A famous quote from Peter Drucker nicely summarizes a key question for today’s retail industry: “If you can’t measure it, you can’t improve it.” The retail industry has undergone massive transformation and massive improvement in the last few years. As this evolution continues, many experts are now questioning the value of long-standing metrics like same-store sales and wondering So, what will this new future look like for retail, and how will we measure it?
To explore that question, NRF recently held our second Candid Discussion on the Future of Retail, bringing together top Wall Street analysts, economists, journalists and retail executives for an off-the-record conversation about what’s going on in retail today and where the industry is headed.
The dialogue shed light on retail’s ongoing transformation and the unknowns that still exist. Analysts, journalists and executives are all trying to understand, predict and strategise in a dynamic retail environment that is more diverse and fast-moving than ever before. No one has definitive answers, but we can advance our shared understanding with conversations between those in the industry and those who cover it.
Our event convened leading experts to do just that, sharing their perspectives on some of the most important questions shaping retail.
For example, we know that many retailers are evolving and experimenting, but how can analysts and journalists accurately value and assess these new developments? What data and metrics can retailers provide to give analysts a better picture of what they’re investing in, what the returns could be and what the overall landscape looks like? Where will retail penetration and online/in-store parity settle, and how should retailers be investing as a result?
A few overarching themes emerged:
- Measuring a reimagined retail: Companies are turning to new metrics for the new retail environment. These next-gen metrics recognize that the holistic shopping experience – whether whether online, in-store or both – is more important than any one channel. Comp sales that include digital, market share and net promoter scores are increasingly seen as painting a more complete picture than traditional metrics, particularly because they capture the “halo” effect of in-store and online and reflect an increasingly channel-agnostic consumer.
- Understanding new entrants: What does the growing number of new entrants and business models mean for today’s retail climate? New kids Casper, KIDBOX and Neighborhood Goods joined us to discuss their original vision and how their approach evolved over time, whether by opening physical stores, forming strategic collaborations or remaining pure plays. Their diverse paths spoke to the vibrancy and overall health of today’s retail industry, which features an unprecedented variety of business models and approaches.
- Evaluating effective investments: Retailers are seeing investments made five and even 10 years ago begin to pay off, particularly those in technology, omnichannel capabilities and digital. Now, companies are turning to the next wave of investments, including those in advanced data and analytics, artificial intelligence and product curation. The goal is to better understand the customer and deliver the products and experiences they want, laying the foundation for success over the next 10 years.
There are many reasons to be optimistic about the future. Retailers are crafting the decisions and investments that will sustain their success, and analysts and journalists are recognizing and understanding these new dynamics. We look forward to learning more from thousands of retailers and executives from every facet of the industry at NRF 2019: Retail’s Big Show in New York City, January 13-15, 2019.
Let us know what you think. What are the metrics that can more accurately measure performance in retail today? What new entrants and business models do you find most interesting? What investments should retailers be making to thrive over the long term? How the new retail industry can be measured more accurately.