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Continuing our coverage of NRF 2020, we look at the industry trends that emerged and how they apply to the European market.
We’re continuing our rundown of NRF 2020 with trend and innovation reports that we saw come out of the National Retail Federation's Big Show. We discussed how the trends applied to the North American market, but what about the international market?
Not only was NRF the place to be for retailers and tech companies, it also offered up trends and topics applicable to companies all over the world. How the individual geographies will deal with these trends remains to be seen (and will surely happen at a localized level) but overall the direction of global retail is clear for the next year.
The importance of data
Data was one of the most talked about things at NRF, with the keynote speech from Satya Nadella, the CEO of Microsoft, emphasizing that data will transform the face of retail and business models as we know it.
For the European market, this trend was met with excitement and trepidation in equal parts. The European Union has become much more strict on privacy, enacting GDPR, or the General Data Protection Regulation, in 2018 and fully changed how businesses within the European Union dealt with user data.
“The E.U. privacy framework was developed to ensure that data collected about individuals would be controlled by those individuals. Under E.U. law, individuals can access collected data, correct what they believe to be inaccuracies and — perhaps most notably — demand that data be stricken from a record. The last is the so-called ‘right to be forgotten.’”
Since GDPR has been enacted, it has challenged many businesses who are trying to leverage consumer data. These businesses now have to look at how to benefit from the insights they capture while ensuring that consumer confidence stays high while being compliant with GDPR.
Even so, with the expanded usage of data being one of the major trends to come out of NRF, those organizations who figure out compliance sooner rather than later will have a leg up on their competition, be it local or international. Some companies have begun this journey to try to understand demographics and footfall data in-store by implementing alternative methods, like investing in ground-level cameras that track foot traffic, direction, and even footwear without tracking the individual.
The rise of omnichannel
Omnichannel adoption presents a unique challenge for many businesses, but even more so for European retailers due to the spread of cultural norms surrounding shopping within the European Union.
Erik #Nordstrom at @NRFnews #NRF2020 #Retail's Big Show: "Half of the stores sales of @Nordstrom involve an online journey somewhere. We should not distinguish between online and offline. It's all about a seamless #shopping experience for the consumer". #ecommerce #omnichannel pic.twitter.com/1dHwIa2Sj9— Ecommerce Europe (@Ecommerce_EU) January 14, 2020
Across the EU (Western to Central to Eastern Europe), there is still a large discrepancy in business models that have been successful. While Western Europe has largely adopted modern retail formats, fragmented business models that meld traditional with modern are still prevalent across Central and Eastern Europe.
This provides an additional challenge for European retailers as they must ensure localization for success, especially for those that span across several countries within the EU. There is no standard method of success for omnichannel in Europe, so intimate knowledge of the consumer and their needs across geographies is key.
Change in customer values
“The big change is not tech changing but us,” said Per Krokstade, head of Innovation & Strategic Partnerships at Ikea. Understanding that the consumer now demands more from the brands they are loyal to needs to be met.
Sustained recession circumstances in many countries has given rise to a trend of more conscious consumers who want to see their euros stretch further. They are a value-oriented market, but without sacrificing quality for the sake of budget.
However, some cultures prioritize physical stores more due to inherent cultural values. This will facilitate the need for trade-offs within geographic segments for European retailers. Some markets may succeed more than others due to the cultural style, which also makes it difficult to roll out one broad stroke strategy to increase sales.
Personalization and shopper-tainment
One area to potentially address the cultural difference is personalization in order to best meet varying customer needs. There has been a similar transition in Europe as in North America - people go to the malls to socialize and experience, not just to shop.
Many EU-equivalent REITs have invested in this by adding entertainment and recreational aspects to their portfolio, effectively turning their single-use assets into mixed-use properties to keep up with consumer demands.
While several companies across Europe have become known as benchmarkers for their digital strategy (UK supermarket brand Tesco, for example), the European market as a whole has yet to fully realize digital adoption and technology stacks to help improve their businesses, in direct opposition to their consumers, who are adopting e-commerce at a rate consistent with North America and Asia.
#FIRA Session at #NRF2020 Big Show: interesting to hear about the Digital Transformation of #Carrefour i.e. voice-activated shopping actions soon available in partnership with #Google. #omnichannel #ecommerce pic.twitter.com/65urIIUWIN— Ecommerce Europe (@Ecommerce_EU) January 15, 2020
This discrepancy will continue to hurt European brands if they do not innovate. NRF saw many keynotes and brands alike urge each other to take advantage of the innovations they saw at the show to help them get a competitive advantage and further reach their customers who are outpacing their favourite brands with their demand for convenience and digital additions to the experience.
NRF allowed companies from all over the globe to network, showcase innovations and increase the visibility to organizations who might not come across each other due to their geography. On top of that, it is the yearly hub for the retail industry to come together. We enjoyed meeting brands from all over North America and Europe (and the rest of the world, natch!) and will be keeping an eye on these trends in the year to come.