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NRF Balances Issues as It Rebrands

WWD talks to National Retail Federation's Matthew Shay.

Online convergence with brick and mortar, digital adoption by consumers, e-commerce sales tax debates, cybersecurity and organized retail crime. The National Retail Federation has its shopping bag full.

The NRF is taking a bullish stance on online shopping. “The NRF is the voice of the retail industry,” said Matthew Shay, president and chief executive officer of the organization. “It’s inclusive of pure plays and onmichannel retailers, full-price and off-price, luxury and food stores.”

E-commerce will continue play a major role in success. “It’s pretty clear to us that over the holiday season, the difference between winners and losers is that winners were more successful at delivering a seamless and integrated experience across all their platforms,” said Shay. “It’s only going to accelerate. If you’re successfully integrating, you’re winning. If not, you’re going to be challenged. This convergence of brick and mortar and online is going to accelerate. Ten years ago you were either/or. Today you can’t be one or the other. You have to be both.”

Shay said that e-tailers and physical stores are on the same page when it comes to the online sales tax, which was a divisive issue not long ago. “Amazon and a number of other online retailers have come out in support of a solution to the collection of sales tax for online sales,” said Shay. “That speaks to the convergence that’s going on. Digital businesses are discovering they need a physical presence. We think this is going to get resolved one day soon.”

Combating cybersecurity breaches is a paramount concern. At Target Corp., a security breach last year has been blamed for disrupting traffic during the holiday season and might have contributed to Gregg Steinhafel losing his job as ceo. “A retailer’s success in fending off the criminals depends on the company’s ability to make investments,” said Shay. “As retailers get more sophisticated and make greater investments, the criminals do the same thing. It becomes a bit of an arms race.” The criminals won’t go away “unless we can make it impractical for them to steal data because they can’t monetize it. Tokenization and chip-and-PIN cards that render data useless could eliminate demand.

“The next fraud will be based on mobile technology because that’s where we’re headed,” Shay added.
The NRF’s 10th annual organized retail crime survey, released last week, found that the $30 billion a year problem threatens retailers of all sizes and categories. The survey found that 88.2 percent of retailers were victims of ORC in the past year, down slightly from 93.5 percent last year. Although stores are common targets, criminals are now finding ways to manipulate retailers’ online operations. Nearly half the retailers in the study said their online businesses were affected.

Looking ahead to holiday 2015, Shay said consumer income and employment numbers are positive and consumer confidence is higher. “As the year goes on, things are going to improve,” he said. “We’re predicting 3 percent GDP growth for the year, from the current 0.1 percent. Last holiday was a short season. We lost five or six days. That obviously affected sales and many of those sales didn’t get made up. This year will be a very promotional season and people will begin earlier.”

While the retail industry has been changing at a rapid pace, the NRF is changing also. The NRF logo got a facelift, the organization moved to new offices and the Web site was reconstructed. “We needed a refresh,” said Shay. “The previous logo was 20 years old.”