New York is a playground for innovative retailers, with emerging trends such as NFTs, recommerce, community building and personalisation… but also a focus on profitability. We look back at the world’s biggest retail event and tip noteworthy store concepts.
Evolutions, not revolutions
NRF Retail’s Big Show in New York, the annual appointment for retailers from around the world, has just finished. What trends are emerging and what can European retailers learn from the New York retail scene? We look back with Nino Bergfeld, retail consultant at Salesforce, and asked what are his key takeaways after four days in New York?
“It had been three years since I visited stores in New York and frankly, I did not have the impression that much had changed. We did not see any ‘killer innovations’, but there were improvements that optimise the customer journey. Retailers are getting better with omnichannel processes: integrating the physical shop with e-commerce platforms, delivery from the shop, picking up orders in shop… These are evolutions, not revolutions. At Amazon‘s Whole Foods Market, we saw a new payment method: paying with your palm, which is linked to your credit card.”
NFTs lure young customers
“You do notice that New York is something of a ‘bubble’ that companies see as a prime playground for testing innovations, even if not every innovation is successful. Will NFTs (non-fungible tokens, or unique digital files, editor) become successful? Nobody knows, but they are trying and that is interesting to see. For example, it could be a way to increase consumer engagement. We visited luxury footwear brand Salvatore Ferragamo‘s new shop in SoHo. They have an NFT builder in the store, somewhat similar to a photo booth: you take a picture and receive your individualised NFT in your crypto wallet. This is how Ferragamo wants to reach new, younger audiences.”
Sustainability is also a recurring theme at many retailers. But how do you translate that to the shop floor? At trainer brand Golden Goose, they have an in-store ‘repair shop’: customers can have old trainers cleaned, refurbished and personalised there – including shoes from other brands. The shop as a sustainability hub, in other words.
Shop as meeting place
The essence is this: in times of digitisation, the physical shop has to find a different interpretation. It is often easier to buy online: you have more choice and convenience there. Retailers need to offer something you cannot find online. Community building will be one of these new roles for physical shops: in New York, retailers are ahead of their European counterparts in this respect, Bergfeld notes.
“A great example is the Reddy by PetCo shop in SoHo: it caters specifically to dog owners and lovers. The pet food manufacturer uses the shop not only as a transactional outlet, but also as a place where dog lovers can meet. You can hold birthday parties for your dog there – for free, even. You notice that the shop employees know the name of every dog that comes in. They invest in the relationship, in close ties with their customers and between dog owners themselves. So they use the shop to create unique experiences that you can not get online.”
Focus on retention
At the NRF trade fair, Bergfeld saw that retailers are now strongly focusing on efficiency in every aspect of the business. “In e-commerce, for example, you see more retailers considering charging for shipping or returns to become profitable online. They are steering consumers towards business- and margin-friendly behaviour: for example, by linking a loyalty programme with returns. You can reward consumers when they return the product in shop instead of sending it in. That is also more sustainable.”
Bergfeld also observes that many companies are making the turn from customer acquisition to more focus on retention. They start using data for activation and to advertise smarter and more targeted. “If a customer is not happy, why spend a euro to retarget them when they might not convert? You do not want to spend money on someone who has just bought or returned something, do you? Personalisation works: an anonymous shipping notification is not a great experience. If you personalise that, with detailed updates, you can improve customer loyalty.”
Especially in the fashion sector, retailers talk a lot about sustainability and recommerce or second-hand. Those ‘reverse logistics’ present a big challenge; it is a different business model than just buying and selling. “You want to make this meaningful and seamless, but also guard credibility: no ‘greenwashing’ but really think about recycling, repairing and reselling on your own platform. That way you keep the whole ecosystem in your own hands – otherwise you just lose it to Vinted anyway. Zalando has been doing it, Patagonia too for quite some time.”
Salesforce itself was able to announce a partnership with Walmart at the NRF event: together, the two companies will optimise the omnichannel approach at the US market leader, with seamless solutions for click&collect and local delivery from shops. The IT company also presented new tools to personalise the shopping experience and deploy retail media in a more targeted way based on customer data.