After two turbulent years and a pandemic-induced hiatus, the NRF was back in person this year, drawing huge crowds to the Javits Center and hosting inspired conversations about some of the biggest challenges—and opportunities—retailers face in the coming year.
For retailers, 2022 poses a unique set of challenges. As the pandemic continues, businesses must continue to navigate supply chain shortages, rising interest rates, and a customer base that has flocked to digital purchasing experience while accommodating customers who want to get back to brick-and-mortar shopping.
Target CEO Brian Cornell reminded a packed keynote audience that adaptability will be the key differentiator of successful businesses in this ever-shifting market landscape. “Each day, we’re going to have to listen to consumers,” he said. “Listen, learn, adapt, and be flexible.”
Here are three things we learned at NRF 2022 about adapting and thriving in an unpredictable marketplace.
Investing in Sustainability for Business and Planet
As climate change worsens, businesses are putting more of their own resources into ensuring that they use fewer of the world’s. Sustainability has become a top-line concern for customers, with 72% saying they believe climate change is an emergency. These customers are using their dollars to make change, with 55% reporting that they’d purchased a sustainable product or service within the last months and 30% saying they’d paid more for a product that reflected their environmental values.
In an inspiring keynote, IKEA US CEO and chief sustainability officer Javier Quinones urged companies to take action toward creating a better world. More and more, companies realize that sustainability is the right thing to do—for the planet and their bottom lines. IKEA—a longtime leader in the corporate sustainability sphere—has doubled down on its commitments recently, committing to creating a circular product line by the year 2030. In addition, IKEA has electrified its vehicle fleet, invested in company-owned wind and solar farms, and prioritized sustainable forestry in its product line. They’ve also pushed to make sustainability affordable for the average customer, investing in targeted areas—most recently, LED lights—using their purchasing and manufacturing power to help drive down price tags for their consumers.
Albertson’s has also made a name for itself in the sustainability sphere, using AI to make sure its inventory is fresh and reduce shrink—a move that has cut down on food waste while winning them a committed customer base.
Rising to the sustainability challenge will require work and innovation. But Quinones says the most important thing is taking the first step—and continuing to walk the walk. “Start with movement,” he said. “Getting paralyzed is not an option.”
Get Active in the Metaverse
The early pandemic saw a spike in online shopping, as homebound consumers looked to meet their basic needs in safer, more convenient ways. But in 2022, digital shopping has become less of a perk and more of a feature, with 66% of consumers preferring to “engage with brands digitally” and 85% saying that “digital presence will be essential for a brand to be successful in the future.” Across the board, consumers are not just wanting a digital shopping experience—they’re expecting it.
But shopping preferences have changed in even more fundamental ways, with a growing marketplace that goes beyond the promise of the merely digital and into the virtual. With the rise of platforms like Roblox—where users spend real money on virtual clothing, accessories, and home goods for its customers, and where a virtual Gucci bag recently went for $4,000—shopping has become less about owning something and more about experiences.
In her session on the market opportunity of the metaverse, Emma Chiu, global director at Wunderman Thompson Intelligence, stressed that Gen Z consumers aren’t interested in the usual big-ticket purchases like houses or cars. Instead, they want interactions—social experiences. In this moment of NOwnership, brands should focus on differentiating themselves by offering what Meagan Loyst, an investor at venture capital firm Lerer Hippeau and founder of the group Gen Z VCs, calls “cultural moments” — opportunities for users to engage with brands and each other outside traditional brick-and-mortar or digital venues.
Refine the Supply Chain
As 2022 commences, retailers are still rattled by supply chain shortages, glitches, and redundancies—and it’s not going to let up anytime soon. In the meantime, suppliers and retailers are getting creative, harnessing the power of technology to stay ahead of the changes and make the best decisions inside the chaos.
The supply chain infrastructure will have to undergo a significant makeover in the long term. In the meantime, Target CEO Brian Cornell stressed fighting existing problems with the best information available. “In the short term,” Cornell said, “the best thing we can do is share data.”
One of the biggest problems retailers are facing right now is very basic. While demand grows for e-commerce experiences, Hilding Anderson, head of retail strategy for North America at digital consultancy Publicis Sapient, says that most e-commerce retailers aren’t making any money. While they wait for the supply chain to get sorted out, one of the best things businesses can do is invest in AI-powered tools to manage their inventory and fulfillment in smarter, more efficient ways. With more data at their fingertips, retailers can better decide how much inventory to order and ship the right amount of product from the most convenient location.
When it comes to the modern marketplace, data is power—and the companies with the most data will have the clarity to make the best decisions.
Making 2022 Count
The marketplace will undoubtedly continue to surprise us this year, but some things won’t. It will continue to matter how we treat our customers, our employees, and the planet—and companies who recognize this will see success on every level. Staying nimble matters, too, as we continue to learn lessons from the last two years and adapt them into an increasingly digital, increasingly interconnected economy and world.