Satya Nadella of Microsoft opens NRF 2020 Vision: Retail’s Big Show

The future of retail and how technology can help the industry transform
Peter Johnston
NRF Contributor

An overflow crowd gathered Sunday morning to hear Microsoft CEO Satya Nadella deliver the keynote address for NRF’s 2020 Vision: Retail’s Big Show. Nadella was introduced by NRF Board Chairman Chris Baldwin, chairman and CEO of BJ’s Wholesale Club. Citing the show’s record-setting statistics — 40,000 attendees from 100 countries representing 16,000 retailers — Baldwin noted that the industry is alive and well.

And changing rapidly. The massive investments the industry has been making in technology over the past few years are paying off, Baldwin said, notably in the essential realm of consumer satisfaction: 83 percent of customers say convenience is more important than it was five years ago, and 60 percent say retail’s investments have improved their shopping experience.

The massive investments the industry has been making in technology over the past few years are paying off.

That brought on Satya Nadella, whose address focused on the role data plays and will continue to play in the retail industry. Retail is a massive generator of data, he said: 40 terabytes per hour. “What will we do with all that data?”

As an industry, he said, retail will use it to know its customers, empower its employees, create an intelligent supply chain and reinvent its business models.

The major part of this reinvention will rely on steps taken by individual retailers. “The meme of the twenties,” Nadella said, “will be retailers moving to their own tech intensity. It’s not about taking away the art of retail. It’s about building your tech intensity. You can’t be cool by association with a tech friend — you have to be cool on your own. You have to take pride in the digital capability that you have built.”

A crucial key to retail success in the new decade is using technology to support employees. “Giving data to employees,” he said, “is the single most ROI intensive thing you can do. It increases your conversion rate by 15 percent and your satisfaction rate by 10 percent.”

He cited as an example Ikea, which has developed an app that greatly simplifies the way employees rearrange their schedules so as to fit both their own needs and traffic patterns in the stores. In the process, Ikea has cut six levels of administration between the staff using technology and the staff developing it.

Nadella ended his remarks with what amounted to a call to arms. “Today, when you look at online advertising, it’s a monopoly, an oligopoly — pick your word. There’s death, there’s taxes and there’s ever-increasing online advertising spend. There’s not much we can do about the first two, but — depending on the decisions we make now — there is something we can do about the third.

“We have to change the dynamics here. You have to change the dynamics. You have, as retailers, the most valuable asset: commercial-intended consumer behavior data. The question is, how can you, through your marketing efforts, convert that into effectively new online advertising channels that could benefit every brand, every supplier. This, to me, is perhaps what’s needed to reshape retail.”

Watch the complete session from NRF 2020 Vision: Retail's Big Show.

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