By R "Ray" Wang on January 19, 2019
Retail Innovation Continues To Improve As Budgets And Margin Grow
Over 40,000 attendees gathered at Jacob Javitz convention center in New York City for the annual big show (see Figure 1.) The show kicked off with a keynote from BJ’s Wholesale Club Chairman, President, and CEO Chris Baldwin. Chris conveyed the impact of retail on the economy with $2.6 trillion in US GDP, one third of Americans starting their first job, and one in four jobs in the U.S. Despite the stereotypical grim outlook, Baldwin noted that retailers had 2,000 net new store openings in 2018.
Figure 1. Registration at Javitz Center
Top Trends Highlight A Business Model Shift
Top retail trends for 2019 include both technology and business model shifts (see Figure 2). New business models include:
Mass personalization at scale
Multi-channel return optimization
Private labels
Checkout free retail
Pop-up stores
Small format stores
Stores as distribution centers
Digital supply chains
Micro warehousing
Figure 2. Retailers navigate exponential tech amidst new business model shifts #NRF2019
Key technology trends in order of importance:
AI and machine learning pervasiveness
Dynamic pricing and pricing optimization
Order management and order orchestration
Robotics and drone automation
Blockchain adoption
The Bottom Line: Retailers With Digital Efforts And New Business Models Will Win
Retail performance shows a growing dichotomy between the winners and losers. Brick and mortars who built digital business models will continue to lose market share and revenue to pure play digital players unless they adjust their business models for digital. Winners will continue to focus on contextually relevant, experience driven, design principles. Retailers must build joint ventures to counter the Amazon threat in order to invest enough in innovation. Partners with public cloud service providers such as Google Cloud and Microsoft Azure will be required to beat Amazon.
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Resources And Related Research
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Event Report: @ServiceNow Transforms From #ITSM To Experience Orchestration #know18 May 10, 2018
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Monday’s Musing: Infinite Ambient Orchestration November 6, 2017
Tuesday’s Tip: Know When To Automate With Artificial Intelligence September 19, 2017
Personal Log: Congratulations To Constellation’s BT-150 Winners #BT150 September 6, 2017
Event Invitation: Radical Candor Author Kim Scott Delivering Keynote at Connected Enterprise 2017 August 29, 2017
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Tuesday’s Tip: Seven Universal Factors Why Technology Firms Fail January 10, 2017
Monday’s Musings: Dynamic Leadership – A Responsive And Responsible Approach #Davos #WEF17 January 2, 2017
Monday’s Musings: Why A Bi-Modal Approach to Digital Transformation Is Just Stupid December 12, 2016
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Monday’s Musings: The Post #BREXIT Analysis, What’s Next? June 27, 2016
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Book Summary: Lesson 10 From Disrupting Digital Business – Segment By Digital Proficiency Not Age July 12, 2015
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R “Ray” Wang (pronounced WAHNG) is the Principal Analyst, Founder, and Chairman of Silicon Valley based Constellation Research, Inc. He’s the author of the popular business strategy and technology blog “A Software Insider’s Point of View”. Wang has held executive roles in product, marketing, strategy, and consulting at institutions such as Forrester Research, Oracle, PeopleSoft, Deloitte, Ernst & Young, and Johns Hopkins Hospital. His best selling book, Disrupting Digital Business, published by Harvard Business Review Press provides insights on why 52% of the Fortune 500 have been merged, acquired, gone bankrupt, or fallen off the list since 2000.
Wang is a prominent dynamic keynote speaker, research analyst, and industry commentator working with clients to transform their business models using exponential technologies. He’s spoken around the world at almost every tech related conference including keynotes for tens of thousands of people and intimate executive settings such as Davos. Ray’s clients include a majority of the Fortune 500 and Global 200.
Ray is well quoted in media outlets such as the Wall Street Journal, FoxBusiness, CNBC, Bloomberg, CNN, CGTN, Tech Crunch, Business Week, and Fortune. He has thrice won the prestigious Institute of Industry Analyst Relations (IIAR) Analyst of the Year Award and has repeatedly been in the #1 slot in the AR Power 100 list for over 10 years. Ray resides in Silicon Valley when not traveling 500,000 miles a year in the air.