Thoughts from NRF 2020
SCDigest was at the National Retail Federation's "Big Show" at the Javits Center in Manhattan the second week of January.
Below are some of SCDigest Editor Dan Gilmore's thoughts on the event:
It is the best of times and the worst of times for retailers, Gilmore observed. "Worst" given the continued record numbers of store closures, pressure from ecommerce generally and Amazon specifically, and changing consumer behavior – "date night at the mall is rapidly losing favor," Gilmore noted.
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| Do these new and ever more dynamic times demand even higher (and frankly more impactful) collaboration? |
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"Best of times" because overall retail sales numbers are strong, chains such as Walmart and Target are centering overall strategies around physical stores, and there is exciting innovation in technology and services available to apply to this retail brave new world: robots, drones, mobile apps, blockchain, vision systems, last mile delivery service innovation, and more. Similar intriguing new technology is here to take in-store operations to very new places.
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A representative at Intel's NFR show booth made an interesting comment: there are two paths to success in the new retail, she said Intel believes: hyper efficiency or rich customer experience.
The former can be embodied in the coming move at many retailers towards "grab and go" type environments, pioneered or at least popularized by Amazon's Go store format. There were several vendors at the show offering technology to support grab and go.
On the experience side, there are all kinds of technologies, which Gilmore characterize as either being "wow" type factors (think cool product holograms, as one example) or much more rich and dynamic personalization (e.g., a display that makes cosmetic recommendations based on your skin tone).
 There are other interesting dynamics. Take Nike's news in the past year that it was going to cut back dramatically on the number of retail outlets it sells through (to less than three dozen worldwide), while it significantly ramps up its direct to consumer business - the type of move not considered by most consumer products companies until recently given concern about retailer reaction. That barrier is now close to gone.
On the other side, retailer private label activity continues apace, with chains such as Kroger and Costco, to cite a couple of examples, investing heavily in their store brands.
While this has not much really to do with NRF, it did lead Gilmore to wonder about the future of retailer and vendor collaboration, now more than 20 years after the launch of Collaborative Planning, Forecasting, and Replenishment (CPFR) in the late 1990s.
Do these new and ever more dynamic times demand even higher (and frankly more impactful) collaboration? Or it is every retail and manufacturer/brand company for themselves?
"The answer to that certainly wasn't at NRF 2020, but I will put some thoughts together on that soon," Gilmore says.
Gartner, however, is very bullish on retailer-vendor collaboration right now (see Gartner on Retailer-Vendor Supply Chain Collaboration Part 2.)
Vendor Compliance Branching Out Beyond Soft Goods Retail
Traverse Systems executive Richard Wilhjelm sat down for a short vide interview with SCDigest editor Dan Gilmore to discuss trends in vendor compliance and performance management.
Those trends include the increasing focus in the past couple of years by leading retailers on driving improved "on-time and in-full" (OTIF) performance by vendors, looking to both keep inventories down by reducing variability but also to increase sales by avoiding out-of-stocks.
Wilhjelm also said Traverse Systems is seeing increased interest in vendor compliance programs and technology support outside of the apparel sector, which has for many years been the dominant area for compliance tools.
The grocery sector is one such sector, Wilhjelm noted. While grocery is obviously a type of retailer, until recently it had little interest in vendor compliance. That is starting to change, due in part to ecommerce, and also a focus by many grocers in reducing supply chain variability.
Traverse Systems is also seeing strong vendor compliance interest from pure play "etailers," especially as successful ones pivot a bit from a growth focus to efforts to improve profitability.
Finally, there is also growing compliance program interest from many wholesale distributors, Wilhjelm said.
He noted many wholesalers have more vendors and more SKUs than even some large retailers, providing a rich opportunity.
"Many wholesalers have initiatives to reduce inventory and shorten the PO lifecycle," Wilhjelm said, noting these are benefits vendor compliance has proven to be able to deliver.
You can view the full video interview here.
Amazon Cited out for Anticompetitive Behavior
More than 80 firms were asked by Congress in September to provide examples of anticompetitive behavior by Amazon.com, Apple, Facebook and Google. In late January, four companies appeared before the US House Judiciary Committee's antitrust subcommittee in Colorado to provide further evidence.
That included PopSockets, a seller of collapsible phone grips, which testified against Amazon. The company, which sold items on Amazon's marketplace and then directly to the e-tail giant, ended its relationship after two years.
CEO David Barnett said Amazon "frequently lowered their selling price of our product and then expected and needed us to help pay for the lost margin." He added, "On multiple occasions we found that Amazon Retail was itself sourcing counterfeit PopGrips and selling them alongside our authentic products."
Amazon spokesman Jack Evans told Reuters that PopSockets was free to choose which retailers it supplies and could choose to stop selling via Amazon. Third party sellers continue to sell the product on the platform.
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