The Friday after the NRF 2012 event in NYC, the financial media was ablaze with headlines such as, Microsoft, IBM Earnings Drive Dow Up. I couldn’t help but to connect the two: NRF show attendance was way up in 2012 (by RSR’s subjective observations), and technology providers are doing really well. As far as NRF goes, I cannot remember a better attended expo, even with the huge exhibit floor to traverse. In what has to be a first, even the back corners and end aisles — in that past a dead zone for vendors — were teeming with retailers. And most telling of all, the place didn’t empty out at noon on the second day — traffic was high and stayed high right up until the final bell.

As relates to tech vendors doing well: RSR has commented often about the need for retailers to re-invest in their portfolio of IT capabilities to meet the demands of the new consumer-driven marketplace. In a perverse way, the Great Recession might have been a good thing for the retail tech world. Even in the beginning of 2010, the impact of smart mobile and social media on the customer-side of the retail model was unclear. Now it’s as clear as day. And in the meantime, the tech vendors have had the time they needed to make their promises real. So 2012 should be a turning point year for both industries.

And that seemed to be what the buzz at NRF 2012 was all about. Compared to last year’s event, which was full of new customer facing shiny objects to be dazzled by, this year’s expo floor seemed more down-to-earth and… businesslike.

What’s Behind the Interest?

By now, nearly everyone has heard about the change cycle ; there are various versions, but generally it goes from denial through acceptance, discovery, understanding, and integration. As for the challenges and opportunities surrounding advances on the consumer side of retailing triggered by the massive adoption of smart mobile electronics and social media, 2011 started out with an almost smirking disregard (denial), but ended up with retailers recognizing the inevitability to consumer empowerment via these technologies (acceptance). It was only a year ago that one CIO of a prominent fashion retailer (that is currently rolling out iPhones and iPads to its sales associates) told me that his company would never use mobile technology for assisted selling. Oops! Never turns out to mean within the next six months .

Discovery

So with acceptance comes discovery . Retailers at the NRF 2012 event were talking about what it means to their employees, operational processes, and supply chain, when consumers use more than one channel to execute a single purchase with a retailer. Of course, that’s good news for solutions providers, because it’s impossible to address those impacts without information technology.

Several topics fronted the list of interests throughout. Workforce enablement (as opposed to workforce management) was a key focus area on the expo floor, with vendors demonstrating technologies that help employees to be at least as informed as consumers they are trying to serve. To that end, mobile assisted selling capabilities, mobile BI capabilities, and mobile POS were interesting. There was also a focus on management of instore employee mobile devices, especially in the context of BYOD (bring your own device) strategies.

The future of the store itself was much discussed — very clearly, retailers do not want stores to end up merely as a necessary last mile in the fulfillment process. Rather, the focus on the expo floor was on how to blend the digital shopping experience with the physical one, to make the store a compelling destination. Rich content, social media, and e-comm-in-the-store were all featured in booth demonstrations. Technologies such as video analytics were interesting to retailers who want to understand sales floor dynamics such as customer dwell time and employee customer service performance.

Another important discussion that is sure to become a focal point of activity for retailers in 2012 is the impact of new consumer shopping behaviors on the supply chain (RSR gave a well-attended presentation on this topic). Technologies developed to help retailers understand how to use consumers’ cross-channel behaviors to forecast and plan effectively were demonstrated, and judging by booth traffic, hot topics for the attendees.

As an overarching theme, business intelligence and analytics capabilities were on wide display. There were recurring themes between various offerings: the need for near real-time actionable information, customer-focused analytics, graphical user interfaces, and mobile. But the most interesting (and welcomed) focus was on the ability to analyze consumers’ paths to purchase. These are all topics that RSR has focused on in 2011, and will continue in 2012.

Overused-and-Abused

As is so often the case in a buzzword happy industry, the NRF exhibition floor was awash with Cloud this-and-that. Like buzzwords of the past (open , client-server , N-tiered , etc. etc.), the term is so often overused-and-abused that it has lost all meaning. Cloud computing is both a business application delivery model and a software architectural construct, both — not one or the other, and it certainly isn’t your father’s CICS application. Because of the promise of lower initial capital costs and faster speed of delivery, retail decision makers have to look at the capabilities of on-demand solutions. 2012 should be a good year for one thing: as retailers seek to take advantage of the cloud , the marketplace will separate the wheat from the chaff, and there won’t be so much noise about it at NRF 2013.

On to Understanding & Integration

The retail industry has seen big technology-driven changes in the past, and it’s always important to know history in order not to repeat mistakes. It’s our view that the industry is seeing as big a paradigm shift (sorry for using yet another overused-and-abused phrase, but this time it really makes sense!) as that which the industry experienced in the mid-1980’s with the widespread adoption of barcode scanning in the store. Some companies saw the opportunity to exploit data from barcode scanning to scale up their supply chains to hitherto undreamed of sizes, and that fueled worldwide growth and dominance by a few very large retailers (we all know who they are).

Now, the combination of anytime, anywhere information and smart mobile devices has triggered what U.S. Secretary of State Hillary Clinton (whose famous husband spoke at the NRF 2012 conference) has called “The Participation Age “. Just as happened with barcode scanning, the next generation of Winners will likely be the companies who understand the opportunities and integrate the concepts and technologies into their business models first, and define the use cases that other businesses will have to emulate in order to compete. It’s an exciting time to be in retail technology. But one other thing has changed: consumers are driving the agenda, not retailers, manufacturers, or technology companies. Companies need to learn how to participate with consumers — not the other way around.