Dirty Martini Volume 8

Dated: Jan 25, 2024

Welcome to The Dirty Martini Digest, Issue #8. This newsletter is built for our technology friends to enable you to do your job more effectively. The team is back from a five-day odyssey in New York at the NRF Big Show. We executed four events in three days, attended several more, gave a Unified Commerce session in the main program, had dozens of meetings and most importantly, caught up with the best people in the business. As a kickoff to this year, in addition to our ongoing insights sharing, we’ve sought out insights on key takeaways from NRF from people we respect in the business. Enjoy this month’s issue of the Dirty Martini Digest!

The Dirty Details

With a new year comes new enthusiasm. 2024 has started with a very positive energy following a healthy holiday season and a strong end to year in the stock market. Now it’s time to get to work, and with it, retailers are prioritizing their projects for the year, including how and where to innovate.

Innovation in retail can be defined in a thousand different ways but with the pace of change in technology and the moving consumer target, it’s invaluable to understand where innovation can help the industry win. In our Second Annual Innovation in Retail Study we released at NRF with partner Toshiba Global Commerce Solutions, we dug into what innovation means for retailers. More importantly, we analyzed what having a culture of innovation and executive buy-in means for performance for retailers. In addition, we added Latin America this year and offer a comparison between them and North American retailers. Some of the key findings from the Research include:

65% of leadership teams of retailers in US & Canada are committed to innovation
56% of companies whose leadership is not committed to innovation face resource constraints that impede innovation, compared to 29% of companies with leadership commitment to innovation.
While 65% of retailers are committed to innovation, only 25% of US & Canadian retailers and 21% of Latin American retailers have well defined processes in place to enable innovation.
With the high emphasis on digital-physical integration, only 9% of US and Canadian retailers are highly mature in configuring physical store experiences with digital-like control, flexibility, and speed. However, 47% do have medium maturity.
As complexity in the industry increases, focusing on innovation to address these new business requirements is critical. Only 7% of retailers consider themselves highly mature in the capability and 61% consider themselves somewhat mature.
Jumping on the AI train, 49% of US and Canadian Retailers and 22% of Latin American retailers are scaling plans to adopt initiatives. Among the applications, robotic process automation (RPA) ranks highest for US and Canada and Machine Learning/Deep Learning ranks highest for Latin American retailers.

Dive deeper into our cross-industry research and content

2024 Connected Retail Experience Study: Focusing on Omnichannel Efficiency - This report, in partnership with Verizon and Cisco, explores the growing importance of omnichannel efficiency in the retail industry. It highlights the struggle to align technology with the needs of a multi-generational workforce and positions automation as an operational necessity. The report also reveals a trend towards pragmatic innovation, with retailers increasingly aligning their strategies with technological advancements to meet the evolving demands of the digital landscape.
A Framework for Unified Loyalty and Rewards in Retail - This report, in conjunction with Diebold Nixdorf, highlights a framework retailers can leverage to build an omnichannel strategy around promotions and loyalty in an increasingly challenging environment.
December 2023: State of Digital Grocery Scorecard - Key highlights summarized for the year in the quick hit snapshot. The year ended with 13.1% of all grocery sales being online, a statistically steady number from earlier in the year. Check out this snapshot to see other important insights on how grocery is incorporating digital across their enterprises.

Straight from the Shaker

Get practical insights and best practices straight from our industry experts, as we shake up and serve up our knowledge to help you improve your go-to-market strategies. Each month, we'll share tips to help you stay ahead of the game.

In honor of the industry’s biggest trade show, NRF, we’ve sought key takeaways from the show from leaders in the industry. Because of the sheer volume of content and extracurricular activities, there is no way to take it all in….You’ll find the feedback from We’ve summarized some of our favorite feedback below.

What Retailers had to say:

“My takeaway was that just because AI is slapped in front of every solution doesn’t mean that the underlying value proposition for it is fundamentally different. I’m not buying a solution based on its AI application, I’m buying it based on the value to my business."
- Bill Gratke - VP Supply Chain Solutions - Lamps Plus.

----------

"My biggest ‘takeaway’ from the NRF this year is that what I saw on the floor was non-innovative approaches to sell innovation. In other words, the booths, the tactics, and all the NRF gimmicks are the same year after year. Especially from the large software vendors. It’s counterintuitive to believe that a vendor can really deliver innovation while you are standing at the same booth they had for 10+ years, with no innovation associated to it. Every booth has a feel of a used car dealership. (“Hi, can I scan your badge? Let me give you a pair of ugly socks for it”. I mean, really?) And every vendor feels compelled to incorporate the “word of the year” (in this case AI) into their narrative, which actually works against them and dilutes their identity in the sea of others doing the same exact thing, with the same exact pitch. I think it’s time for NRF to reinvent itself."
- Ken Feyder - CIO Americas - Hermes

----------

"The Retailers I spoke with reflected that the constant drumbeat on AI was both overkill and confusing. They also are challenged with the latest “vendor buzzwords” like “composable commerce".”
- Cathy Hotka - Hotka & Associates.

What the industry experts had to say:

'The evolution of RFID tags has given them a key loss prevention use-case, hereby enhancing their value. With tag’s ability to turn on/off when bought and returned, they can put a major dent in Returns Fraud. In addition, it looks like greater adoption as a tracker in the supply chain will add additional ROI."
- Greg Buzek- President IHL Group

----------

“In the midst of all the A.I. excitement – was the reminder of the importance of human-centric thinking, investments, solutions and generally the role of relationships. The combination of powerful technology with this mindset can propel retail in a very positive direction.”
- Fredrik Carlegren- VP Marketing Toshiba Global Commerce Solutions

----------

“Sustainability is now recognized as a critical business imperative, beyond just being the right ethical choice. Hearing Steven Williams, the CEO of PepsiCo North America in his keynote address talk to this made it a reality for me.”
- Kasey Lobaugh - Chief Futurist Consumer Industry at Deloitte

----------

“It was refreshing to see a noticeable shift away from aspirational solutions such as metaverse and NFTs to more pragmatic solutions like electronic shelf labels, retail media networks and, yes, AI. While AI may seem aspirational for some companies, it is currently providing real value to savvy retailers.”
- David Naumann, Global Retail Marketing Strategy Leader, Verizon

----------

“Unified commerce has evolved from being a mere luxury to an absolute necessity. To excel and flourish in 2024, retailers are fully immersing themselves in the art and science of unified commerce. This encompasses everything, from effective product search and discovery, seamless promising and fulfillment, smooth payments and checkout experiences, to comprehensive omnichannel customer engagement throughout the buying journey. The goal? Elevate NPS scores, foster unwavering loyalty, and secure a larger share of customers’ wallets to drive top-line and bottom-line revenue growths.”
- Ann Ruckstuhl - CMO - Manhattan Associates

----------

"Beyond Generative AI, it was clear that Retail executives were interested in exploring new in-store technology from RFID to carts and simplified check-out tech. Also, digital experience capabilities including loyalty, personalization, and advanced commerce platforms. Finally, new supply chain enablers to facilitate speed and accuracy from order to delivery. Retail is growing both in store and online and thus strong interest across both physical and digital unified commerce capabilities."
- Justin Honaman - Head, Worldwide Retail & Consumer Goods Go-To-Market (GTM) - AWS

----------

"While AI was definitely the hot topic everywhere at NRF, what stood out to me was that unlike previous "tech trends" at NRF, this wasn't just about "what can I do with AI?". It was more about what retailers have done with AI, what was the outcome, how did they do it, and what was the ROI? The buzz wasn't just hype, it was about practical, real-world results that are not only meaningful but very impactful to their business. While 2023 may have been the "year of AI", 2024 will be the "year of AI ROI" - and the results will be more meaningful than expected!"
- Ricardo Belmar- Microsoft and Retail Razor Podcast

On the House

As we bask in the crazy week that is NRF, we reflect on some of the amazing experiences we had in what we think is one of our most important endeavors - connecting with people. See below for some great shots from our events and others’

RetailROI SuperSaturday

Speakeasy @ NRF

UnConference @ NRF

The Great Indian Meal

Rock & Roll Underground

Unifying the Retail Experience: Lessons from Customer Experience Leaders

Art on the Rocks

Experience the intersection of technology and creativity each month as we use artificial intelligence to generate a unique art piece that explores a key industry topic.

Taken from our Innovation in Retail Research Report, our AI image was inspired by the work of UK Street Artist, Banksy.

Second Round

Expand your industry knowledge with our recommended reading, featuring insightful articles and resources that caught our attention this month.

4 Business Opportunities for Grocers in 2024 - Listed on our Grocery Doppio platform, this article details the opportunities grocery chains can take advantage of this year based on shopper preferences and trends.
NRF 2024 Recap - In honor of an incredibly busy and productive event, our friends at RETHINK Retail put together a cool video recapping the show. Check it out!

----

We're here to help you navigate through your biggest challenges and win in this highly competitive market. Anytime you want to talk, book a meeting.

Newsletter Dated: Feb 14, 2023

Does Innovation Still Matter in Retail?

State of the Industry - Innovation in Retail - Key Takeaways.

Innovation Leaders Far Outperform Their Peers in Revenue Growth
Retailers who are leaders in innovation have a 3-year revenue CAGR of 6.2%, whereas non-leaders have a 3-year revenue CAGR of 0.7%.
Importance of Innovation Recognized but Not Always Practiced:
Despite the majority of retailers recognizing the critical importance of innovation for future growth, only 22% actively encouraged and rewarded risk-taking and experimentation within their organizations.
Innovation Priorities are Focused around Operations:
Retailers' operations-focused innovation priorities are centered around foundational capabilities such as inventory visibility, with 76% of retailers either scaling or exploring innovation initiatives in this area.
Leading Retailers Also Focus on Leveraging Innovation to Drive Customer Experience:
Leading retailers are focusing on utilizing the intelligence gained from inventory data to create better customer experiences. For instance, 65% are scaling or exploring initiatives to help them provide narrower and more accurate delivery estimates to shoppers.
Unifying Customer Experience Across Channels is Top Priority:
Unifying the customer experience across digital and physical channels is retailers' top customer experience-focused innovation priority. The brick and mortar store plays a crucial role in this aspect, as it offers customers the ability to physically interact with products and engage with the brand in person.
Adoption Maturity of Key Innovation Technologies Categorized:
The study includes categorization of key technologies such as artificial intelligence, process automation, robotics, and Internet of Things across an adoption maturity spectrum, helping retailers understand where they fall among peers in these areas. AI stands as the most mature in terms of active adoption or pilots
A Significant Opportunity for Retailers to Improve their Innovation Capabilities:
The study highlights a significant opportunity for retailers to improve their innovation capabilities and drive better business performance. By focusing on unifying the customer experience across channels and utilizing the intelligence gained from inventory data, retailers can enhance their innovation capabilities and stay ahead of the curve in a highly competitive industry.
Conclusion:
The study is an important reminder that retailers need to find new ways to solve the critical challenge of unification across digital and physical channels in order to drive growth. Retailers who invest in innovation will be better positioned to meet the changing needs of customers and remain competitive in the market. To know more about this study click here.

The Dirty Martini Archives

The Dirty Details