nrf 2018 retails big show-takeaways from day one …€¦ ·  · 2018-01-15title: microsoft word -...

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January15,2018

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018TheFungGroup.Allrightsreserved.

NRF 2018 Retail’s Big Show: Takeaways from Day One

TheFGRTteamisattendingNRF2018Retail’sBigShowinNewYorkCitythisweek.Withmorethan35,000attendeesfrom95countries,including18,000retailersandmorethan600exhibitors,thetradeshowisoneofthebiggestintheretailindustry.Belowareourkeytakeawaysfromthefirstdayoftheevent.

1) Inteldemonstratedseveralsolutions—notproducts—forretail,allofwhicharebasedondata.

2) Factoringweatherdataintodecisionscanhelpcompaniesforecastmoreaccurately,reduceinventory,increaseefficiencyandraisenetincome,accordingtoPlanalyticsandJDA.

3) Walmartstillviewsretailingasapeoplebusinessandthecompanycontinuestofeelthepresenceofitslatefounder,SamWalton.

4) Instagramisincreasinglybecomingaplatformthroughwhichbusinessescanconnectwithconsumers.

5) Ine-commerce,internationalretailersaregainingadvantagesintermsofcustomerexperienceratherthanprice.

1)Inteldemonstratedseveralsolutions—notproducts—forretail,allofwhicharebasedondata.AtNRF2018Retail’sBigShow,Intelshowcasedseveraltechnologies,allofwhichwereofferedbyothervendors.DatawasthethemeofIntel’spresentationatlastweek’sCES2018tradeshowinLasVegas,anditseffortsthisyeararefocusedonhelpingcompaniesmanagethefloodofdataproducedbycamerasandsensorsofvarioustypes.Intelhasinvested$17billionindevelopingInternetofThings(IoT)productsanditseekstoincreaseitsreturnonthisinvestmentbydeployingthosetechnologiesacrossindustries,includinginretail.Intel’swideanddeepviewofthetechnologylandscapeenablesittoadvisecompaniesontechnologiesandsolutions,actingasamatchmaker.Companiesthenpurchaseproductsandservicesfromthird-partyproviderswhoseequipmentandsolutionscontainIntelcomponentsandtechnology.

UsersofIntel’sretailtechnologyincludeChina’sJD.com,whichisusingInteltechnologytocreateanautomatedstoreformatcalledD-Mart.InitsexhibitionboothatRetail’sBigShow,Inteldemonstratedaretailshopthatusesitstechnology

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January15,2018

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018TheFungGroup.Allrightsreserved.

totrackvisitoranddemographicinformationthatcanbeusedtocreatetrafficpatternsandheatmaps.CandyretailerLolli&PopsdemonstratedIntel-basedfacialrecognitiontechnologythatisusedforcustomeridentificationandloyaltypurposes.TheIntelboothalsofeaturedshelf-stockmanagementanddisplaysystemsandBossaNovarobots,whichcanmonitoron-shelfinventory.

Smart-shelftechnologyondisplayattheIntelboothSource:FGRT

2)Factoringweatherdataintodecisionscanhelpcompaniesforecastmoreaccurately,reduceinventory,increaseefficiencyandraisenetincome,accordingtoPlanalyticsandJDA.PlanalyticsandJDAgaveajointpresentationtitled“ShowMetheWeather”thathighlightedthebenefitsofincorporatingweatherdataintoretailforecastingandplanning.TheinclusionofPlanalyticsweatheranalyticsonJDA’sdemand-planningplatformoccasionedthejointpresentation.AnexecutivefromJDAoutlinedthechallengeofpredictingconsumerdemandanddiscussedthebenefitsofanalyzingsocial,news,eventsandweatherbigdata.

EvanGold,EVPofGlobalServicesatPlanalytics,distinguishedbetweenweatherdataandweatheranalytics,whichcanbeusedtodetermineweather-drivendemand.Goldsaidthatretailersmustfirstdeweatherizeretailsalesdata,i.e.,adjustthedatatoremoveweather-related-demandfactors,sinceweatherrepeatsonly15%ofthetime.Thisadjustmentleavesretailerswithaweather-neutralbaseline.Then,retailersmustaddbackinforecastupcomingweatherimpacts.Planalyticsclaimsthatthisprocessresultsinanaccuracyimprovementof82%insubclasses,aswellasanincreaseoftwotofivepercentagepointsinnetincome,whichishighlysignificantforretailers.Usingweatherdatacanhelpretailersimproveforecastaccuracy,reducestockandinventorycarryingcosts,andensureconsistencyandscalability,Goldsaid.Italsoprovidesotherbenefitsintermsofmarketing,laborplanningandreplenishment.

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January15,2018

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018TheFungGroup.Allrightsreserved.

SlidefromaPlanalyticsandJDApresentationdetailinghowretailerscanuseweatherdatatoimproveforecastaccuracySource:FGRT

3)Walmartstillviewsretailingasapeoplebusinessandthecompanycontinuestofeelthepresenceofitslatefounder,SamWalton.NRFPresidentandCEOMatthewShayinterviewedWalmartCEODougMcMillononthefirstdayofthetradeshow.Theconversationtouchedonanumberoftopics,rangingfromMcMillon’sstartwithWalmarttohowthecompanyismaintainingitsvaluesdespiteaperiodofrapidtechnologicalchange.

McMillonsaidthathebeganhiscareerwithWalmartbyworkinginacompanywarehouse,whichledtostintsinthestoresand,ultimately,tothehomeoffice.HewilllikelybethelastWalmartCEOwhoactuallyworkedwiththecompany’sfounder,SamWalton.

Muchofthediscussioncenteredonemployeeissues,particularlythecompany’srecentannouncementthatitwouldgrantemployeebonusesandmaternalandparentalleavetocertainemployees.Regardinge-commerceandWalmart’sJet.comacquisition,McMillonsaid,“Althoughwehavebecomeadifferentkindoftechcompany,thepeopleintheprocesswillbethewaywecanwin.”Henotedthatthecompanyisusingvarioustechnologies,includingvirtualreality,inits200-plusacademiestohelpstaffdeveloptheirskills.

McMillonconfessedthatWalmarthadinitially“missedthememo”onsocialissues,butthatthecompanyhadthenstartedlisteningtoitscritics.Theretailer’senvironmentalandsocialeffortsnowincludeagoalofreducingitscarbonfootprintby1billiontons.Regardingthecompanyculture,McMillonsaidthatalthoughSamWaltonpassedawayin1992,hispresenceisstillfeltthroughoutthecompanyandthatallWalmartemployeesknowthattheonlyconstantwithinthecompanyischange.

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January15,2018

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018TheFungGroup.Allrightsreserved.

WalmartCEODougMcMillon(left)isinterviewedbyNRFPresidentandCEOMatthewShaySource:NRFRetail’sBigShow

4)Instagramisincreasinglybecomingaplatformthroughwhichbusinessescanconnectwithconsumers.Instagramisincreasinglybecomingaplatformthroughwhichbusinessescanengagewithconsumersformarketingandproductdevelopmentpurposes.MorethanhalfofInstagram’s800millionusersconnecttobusinessesvoluntarilyviatheplatform.SincetheintroductionoftheInstagramStoryfeature,athirdofthemost-watchedStorieshavebeenuploadedbybusinesses.

TylerHaney,FounderandCEOofactivewearbrandOutdoorVoices,saidthathiscompanyhasbuiltasuccessfulInstagramstrategybyactivelyseekingcustomeropinionsviaInstagramthroughouttheproductdevelopmentprocess,astrategythatfewretailersuse.J.CrewandNewBalanceareamongthebrandsthathaveutilizedthe“poll”StickerfeatureonInstagramtocollectcustomerfeedback,saidMarneLevine,Instagram’sCOO.

5)Ine-commerce,internationalretailersaregainingadvantagesintermsofcustomerexperienceratherthanprice.SpeakersfromViaVarejo,Brazil’slargestnonfoodretailer,andItalianapparelretailerCalzedoniaGroupsharedtheire-commercepriorities.Bothcompaniesareseekingtoofferbettercustomerexperiencesthroughimprovedclick-and-collectfeatures,deliverbetterpersonalizedmarketingmessagestomultichannelshoppersandreducedeliverytimeforcustomers.Calzedoniaisalreadyabletooffertwo-daydeliveryinsomekeyEuropeanmarkets.MatteoMolon,Calzedonia’sHeadofE-CommerceandCRM,stressedthatthecompany’sgoalistocompeteonservices,notprice,ine-commerce.

LookforourcontinuedcoverageofNRF2018Retail’sBigShowthisweek.

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January15,2018

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018TheFungGroup.Allrightsreserved.

DeborahWeinswig,CPAManagingDirectorFGRTNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comJohnHarmonSeniorAnalystJingWangResearchAssociateHongKong:2ndFloor,HongKongSpinnersIndustrialBuildingPhase1&2800CheungShaWanRoad,KowloonHongKongTel:85223004406London:242–246MaryleboneRoadLondon,NW16JQUnitedKingdomNewYork:1359Broadway,18thFloorNewYork,NY10018Tel:6468397017

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