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Five takeaways from Retail’s Big Show – Chapter 1

Kyle Hall — Wed, 27 Jan 2021 05:15:25 +0000

The National Retail Federation has just concluded the first instalment of Retail’s Big Show for 2021, and this year the event looked very different to years gone by.

Held virtually, the show was divided into two ‘chapters’, with the first held in January and the second to commence in June.

Despite its online venue, the event packed all the punch of previous years with a specific focus on the immediate needs facing retailers today and featured curated sessions, networking programmes and a virtual expo.

With its focus on moving forward together as an industry, here are five takeaways from Chapter 1 of Retail’s Big Show.

The future pulled forward

In a session on ‘Technologies Shaping the Store of 2025’, panellists noted the pandemic had “pulled the future forward”, accelerating adoption of e-commerce.

However, consumers still want curation, personal guidance and authentic connection, regardless of how they shop.

“In the world of commerce, the things we thought we would see in 2030 are now things that we’re seeing today,” Shopify director of product, retail, Arpan Podduturi, explained.

Meanwhile, head of global retail operations at Allbirds, Travis Boyce, noted the role of bricks and mortar was transforming into a hub where shoppers could fulfil needs like buying online and returning in store or engage in events as retail and communities begin to open back up.

It’s all about the show

Photo by: PR Newswire

Luxury retailer Saks Fifth Avenue was among the stores represented in a chat focused on re-imagining retail, with CEO Marc Metrick also agreeing the events of2020 had provided an accelerant for change.

However, he also added that in the case of luxury bricks and mortar retail physical stores continue to be important.

“For luxury, especially, it’s the theatre: People want to see the show,” he said, and since Saks reopened its stores, they have been performing only slightly below 2019 levels.

Better catering to the product cycle

Another thing Saks observed in 2020 was that in the future they could better cater to the product cycle.

For example, their seasonal ranges usually arrive almost six months prior to the season beginning and then the shop needs to push the product. In 2020, stores were closed in the early half of the year and then reopened in May.

“When the customers arrived, guess what was in the stores? Summer product,” Mr Metrick said.

“It had been on the floors since February, but this was the first time they’d seen it. We didn’t have to push it or promote it. It just sold, because we were meeting the customer’s needs.”

The significance of sustainability

A session involving IKEA and H&M representatives looked at whether sustainable purchasing habits changed as a result of 2020.

After years of an increasing shift to more socially and environmentally aware purchasing, the customer’s commitment to ethical retailing was not impacted by COVID-19, both retailers noted.

However, their budget tended to be smaller and the product focus changed to align with the new normal. They also explained that Gen-Z continued to lead the socially conscious push and had a huge demand for information about products.

“Having grown up as digital natives they understand — maybe better than any preceding generation — how to access information,” H&M US sustainability manager Abigail Kammerzell noted.

“And they’re really demanding about it. They want to know where our clothing is made and out of what, what the social implications of that are, and what’s the responsibility of the consumer once they’re done with it.

“On top of that, Gen Z has definite expectations about what a business is: It’s not just here to provide an item, it’s also here to improve the society and community in which it operates.”

All round excellence

It’s not enough for a retailer to excel in one area, they need to be excellent all-rounders. That was the message from Wayfair CEO Niraj Shah, who noted what “you’re not good at limits your growth and being great in other areas doesn’t make up for it”.

As an online retailer focussed on furniture, Mr Shah explained for his company that involved a focus on both merchandising and logistics.

But most importantly it involved intimately understanding exactly what a customer needs, and then drawing on tools like technology to meet those requirements.

Lowe’s CEO Marvin Ellison agreed, explaining the true role of technology was to deliver a better customer experience.

“As we look to the future, we ask one single question: What is in the best interest of our customers?

“The most effective technology is a technology that no one sees. All the customer knows is that the transaction was easy. All the associates and supply people know is that the system works well.

“And that,” Mr Ellison said, “is what good innovation looks like.”

The first chapter of Retail’s Big Show ran over various dates from January 12 while the second chapter will commence in June. Further information about the event is available at the National Retail Federation.

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No slowdown in Organized Retail Crime

Kyle Hall — Wed, 13 Jan 2021 23:16:24 +0000

Organized Retail Crime (ORC) continues to be a major problem for the retail sector, with the latest survey from the National Retail Federation finding losses increased in 2020 and perpetrator aggression was also higher than the year prior.

Released in mid-December, the Organized Retail Crime Survey 2020 found Organized Retail Crime cost retailers an average of $719,548 per $1 billion in sales, which was up from $703,320 in 2019. Meanwhile, many retailers have changed or are looking to change their store policies as a result.

Here’s an insight into what the annual ORC survey revealed.

Organized Retail Crime continuing to rise

Last year marked the fifth consecutive year that retailers reported Organized Retail Crime had topped $700,000 per billion in sales.

In 2020, they noted the figure was on average $719,548, which was an increase of over $16 million in 2019 and significantly greater than in 2015 when the figure was just $453,940.

In fact, three in four retailers said ORC had increased in the past year with almost a third noting that increase was significant, and many attributed the rise to changes in legislation that raised the threshold of what constitutes a felony.

Retail response

In response to the increased threat, the report most retailers were turning their attention to theft prevention.

In the past 12 months:

33 per cent of retailers surveyed had changed their return policy, while 19 per cent intended to

29 per cent had changed their Point of Sale policy, while 16 per cent intended to

20 per cent had altered their trespass policy, while 7 per cent intended to

14 per cent had changed their employee screening policy, while 14 per cent intended to

Meanwhile, 61 per cent of retailers noted their company was now prioritising Organized Retail Crime more than they did five years ago, 52 per cent said their company was allocating additional technology resources to address risk, and 36 per cent said their company was increasing its annual loss prevention budget.

More aggression

The majority of retailers also reported Organized Retail Crime involved more violence in 2020 than it did in 2019.

Almost a third of respondents (31 per cent) said perpetrators were much more aggressive, 26 per cent said they were somewhat more aggressive, 41 per cent reported the aggression was the same as the year prior and just two per cent said perpetrators were less aggressive.

Top items stolen

When it came to the products commonly targeted by perpetrators of retail crime, the report found designer clothes well and truly topped the list, accounting for 34 per cent of thefts.

Designer clothes were followed by:

Laundry detergent (21 per cent)
Designer handbags (16 per cent)
Deodorant (15 per cent)
Laptops/tablets (13 per cent)
High-end liquor (13 per cent)
Allergy medication (13 per cent)
Pain relievers (13 per cent)
Infant formula (13 per cent)
Denim pants (11 per cent)
Cigarettes (10 per cent)
Contraceptives (10 per cent)
Teeth whitening strips (10 per cent)
Cell phones (8 per cent)
Energy drinks (7 per cent)
High-end vacuums (5 per cent)
High-end appliances (5 per cent)

Should these items then be located or recovered, they were most likely found on other websites (59 per cent), in pawnshops (20 per cent), in check cashing stores (6 per cent), or at other venues (9 per cent).

About the survey

The NRF Organized Retail Crime Survey 2020 involved 61 anonymous retailers and was conducted between February and April 2020. Survey authors note it took place during the Covid-19 shutdowns and may reflect that uncertainty.

The full NRF report is available here, while retailers can gain further insight into strategies to mitigate ORC here.

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Top takeaways from NRF Protect

Kyle Hall — Mon, 17 Jun 2019 06:23:51 +0000

The National Retail Federation’s annual loss protection conference has concluded in California, with over 2500 visitors and retail representatives attending NRF Protect from June 11-13.

Considered one of the biggest events on the annual loss prevention calendar, this year’s conference looked at the most recent loss statistics along with a focus on Organized Retail Crime and an increased emphasis on cybersecurity.

Here are some of the key takeaways from the 2019 event…

Latest retail theft figures

Professor Robert Hanson of Northern Michigan University, and Asset Protection & Safety VP Dan Faketty of Southeastern Grocers took a walk through the latest National Retail Security Survey findings, noting the 28th annual survey revealed retail loss in the US now totalled 1.38 per cent of sales or $50.6 billion.

Within those figures there were “new threats and emerging areas of concern”, the pair reflected.

These included:

Identifying the cause of shrink

Combatting internal theft through mobile POS fraud

Combatting external theft through mobile POS fraud

Understanding the technology criminals use

In terms of employee theft, they explained the average dollar loss per incident had remained stead for the past four years, equating to $1264 in 2018.

Meanwhile, each shoplifting incident resulted in an average loss of $546.67.

When it came to robberies, the average loss per incident was $2885.15, which was a 65 per cent decline on 2015.

You can read more about the full findings of this report here.

Organized retail crime

In a panel discussion featuring security specialists and law enforcement professionals, attention turned to Organized Retail Crime (ORC).

They noted three in four retailers had seen a rise in ORC in the past year, with more than one third of those who had seen an increase noting it was significant. Almost half of retailers experiencing ORC also said they believed gangs were exhibiting more aggression.

The cybersecurity issue

Cybersecurity expert and CEO of LMG Security and BrightWise Training, Sherri Davidoff, explained the changing landscape of cyber threats and the risk it posed to retailers.

She noted a lack of security allowed customers and vendors to fall victim to hacking, resulting in retailers losing both money and their reputation.

In a bid to thwart hacking, retailers should ensure they have:

Phishing protection, including user training and technical controls

Strong authentication, including two-factor authentication and long passwords

Patch management

Proactive threat hunting

Outreach and education

Insider risk

Gap Inc Director Nathan Niese, and Petco Loss Prevention Manager Tina Ayo looked at insider risk in the digital age, noting there were three potential types of threats when it came to cybersecurity and the enemy within:

The negligent employee

The exploited employee

The malicious insider

Privilege, misuse and error by insiders account for 30 per cent of breaches, they explained. Combatting the problem came down to creating both a “physical firewall” and technology to protect against threat.

In terms of a physical firewall, retailers should look at:

Risk and compliance

Leveraged resources

Monitoring, incident response and reporting

Training education and awareness

Package theft and pickup fraud

In a rising era of internet shopping and home delivery, attention also turned to the growing incidents of package theft.

Bust Buy representatives Lisa Brock and Jim Behrend explained 30 per cent of Americans had experienced package theft, with the average value per item equaling $140.

They reflected the issue presented a unique challenge but ways of reducing the problem included documentation, and new technology.

Meanwhile, combating pickup fraud involved identity authentication at the time of sale and pickup, with new technologies allowing new identification methods.

In terms of shipping from store, the biggest challenge was issues like label fraud and theft, they reflected. And here, auditing, restricted access to the warehouse, strategic store set-up and reporting could all play a role in reducing loss.

Identify gaps in your processes and policies, they urged retailers. Also align all channels, including eCommerce, customer care, retail, supply channel, legal and real estate, while focusing on reporting.

The self-checkout

Technology offers the potential to save in labor costs, and one such innovation is the self-checkout, loss prevention researched Mike Giblin, and loss prevention professional Laura Lasko noted in their presentation.

First introduced in 1992, the self-checkout is now present in 59 per cent of stores. But it also poses a risk for retail shrink, accounting for approximately 21.7 per cent of loss.

Addressing the problem involved using attentive self-checkout attendants to oversee the area, they stated. These attendants should be trained in all areas of self-checkout misuse including failing to scan items, improper weighing, and incomplete payments.

“Enough self-checkout attendants should be scheduled to help monitor the area during busier hours. Attendants should avoid standing at the podium and regularly interact with customers,” they said.

Meanwhile, reporting also played a critical role in self-checkout loss.

NRF Protect is held annually and features a focus on cyber and digital crime, risk management, talent and culture, theft and fraud, and workplace violence.

Photo Source: NRF Protect 2019

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Organized Retail Crime on the NRF Protect agenda

Kyle Hall — Thu, 23 May 2019 04:19:28 +0000

With Organized Retail Crime (ORC) at an all-time high, the National Retail Federation is set to discuss the issue in depth at their NRF Protect conference, in June this year.

Hosted in Anaheim, California, the conference will shine a spotlight on all areas of retail loss prevention and asset protection, with a focus on cyber and digital crime, risk management, talent and culture, theft and fraud, and workplace violence.

The event is one of the biggest on the annual US loss prevention calendar, featuring 90 speakers on the agenda, with over 2500 visitors attending the three-day event.

And with ORC now costing retailers $777,877 per $1 billion in sales , this year’s event will also see a panel of experts discussing the impacts and best strategies to prevent Organized Retail Crime.

The ORC threat

In November last year the National Retail Federation released their annual report on Organized Retail Crime. They noted nearly three in four US retailers had seen an increase in ORC in the past year, and for over a third of survey participants that increase was “significant”.

Defined by the NRF as “the large-scale theft of retail merchandise with the intent to resell the merchandise for financial gain”, ORC contributes to the growing impact of shoplifting, which US retailers note is their top source of inventory shrink. In total shoplifting accounts for 35.7 per cent of retail loss.

The survey found ORC losses over the past year had risen seven per cent on 2017 to equal $777,877 per $1 billion in sales.

ORC in the news

In the past month alone the implications of ORC have been hitting the headlines. On May 8, the Orlando Sentinel reported six people were arrested in Polk County, suspected of stealing and selling an estimated $2 million worth of retail merchandise from across the state.

“The six are suspected to be responsible for 150 reported thefts in the state from Burlington, CVS, JC Penny, Publix, Walgreens and Winn-Dixie, acting between four and five nights a week and hitting eight to 10 businesses each day, according to the Sheriff’s Office.

The suspects were arrested after the PCSO Organized Retail Crime Unit conducted a large-scale undercover investigation with partners.

Meanwhile on May 17, the Manteca Bulletin reported three Stockton residents were arrested and charged with the felonies of conspiracy and grand theft after a tip-off from a suspicious retailer.

And that’s just the tip of the ORC iceberg, with the crime affecting retailers across the country.

An expert panel

It is incidents like these which an expert panel will discuss at the NRF Protect in a session on June 12 entitled “ORC: Aided and abetted with a little help from my friends”.

The session will feature law enforcement officers along with ORC specialists from the retail sphere.

“The sophistication and brazenness of organized retail thieves pose new challenges to retail investigators trying to track them down,” the NRF Protect agenda notes.

“With ORC rings working multi-state and multi-regional territories, it is imperative for retailers to enlist all the assistance they can, both from other retailers and from local law enforcement agencies.”

NRF Protect runs from June 11 to 13 and will be held at the Anaheim Convention Center.

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Five highlights of the NRF Big Show

Kyle Hall — Fri, 18 Jan 2019 03:15:36 +0000

Spanning three days, the National Retail Federation’s annual “Big Show” has just concluded in New York, with technology, and a personalized experience among the key themes explored by over 38,000 attendees over three days.

Here’s a quick recap of the event, with five key highlights from the NRF’s Big Show 2019.

What retail apocalypse?

The purported demise of retail remained a key theme with NRF chairman Chris Baldwin asking the crowd assembled at the opening: “Who remembers 2016?”

“That was the year of the supposed “retail apocalypse,” complete with store closings, bankruptcies and layoffs.

“I would love to say that retail is back, but that would be wrong,” he said. “Retail never went away. As I stand here today, I can say that our industry is more healthy, vibrant, innovative and exciting than ever.”

The reason? Good leaders and nimble companies who were helping “reimagine” the industry.

Tech a focus

Technology was naturally a big focus of this year’s big event, with retailers looking to better understand the potential impact of data and digitization.

The NRF noted: “Concepts like artificial intelligence, robotics, automation, facial recognition and the digital store were popular topics”.

A panel discussing robotics investigated the role robots could play in retail, and more specifically delved into a recent project that saw a 6-foot-3-inch-tall rolling robot named Marty become a fixture of grocery stores in Harrisburg and Carlisle, Pa.

“We wanted to personify the robot,” a panelist noted. “So we gave him googly eyes and a name. The customers love him, especially the kids. They’ve taken thousands of selfies with him.”.

The robot currently trundles about the stores identifying spills, but plans are afoot to see him also recognize out-of-stock items.

The panel explained that in retail, customer service was key. If a robot could take over the chore of preventing out-of-stocks, store associates could make more profitable use of their time, personally assisting customers.

Meanwhile, another panel, featuring representatives from Whirlpool, Sleep Number and the Autonomous Vehicle Alliance, looked at how technology connects consumers to products by bringing “ease, convenience and anticipation to consumers’ lives”.

They explained:

Whirlpool had rethought product presentation in showrooms and customized the selling experience to help associates bring deeper information to consumer purchase decisions.
Sleep Number added consumer value by connecting its products to their well-being, which was key to building loyal customer relationships; and
Automated vehicles could assist retail by serving as both on-demand modes of transportation as well as distribution centers for retailers.

The customer experience – more than tech

While technology is playing a vital role in retail, it’s not the be-all and end-all and using it effectively is about good deployment.

This was the message at a session hosted by Healey Cypher, CEO of Zivelo, and Albert Vita, director of in-store experience and visual merchandising at Home Depot, who noted the store of the future combines the best of online thinking into the physical world.

“Having big stores with a lot of stuff and great selection is not enough,” Cypher said. “Customers want more. They have more at their fingertips every day so now it’s about experience. It’s about service, it’s about speed.”

They urged retailers implementing new technology to:

Start with the right mindset and ask the right questions when considering what their consumer wants and needs
Use the wealth of instore data available
Ensure solving problems using tech doesn’t create friction elsewhere
Make store associates feel like heroes by offering incentives and ensuring they know what they’re talking about
Remember innovation is the by-product of solving a genuine customer problem

Bricks and mortar building brand equity

In a compelling presentation on the new role of bricks and mortar, Lee Peterson of WD Partners, took a deep dive into the evolution of physical retail over the past 20 years.

He noted while retail sales are up, foot traffic in stores had been going down 10 per cent year-over-year for the last decade or so.

“Physical retail is no longer about the distribution of goods,” he said, “but about building brand equity.”

He cited brands such as Vans and Dr. Martens, who have stores with no merchandise. They exist for people to socialize in or otherwise use as a gathering place, and along the way to increase their affinity for the brand.

Another new role for stores, Peterson noted, was click-and-collect where people order online and pick up in the store, while a further strength was online order fulfillment; in many cases it’s easier and cheaper to ship an item from a store’s inventory than from an online distribution center.

Four major goals

In a session about the major advancements retailers were looking to make this year, Forrester Research analyst Sucharita Kodali noted their latest survey indicated there were four main goals:

Grow revenue – Retailers are focusing marketing efforts on acquiring and retaining customers and launching new products to drive revenue.
Reduce costs – While growing revenue, many retailers are also seeking to reduce costs by lowering IT spending but improving the supply chain and retaining employees.
Improve customer experience – Most retailers who responded to the survey said they will be working on both the online and in-store shopping experiences and increasing the frequency of engagement with customers.
Improve products and features – Retailers will simultaneously be making products easier to use, launch products faster and increase customer input when designing products.

Big Show and retail quick stats

This year the NRF Big Show marked its 108th year, drawing nearly 40,000 attendees from across the globe, including 700 exhibitors. There were more than 500 scheduled speakers in more than 200 sessions, making up more than 100 hours of content.

It’s the biggest event on the retail calendar servicing a retail industry that the NRF notes:

Supports one in four jobs in the US
Comprises 42 million workers
Contributes $2.6 trillion to the country’s GDP.
Has grown faster than the nation’s GDP since 2016
Featured 2000 net new store openings in 2018 and an expected sales increase of at least 4.5 percent over 2017.

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