system for analysis.
It may be a while before this sort of cognitive technology becomes a cost effective approach to change the day-to-day world of product innovation.
9. Moving from ‘Convergence’ to ‘Context’ in 2014
According to Matthew Townsend of Bloomberg: If 2013 was ‘the age of customer centric convergence’, then 2014 is ‘the age of context’. The earlier focus for many was the convergence on the retail world of the web, big data, mobile and social to serve the consumer. This is now perceived to have moved on to become more about next generation location based tailored marketing messages and the use of wearable technology.
If ‘showrooming’ is now obsolete, and the consumer is more focused than ever on online reviews and price comparisons, there is a new opportunity for the voice of the consumer in context to be integrated back into the PLM innovation processes.
10. Disruptive times in Retail
Hamish Brewer, the CEO of JDA, presented the findings of a recent survey of 409 retail CEOs, across 8 Countries. The survey was a joint project between JDA, PWC and Forbes, which covered 53% of retailers from the Global 1,000.
The key findings that were presented included:
- The pace of change is accelerating, with more change coming in the next 5 years than the last 50 years.
- The death of channelisation, as omni-channel has taken over.
- Consumers are always shopping.
- There are three dimensions to retail expansion: into new markets, new stores, and by M&A.
- That customer retention is key.
- There is high confidence in growth (by 63% of CEOs, but less confident in UK & Canada).
The top concerns of the CEOs were reported to be margin erosion, retaining customers and competitive threats. As a result, it is clear that the pressure on cost control is not going away any time soon.
11. Deloitte’s positive view on the Economy
Ira Kalish, Chief Global Economist for Deloitte Research presented his views on the state of the economy, and shared a summary of his findings. The main comments by geography from this leading economist were as follows:
Problems in China are developing as the debt level, which is low as a share of GDP, has risen a lot. Assorted off balance sheet arrangements have been adopted extensively, and there is an increasing likelihood of a financial crisis coming which will probably require a government bail out. The working age population has stopped growing, and production is shifting to lower cost countries where lower wages persist (Vietnam, Philippines, Mexico, LATAM,…). There is a need for increased consumer spending in China.
In Europe, the good news is that Europe is coming out of the recession; the bad news is that growth is slow. Banks are relatively weak, with approximate interest rates in Spain & Italy at 5.5%, where they are only 3.5% in France & Germany. This is holding back investment in the very countries that need it most. Germany appears too focused on austerity, where it would be better to focus on consumer demand. France’s economy is weak, with high taxes, and labour reforms are needed to improve the economy. The UK is reviving with a reliance on housing and spending as a result of pent up demand. Real wages are rising, and employment rate is good, but there is a need for more manufacturing and export.
In the US, the recovery is pretty robust, the dollar is strong, and the federal reserve policies appear to be working. The housing market is coming back, but there are higher mortgage interest rates. One year ago 24% of properties were under water, now improved to only 14%.
Optimism is increasing in the US with current fiscal policy, and federal tapering being modest. Low energy prices and a manufacturing recovery will help address pent up demand. There is a transport revolution taking place currently, with young people driving less, preferring to walk / cycle / live centrally. Combining this trend with the growth in the internet for both shopping and working online, there is a trend towards needing less shops. The impact on retail could be significant.
Deloitte has now published their annual research report “Global Powers of Retailing 2014 – Retail Beyond begins”.
12. Life is Good
BJ Bueno, the founder of The Cult Branding Company, brought a new level of understanding to customer focus, as a retail consultant and consumer marketing strategist. Translating Abraham Maslow’s ‘Hierarchy of Needs’ from ‘physiological needs’ to ‘self-actualisation’ into core values for a business.
Bert Jacobs, one of the founders of Life is Good (along with his brother John), gave one of the most engaging presentation of the entire conference. Bert shared a number of lessons, and what he called ‘Superpowers’ including:
- Fun is a superpower: We have to be able to have fun and laugh at ourselves.
- Simplicity is a Superpower: Keeping T-Shirt slogans simple works.
- Gratitude is a Superpower: The first Pumpkin Festival raised over $100,000 for charity. The most lit pumpkins in one place event raised over $500,000. Having a strong social cause is key.
- Compassion is a Superpower: To date over $11m has been raised for kids in need.
- Authenticity is a Superpower: Know who you are, and act like it. You need to connect with people.
- Creativity is a Superpower: All slogans on T-Shirts now go onto Hallmark cards (and contribute t charity). The brand is all about the receivers, not itself.
- Love is a Superpower: After the Boston marathon bombings, the ‘Nothing is stronger than love’ T-shirt raised over $500,000 for the One Fund Boston (100% of the profits). It is their best ever selling T-shirt.
Translating Superpowers into retail, is all about having genuine core values, and applying them throughout the business. For example, Life is Good gives 10% of all its profits to charity.
Look for more coverage of NRF 2014 here on WhichPLM throughout January and February, and a brand-new series of articles from Peter Bambridge soon after. Our Editor’s full report on the show is due in January, followed by exclusive and detailed interviews with leading figures in PLM and retail in the weeks thereafter.
Peter can be contacted directly through his author profile below, or via his email address: firstname.lastname@example.org
Selected images are the property of the National Retail Federation.