What’s the saying….the only constant is change? At NRF last week, retailers leaned into that wisdom, drawing on the challenges of 2022 (inflation, supply-chain issues, international conflicts), and weighing in on their expectations for the coming year and those after.
John Furner, US president and CEO of Walmart (and NRF board chairman), described the current state of play this way in his opening remarks: “This environment will remain dynamic; it will remain full of changes, full of challenges, and it’s a unique time for all of us…to serve customers as the wants and needs continue to change.”
Following Furner’s opening speech and throughout the weekend, we heard from retail executives, tech leaders, and economists about what they’re expecting in the coming months.
Consumers won’t be alone in tightening their belts
Several speakers alluded to their consumers’ increased desire for discounts and savings, but when it came to predictions for the rest of the year, retailers reining in spending was also top of mind.
Saks OFF 5th President and CEO Paige Thomas said when she thinks about the year ahead for the retail industry, it’s about being both conservative and agile.
“I think that what we experienced was aggressive rebounds coming out of the pandemic, and probably didn’t have the right lens of thinking about the inflation and the impact on customers,” Thomas said.
- The first half of 2023 is likely to be more challenging for the industry than the latter half, she predicted.
- “We’ve already heard some references to a more challenging fourth quarter, which results in more inventory, continuing promotionality [that] we are experiencing still in the January time period.” Thomas said. “And so it’s time for us to be a little bit more conservative and chase the business as we see it.”
Ads are out, authenticity is in
If we had to put together a list of NRF buzzwords, “authenticity” would definitely make the top five. It came up in conversations about everything from how to ~vibe~ with Gen Z to conscious capitalism.
Authenticity was a key theme in a conversation with Neal Hubman, global head of client solutions at Reddit, who advised the audience that younger generations are open to brands entering new and more social spaces, as long as it’s done in the right way.
- “Are younger generations losing trust in brands? It depends,” Hubman said. “The majority of them said they would welcome brands into this space, or into their communities as long as there’s a value add there,” he explained. “The biggest thing is to create trust; it needs to be in some authentic way.”
Meanwhile, Gigi Ganatra, VP of corporate affairs at Nordstrom, told attendees authenticity is also a must when it comes to building programs to give back to communities and consumers.
- “It’s really important to make sure you are authentic to the brand,” Ganatra said, adding that Nordstrom collected data and responses from both employees and shoppers before launching BeautyCycle, a program aimed at reducing plastic waste in the beauty industry.
- As far as achieving authenticity, Hollister’s senior director of brand marketing strategy Jacee Scoular had some advice: “If you…think about truly what your consumer needs, the life stage they’re in, what they’re going through, [and] the world around them, you build a purpose that inherently gets very authentic and seamlessly woven into your narratives day in and day out.”
We’re still playing around with emerging tech
If you’re sick of hearing about experimentation with Web3 or the metaverse or other tech trends (AI, anyone?)…too bad.
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“This is the year to start figuring it out, have somebody on your staff, start doing the research around Web3, and then report back in,” Hubman told audience members. “That’s what we’re seeing when some of the largest brands now that are spinning up teams tend to focus on it.”
Retailers are navigating a “digital playground” in the coming years, balancing shareholder profitability and the desire to stay ahead in the industry, explained Rachel Dalton, head of retail insights at Kantar.
Kristin Patrick, EVP and chief marketing officer at Claire’s, put it this way: “We’re at this precipitous moment in time where the world has changed so dramatically over the last two years…and we at Claire’s don’t have the ability to not be on top of tech trends…We have to be bleeding edge.”—MA