Retailers Are Looking For Ways To Sell Smarter In 2023 And Beyond

The pandemic made retailers less afraid of rapid change, and they came to their industry’s annual trade show this week looking for technologies to help them prepare for it.

Retail executives from around the world came to the National Retail Federation’s convention at New York’s Javits Center in the mood to invest in technology, after learning during the pandemic that the retailers with the best tech were the winners.

While at past shows the tech spotlight largely was on hardware, such as robots, drones, or self-driving vehicles, this year the main attraction was ways to sell smarter – with artificial intelligence, analytics, and platforms that predict what shoppers will do, and how to communicate with them.

The three-day show drew more than 35,000 attendees this year, more than double the number that participated last year, when a surging omicron wave caused several major exhibitors to drop out, and 10,000 registered attendees to stay home.

Retailers typically start the year optimistic, focusing on the sales they can make this year, rather than the ones lost last year. As John Furner, president and CEO of WalmartWMT
U.S., and chairman of the National Retail Federation (NRF) said in kicking open the event on Sunday, “It’s only 10 months until the next holiday season.”

Furner and other speakers at the convention acknowledged 2023 headwinds including ongoing inflation and slowing consumer spending, but in general expressed cautious optimism about the year ahead.

Furner noted that retailers have seen 30 consecutive months of positive sales growth, and that growth for 2022 is expected to be about 7% when the final numbers are in, following 14% growth in 2021.

Jeff Gennette, Chairman and CEO of Macy’s, Inc., said Macy’s had a good holiday in terms of gift purchases, but that consumers cut back on self-purchases more sharply than they have in the past. He said that while there are signs of a downturn, there still are opportunities to grow sales. “Be cautious, but be ready to pounce when opportunities and signals present themselves,” he said.

One way many retailers are planning to pounce on opportunities this year is through technology investments.

According to Coresight Research, which is preparing a report on retail technology investment, more than two-thirds of U.S. based retailers plan to increase their technology spending over the next three years.

Advancements in AI – artificial intelligence – for predicting trends, communicating with customers, or keeping shelves stocked – was a dominant theme of the tech vendors exhibiting at this year’s show.

At the show’s Innovation Lab, which featured 53 companies chosen because of their “transformative technologies,” more than 25% of the companies were AI-related, and five of them had AI as part of their names.

Dozens of other tech vendors, large and small, were featuring new AI-powered tools on the main exhibit floors as well.

Sony Semiconductor Solutions was demonstrating its AI sensing platform, AITROS, which can use visual AI tools to show retails when products are missing on shelves, provide merchandising information for brands, or staffing and operational information.

Google Cloud was showcasing four recently announced AI tools, including tools for spotting out-of-stocks on store shelves, and for creating more personalized recommendations for online shoppers.

Retailers increasingly are realizing that AI will be essential for their businesses going foward, said Rosie Bailey, co-founder and CEO of U.K.-based Nibble Technology, which has created a negotiation chatbot that can haggle with customers to give them a personalized price.

Even as recently as last year retailers still were reacting to mentions of AI “with a little bit of rolling their eyes,” Bailey said. But now, at this year’s show, “they are seeing it as the new standard for technology,” she said.

Nibble can be used by retailers to get the best online price for clearance merchandise, and has been shown to increase margins for retail users compared to uniform across the board markdowns.

Nibble has a professor of negotiation strategy on its board, and the Nibble chatbot has been trained with tested techniques for closing a deal.