NRF NXT 2020 – the retail consumer is bucking trends and creating new ones. Retailers need new metrics – again.

NRF NXT 2020 – the retail consumer is bucking trends and creating new ones. Retailers need new metrics – again.
Jon Reed
Wed, 07/22/2020 – 00:58

Remember when I said we need new retail metrics? Well, toss those – now we need a pandemic-tested edition. NRF NXT 2020 brought these issues into focus – here’s my top five takeaways.

NRF NXT - GfK Consumer Life

(NRF NXT – GfK Consumer Life presentation)

It was only a year ago I was calling for new metrics in retail: NRF to retailers, and Wall Street – we need better metrics to assess retail health. Well, forget about those new metrics. Now we need even newer metrics, of the pandemic economy variety.

That’s not entirely true – the modern metrics cited last year, e.g. “Customer Lifetime Value,” are still an important contrast with attempts to measure, say, traffic-per-square-foot. How’s that metric going lately?

We need pandemic economy retail metrics

So what’s an example of a pandemic economy retail metric? That’s what retailers are pushing to figure out – one example could be: tracking the percentage of customers who could not have an order fulfilled on time due to inventory shortage. And yes, BOPIS is an obvious push (Buy Online, Pick Up In Store) – but what about a metric to track the percentage of customers who not only try BOPIS, but become repeat users?

And with these digital options, is there a way to incent store employees who go above and beyond to ensure the “last mile” of a digital order goes smoothly? Waiting thirty minutes in a parking lot for your pickup order is BOPIS-gone-wrong.

These potent topics took center stage at NRF’s three day NXT Retail e-commerce and digital marketing event, which finishes today. Like most virtual events of 2020, there were high points and slog points. Some of the sessions I attended veered too far into the “Here’s a retail expert to tell you all about AI” vibe, rather than opening up a dialogue with attendees on the real-world challenges. But overall there was meat on the bone.

My perception is that retail attendees are eager to move beyond the pandemic obvious, e.g. “If you don’t have an omni-strategy, you’re screwed,” and “Consumers are focused on essentials; fashion and luxury brands are struggling.”

I’m also not very interested in futuristic polls about whether consumers will continue to use BOPIS if their perception of store safety ever gets back to pre-pandemic levels. Who the heck knows? Consumers might tell you one thing; all we know for certain is their behavior in the current abnormal. Entering NRF NXT, my questions were:

  • How has the digital push changed consumer habits, given retail supply chains are still disrupted? Any surprises or sharp insights here?
  • What are retailers doing to adapt? What are creative ways to win loyalty with consumers who have a new list of safety expectations?
  • What is a smart action plan for retailers going forward?

In no particular order, here’s some tips and takeaways from NRF NXT:

1. Disrupted shopping routines create brand loyalty opportunities – several presentations noted that supply chain disruptions give brands a fresh chance. A Forrester presentation discussed how Amazon’s on-time delivery struggles, even with Prime, create openings for brands to push their own delivery scenarios (Forrester put their slides on the ultimate copyright lockdown, so I won’t share more on their views).

In a standout presentation from GfK, “The COVID-19 Curveball: How an unparalleled crisis changed the trajectory of major consumer trends – and what that means for retailers,” GfK’s Joe Beier and Rachel Bonsignore pointed to a similar opportunity, the so-called accidental trial:

Shopping routines disrupted - from GfK Consumer Life

(Shopping routines disrupted – from GfK Consumer Life)


When you’re compelled to buy brands you wouldn’t normally buy, a long-term habit could change. 27 percent of consumers surveyed by GfK indicated this brand switch would continue after the crisis. As Beier put it:

We expect this is going to have a pretty interesting effect on future brand loyalties and buying patterns across competitive brands. And really mixing a lot of that up, because there’s a lot of folks that have now been exposed to things that they never would have been, absent the crisis.

2. Safety ranks higher than digital. Shoppers might want a slick app and pick up options and fast delivery, but there’s other things they rank higher. Via GfK Consumer Life:

Offline shopper priorities - from GfK Consumer Life

(Offline shopper priorities – from GfK Consumer Life)

Beier added:

This has, in some ways, been kind of a shining moment for some retailers who have been able to stay open, but also innovate and pivot quickly to new ways of operating that have been more appropriate to the crisis and have helped to soothe concerns of their customer base.

You see just some of those examples here in terms of delivery, special handling of the pizza portal, all of which are designed to minimize face-to-face human contact, which is, of course, the big boogeyman in the whole crisis… Consumers are watching retailers and brands at extremely high levels of scrutiny.

3. Do we need to incentivize store employees differently? As retailers adjust to a fluid move between store and online activity, do store employees need to be compensated differently? That’s a topic retailers are just beginning to grapple with. At NRF NXT, I heard a range of ideas about this. Forrester Research noted that the biggest progress retailers have made is crediting local stores for fulfilling online sales. Whereas under twenty percent of the retailers they recently surveyed were offering any type of incentive to store employees for handling omni-sales for customers.

Example: a “save the sale” scenario where a savvy store associate helps a customer order an online product that is out of stock on the shelves. Or, giving a store employee an incentive for picking-and-packing on online order for in-store pickup. I’m especially interested in the incentives for employees that are interacting with customers in new ways. Example: I had an in-store pickup where the store employee was ill-equipped to replace an item over the phone. Instead he denied the swap I wanted to make – missing an upsell opportunity.

4. New retail metrics must take into account the opportunities – and costs – of the pandemic economy. Retailers have adapted – now they need smart ways to measure their goals against today’s normal. Example: an increase in BOPIS sounds desirable, but shoppers that don’t go in stores don’t spend as much money. Should upselling via the app be a key metric/priority instead?

And, while creating a fluid online/in-store experience is non-negotiable, as per a Forrester Research survey, 58 percent of retailers that invested in an omni-fulfillment program were spending more money on store labor. Another unpleasant but necessary metric could be abandonment rates for pickups (e.g. “How can we reduce the number of BOPIS orders that are never picked up?”)

5. Now is the time to invest in digital/process improvements. It’s an awkward time to tell retailers to keep spending, but – if a legacy system or process stands in the way. One point I heard a few different times is that we need to shift that CX conversation away from delighting customers. Delighting customers comes later. Right now, fixing the weak links in the so-called “experience” is what matters. Especially given the drastic changes some retailers have had to make with online and call center support.

Recently, CVS squandered most of the loyalty track record it had built up with me, via a bunch of spammy calls and texts I couldn’t opt-out of. One brand’s screw up is another brand’s opportunity. My favorite coffee shop isn’t open. My third favorite, however, integrated online ordering with an outdoor pickup window. Suddenly it jumps from third best to top choice.

My take

It seems like just yesterday I was braving the January New York City streets for NRF 2020. The retail economy has changed drastically since then; NRF NXT was a helpful step towards rebooting these conversations. There was a nice mix of retail practitioners and industry experts. As is almost always the case during this inaugural virtual event season, the interactivity was lacking.

NRF needs to look at a platform that allows video networking rather than aimless group text chats. One painful-but-useful chat with “radical customer service” vendor Gladly took two hours, because neither one of us was getting notifications when we replied to the other. That’s just not good enough for a major online event. That said, the timing of this event was good. Many retailers are struggling, but there is a clearer sense of the adversity ahead, and the opportunities that can be seized. We’re making progress with the data piece of this also. “How do I measure/analyze this project” is perhaps just as important as the project itself now.

Image credit – All screen shots by Jon Reed during NRF NXT 2020.

Disclosure – NRF NXT was a free event for all registered participants.

Source link