NRF 2024: AI, Digital Stores, Flexibility and Other Trends Dominating Retail’s Big Show

Artificial intelligence took center stage at the National Retail Federation's annual Big Show held in New York City last week. Some 40,000 attendees and retailers from across the globe swarmed the Javits Center to explore AI-focused technologies and other innovations tailored to their current requirements, opening doors to new possibilities.

RFID Has Come a Long Way

RFID isn’t new, and it isn’t AI, but the tiny tags could help retailers get their arms around shoplifting, improve inventory management, and create friction-free shopping experiences. For Macy’s Joe Coll, vice president of asset protection operations and strategy, RFID has been the “biggest innovation change” for the department store retailer. It’s helped the company shift from loss prevention to loss detection, giving employees the tools to intervene before merchandise leaves the store in the wrong hands. Consumers hate when the product they’re looking for is out of stock, so using RFID to prevent retail crime supports a healthier inventory position and happier shoppers.

Diebold Nixdorf showcased an RFID-based checkout setup for apparel. Its hardware accurately reads RFID-tagged clothing and shoes by the batch, reducing the time spent scanning individual items. The company touted the benefits of RFID, not just for streamlining checkout but also for reducing shrink and optimizing replenishment strategies.

Avery Dennison and AWS tag-teamed on an RFID-based store rollout in several national stadiums, meeting consumer demand for frictionless checkout. At their Just Walk Out stores, customers don’t get frustrated waiting in line to pay for RFID-tagged sports jerseys and other team merchandise. Exit gates installed at the store entrance read each passing RFID tag, and payment is handled automatically based on the customer’s stored card data. Removing friction from the checkout experience means shoppers are less likely to abandon their purchase before it’s complete.

AI, Experience and Operations Go Hand-in-Hand

ChatGPT brought generative AI into the mainstream. Now retailers see the need to ramp up investments in AI-based solutions, generative and otherwise.

Enter: business AI, SAP's strategy of weaving algorithms, predictive technologies and analytics into the heart of retail decision making around demand planning, replenishment and other enterprise capabilities. What this really means is that retailers have yet to solve many of their fundamental operational challenges, and that’s where they should look to AI for help before splurging on gimmicky consumer-facing AI novelties.

Consumers also have bigger expectations for their retail experiences, especially with a hazy economic outlook casting a pall over their financial health this year. No matter if they’re shopping in stores or online — which 63 percent of consumers prefer, says WD Partners’ Lee Petersen — people demand a great experience that’s tailored to their needs. And with more choices than ever, shoppers won’t tolerate a poor experience when they have their pick of customer-friendly merchants.

Diebold Nixdorf is focusing on improving customer experience at self-checkout and combatting retailer loss in the process with its growing AI-based software suite. Its new AI solution knows if shoppers are intentionally or unintentionally miss-scanning — e.g., if a product doesn’t match its label or if a shopper has accidentally left milk in the cart without paying, plus more than a dozen other sources of retail loss. Last year, the company rolled out AI-based age verification and fresh produce recognition solutions that drastically reduce the need for staff intervention at self-checkout, while addressing these known pain points for shoppers.

While Diebold Nixdorf isn't the first company to apply AI and computer vision to tackling the shrink problem, its checkout hardware is already in use by more than 150 grocery and convenience store chains worldwide. Retailers that already have Diebold Nixdorf’s technology in-store will have immediate access to the cloud-based upgrade on their machines, setting it up to be the largest scale rollout of an AI-based loss prevention solution in retail yet.

Coveo's AI-powered search and product discovery platform focuses on helping e-commerce sellers deliver relevant results based on shopper behavior. The technology provider’s “relevance engine” delivers product recommendations likely to resonate with customers. For example, someone who puts golf clubs in their online cart and then searches the same site for “gloves” will surface items related to golf, not skiing or boxing or some other glove-wearing sport. Coveo tailors the results to the retailer’s key performance indicators, meaning it can promote high-margin products or slow-moving items, whichever metrics matter the most.

Coveo’s recently launched Relevance Generative Answering taps into the demand for GenAI-powered solutions that use Large Language Models to answer customer queries. The long and short of it: GenAI helps people find answers faster. It’s exciting to think that we’re entering a new era of digital interactions.

With Microsoft's upgraded GenAI-based copilot chatbot template, retailers can develop new tools to personalize the digital shopper journey on an e-commerce site or mobile app. Chat-based solutions built on the new template field inquiries written the way people communicate with each other, in full sentences with nuanced details, and spit out results and recommendations in equally natural language.

Companies like Firework and Parla are using video to personalize the customer experience.

Firework, renowned for its livestream shopping technology, has recently introduced a one-to-one video product. Lily Rotter, the head of marketing for the video commerce company, mentioned that this targets Gen X consumers and others seeking a personalized shopping assistant experience from the comfort of their homes. While Gen Z leans towards snackable TikTok-style short-form content, older demographics typically prefer in-depth product research and connecting with an expert to address their inquiries. Parla, a London-based startup with a one-to-one live video selling solution, says its technology has the potential to double or triple average order value (AOV) and boost conversions by 58 percent while giving shoppers a high-touch digital experience.

In-Store Digital Technologies That Blur the Lines Between Online and Offline

With America’s unemployment rate is at 3.7 percent as of December, many retailers that don’t have enough employees to adequately staff their stores look for help from digital technology. Something as simple as digital shelf signage coupled with touchscreen kiosks creates a store environment where customers can quickly access product information without having to consult an associate.

tutch is one company tying these technologies together. The company’s software can be displayed on any screens throughout retailers' stores. The result is an in-store digital platform that shoppers can use to browse aisles, access inventory in and out of the store, and discover new items they didn't even know they were looking for.

tutch showcased a live experience of its work with Beacon Lighting (now live in 70 stores), which relies on tutch to transform its in-store shopping experience into a digital one with access to all inventory across the retailer's full enterprise. During the experience, shoppers are presented with recommended products, upsell opportunities and add-ons, among other opportunities to increase their order size.

For retailers, this approach introduces new opportunities to increase AOV (tutch says it increases average basket sizes up to 30 percent), optimize inventory (by decreasing stock holding by as much as 28 percent), gain behavioral knowledge about in-store shoppers, introduce new revenue streams (through digital media space for brands), engage in market-placing (including drop-shipping third-party products), augment busy staff, and increase customer lifetime value.

Store transformation specialists Pomeroy were on hand to talk about how the lines between digital and physical stores have completely blurred. The company, which recently brought Meta Glasses to life with Ray-Ban, works with retailers that are looking for ways to bring shoppers’ in-store experiences in line with what they’re accustomed to online, while simultaneously digitizing their core operations. To do this, Pomeroy is addressing everything from frictionless checkout, shrink reduction, and personalized shopping recommendations to inventory management, virtual store visits and try-ons, and autonomous store functionality.

According to Pomeroy’s Jay Shields, “While retailers are figuring out exactly how to design and power the digital stores of the future, they can’t lose sight of the foundational technologies that improve everyday operations, efficiencies and, of course, customer experience.”

This month, Pomeroy Retail Innovation Lab, where retailers will be able to touch, feel and experience technologies from the digital store of the future, will launch. While retailers like Kroger and Walmart have their own in-house innovation labs, most major retailers don’t. Pomeroy is giving retailers a place to see physical and cloud technologies that make the world’s physical stores run in action — all within a single retail-like environment.

SageNet is also bringing online and offline together to create a richer commerce experience. The managed services provider’s visually rich kiosk empowers shoppers to discover products relevant to their needs and find what’s in stock in-store. When the consumer narrows down their choices to one product of interest, tapping on that item on the screen lights up a flashing digital sign beneath the physical on-shelf product, helping the shopper easily find their item on a vast product display wall. This approach offers the one-two punch of elevating the in-store journey while coping with retail’s labor shortage.

The More Flexible, the Better

Checkout has always been one of the most inflexible parts of the e-commerce experience. And physical stores have spent millions adopting, and then replacing, solutions as they’ve evolved over time.

Bold Commerce has already unshackled the checkout from e-commerce platforms to introduce headless options to companies like Vera Bradley, PayPal, Staples, and Harry Rosen. At this year’s Big Show, it rolled out its work with Wink to introduce a new biometrics-powered approach to mobile, desktop and in-store checkouts so shoppers can use their face or voice to fill in everything from their login credentials and delivery details to loyalty points, coupon offers and payment preferences. Unlike current biometric technologies in retail that focus on the payments portion of checkout alone, Bold Commerce and Wink bring biometrics into every part of the checkout process.

The new AI-enabled biometric checkout authenticates shoppers with face and voice recognition using the camera on their personal device or in-store device (e.g., POS terminals or self-checkout stations). Once verified, shoppers are automatically logged into their customer account and details such as delivery preferences, loyalty points, coupon offers and preferred payment method are all auto-filled.

“Shoppers want to get through checkout faster, but they also want an experience that’s catered specifically to their shopping preferences," said Jay Myers, co-founder, Bold Commerce. "With this new biometric checkout, we’re powering that faster experience for shoppers — with no passwords or PINs — but also ensuring checkout is completely personalized to who they are and how they shop.”

If you ask Pomeroy’s Shields about the biggest trends in retail right now, her biggest bet is on flexibility: “I remember being at NRF almost 20 years ago and seeing a lot of hardware vendors in the spotlight. Now we’re seeing retail brands demanding lighter and more flexible footprints. Instead of investing in an entirely new POS, they’re just looking for a better way to handle returns. Instead of an entirely new monitoring solution, they want a simpler way to track customer behavior that won’t break what they have. Rather than heavy hardware that’s cashier-lead today, they need something that can cater to self-checkout tomorrow.

“The future is all about flexibility — and having been in the retail space for as long as I have, I think we've only scratched the surface of just how flexible things can be.”

Delivering on Delivery

Oracle and Uber have big things in store for the last mile. Their Collect and Receive launch on the latest Oracle Retail platform will eventually evolve well beyond same-day delivery and returns, says Oracle’s Michael Colpitts, omnichannel solutions director. He sees retailers using the service to move supplies and fixtures between stores for an operational boost that can preserve brand image. And at some point retailers will use Collect and Receive to create experiences for loyal, high-value customers, like arranging their rides to and from exclusive brand activations, or bringing the store to the high-spending shopper, a la Louis Vuitton. Those are just a couple of examples of how retailers can take advantage of Collect and Receive technology to “reinvent” themselves with a close-to-customer approach, says Colpitts.

NRF 2024 gave a look at where retail is heading this year and beyond. Though AI was top of mind for retailers, there’s no shortage of technologies that aim to solve problems in-store and online. And with shopper demands increasing, retailers have to invest in solutions that meet expectations for a seamless, personalized experience.

Kieran Powell is the executive vice president of Channel V Media, a PR and communications agency that works with retail, technology and financial companies to create awareness among their high‑value audiences.