NRF 2020: Microsoft CEO Cites Walgreens, Canada Goose And Walmart As Retail Tech Leaders

“You cannot be cool by association with a tech brand. You have to be cool on your own.” -Microsoft CEO Satya Nadella

  • January 12, 2020 at 1:51 PM EST
  • By Bryan Wassel
Microsoft at #NRF2020
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Technology is “reinforcing the arc of retail” and setting new standards for excellence, said Satya Nadella, CEO of Microsoft during the opening keynote of the NRF 2020 Big Show at New York City’s Javits Center. However, retailers can’t just partner with a provider and call it done: they need to make their offerings their own, fostering independence and building on customer knowledge to deliver incredible experiences.

“You cannot be cool by association with a tech brand. You have to be cool on your own,” said Nadella. “You have to really take pride in the digital capabilities you have built — no one else is going to do it for you.”

Nadella laid out four key areas where tech adoption can drive retail excellence, along with examples of retailers that exemplify this phenomenon:

  • Personalizing the shopper journey to ensure every customer receives a relevant experience as Walgreens does with its massive database;
  • Enhancing the overall shopper experience through a combination of art and technology, as Canada Goose and Natuzzi do;
  • Empowering the workforce to help every associate become a top-notch brand ambassador at the heart of selling, which IKEA is achieving through a connective app; and
  • Creating an intelligent supply chain that combines backend and frontend operations to work as a cohesive whole, as Walmart and Marks & Spencer have done.

At Walgreens, Personalization Goes Beyond Promotions

Personalization is increasingly the heart of retail: 30% of e-Commerce sales come from product recommendations, and 85% of shoppers expect retailers to send them personalized promotions. Reaching shoppers with messaging that resonates, rather than painting in broad strokes, requires a comprehensive approach that supersedes individual silos.

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Additionally, top retailers don’t limit their personalization efforts to promotions or loyalty programs — they define the fabric of every brick-and-mortar store. There is a Walgreens store within five miles of 78% of the U.S. population and the stores draw in 7 million shoppers every day. However, rather than offering a similar selection nationwide, each store carries products relevant to its local customer base.

Walgreens’ demand sensing solutions forecast 200 million different items across 5,000 suppliers to ensure every shelf carries the right products every day. The software operates at the speed of customers, allowing the retailer to detect and fine-tune all 9,000 stores’ inventory and react to changing shopper behavior without delay.

Canada Goose And Natuzzi Put Tech At The Center Of The Store Experience

Canada Goose is one of the prime examples of “retail-tainment” in the industry, according to Nadella. Digital integration lets the company’s flagship store carry just one of every item in stock: thanks to the seamless connection between its wholesale and retail operations, shoppers can pick out what they want and have it delivered the same day.

Without having to worry about stocking inventory in back rooms, the retailer has focused on creating unique in-store experiences. Some stores feature “Cold Rooms that simulate temperature changes (and actual snowfall at the retailer’s latest concept) to see how gear holds up in actual weather conditions.

Additionally, Italian retailer Natuzzi is tapping the power of AR to not only make its entire catalog available at every store, but to also make it visible at home. This mixed reality experience lets shoppers test how items will look before they buy, minimizing the chance that they’ll be taken by surprise when their choice is delivered.

IKEA Uses Technology To Bring Associates And Executives Closer

Placing tech in the hands of associates can have a major impact, since front line employees are the ones actually driving day-to-day operations on the ground.

“The art of retail still comes down to down how the people who work for you in your stores and operations are able to drive shopper decisions,” said Nadella. “They need the right insights and data in their hands, and empowering them is going to make a difference. That’s the best ROI you can achieve, because what happens is you increase the conversion rate by 15% and you increase the satisfaction by 10%.”

IKEA improved its performance in this area by breaking down the silo between its home offices and stores, including the elimination of roles that were propping up silos. The retailer’s team app lets workers contact leaders through text messages and change shifts through a simple interface rather than by having to fill out forms.

Walmart And Marks & Spencer Connect Digital With Physical

Walmart exemplifies the power of a connected supply chain: the retail giant, which handles 75 million customers per week, built its own IoT cloud platform and location services into its app to ensure everyone has a seamless experience from order through pickup. This connection benefits associates as well, with customers alerting associates about when the shopper is about to arrive in order to help teams prepare the order and minimize BOPIS wait times.

Seventy-five percent of shopping may be happening online, but the pickups are happening offline,” said Nadella. “The lifetime value of a customer who experiences greatness on the omnichannel experience is 1.6 times. The expectations of everybody have changed, and people need that seamless experience.”

Outside of BOPIS, the power of omnichannel can utilize digital analytics to ensure a smooth, consistent in-store experience. Marks & Spencer tracks everything from wait times at the queue to temperatures in coolers to keep its locations running in tip-top shape — and just as importantly, enable managers to react in real time when problems do arise.

Perhaps the most important aspect of an independent, omniconnected digital system is its ability to understand the customer. Proper personalization, empowered associates and seamless shopping all require a complete view of shoppers, and this understanding is, in turn, what makes modern technology advances possible. “We call it enabling intelligent retail,” said Nadella. “It starts with knowing your customers: how do you use all that data? How do you use digital to take what you’ve always done well and take it to the next level?”

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