A smaller though still significant-sized crowd of retailers, tech firms, vendors, industry analysts and consultants descends on New York’s Javits Center next week for the National Retail Federation Convention and Expo, which returns to its in-person format this year after going virtual last year due to the pandemic.
Organizers said the annual event will have between 20,000 and 25,000 registered attendees, compared to the 40,000 that registered for NRF’s in-person 2020 convention. Down a bit are the number of exhibitors — 775 compared to 825 for the January 2020 live event — and the square footage of expo space — 225,000 square feet versus 275,000 two years ago.
“I feel good about the numbers,” Matt Shay, NRF’s president and chief executive officer, told WWD on Wednesday, discussing the upcoming convention. “There’s lots of fluidity in how people are thinking and in their decision-making about travel plans, but we still have very strong commitment from the retail community, and a lot of enthusiasm and support in New York. It’s a big event.”
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Some who registered could decide not to show up due to the recent spike in the Omicron variant, though the NRF has beefed up health protocols for its convention including requiring attendees to be fully vaccinated and to wear masks indoors. Shay said it will be easier to social distance because the Javits Center has expanded and will have a smaller crowd. In addition, NRF will provide attendees and exhibitors with COVID-19 rapid self-tests, as well as access to PCR tests at the Javits Center. There’s also an improved ventilation system at Javits, hand sanitization stations, and “lots of room to move around,” Shay said. “I feel really good about that environment.”
People will be coming to “Retail’s Big Show,” as the event is known, seeking answers from experts on the big questions of the day. This time around it’s about navigating COVID-19; supply chain challenges and labor shortages; devising pricing strategies amid record inflation; determining the most important technologies to invest in; furthering omnichannel integrations; establishing marketplace formats; engaging in cross-border commerce; raising shareholder value, and corporate social responsibility and inclusion. In a climate of extreme uncertainty, the industry is hungry for insights on how retailing could play out in 2022.
The Big Show is also a networking venue, though given the COVID-19 situation, there will be less of that. NRF’s “Honors” dinner, which raises money for scholarships, has been rescheduled to April 13 at the Marriott Marquis in New York. In years past, the dinner was held during the convention.
Leaders from some of the world’s largest retailers and influential organizations will make their debut on the main stage at the Big Show. That list of keynoters includes Pete Nordstrom, president and chief brand officer of Nordstrom Inc., and several CEOs: Corie Barry of Best Buy Co. Inc.; Nancy Green of Old Navy; Elizabeth Spaulding of Stitch Fix; Rodrigo Bazan of Thom Browne; Arvind Krishna of IBM; Javier Quinones of Ikea U.S.; Vivek Sankaran of Albertsons; Steven Williams of PepsiCo Foods North America, and Amy Errett, founder of Madison Reed.
Other industry leaders scheduled to speak: John Furner, president and CEO of Walmart U.S.; Brian Cornell, CEO of Target Corp.; Patrice Louvet, CEO of Ralph Lauren Corp.; Marvin Ellison, CEO of Lowe’s Cos. Inc.; Mindy Grossman, CEO of WW International, and James Fripp, chief equity and inclusion officer, Yum Brands.
With the exception of a handful of speakers, all of the presentations will be live, said Shay.
The event runs Sunday through Tuesday and corresponds with Martin Luther King Jr. Day on Monday. “We’ve got a whole program on diversity, equity and inclusion. The retail industry is creating opportunities for those from all walks of life to advance in their careers,” said Shay.
NRF’s “innovation lab” has been expanded from years past and features new technologies including artificial intelligence, augmented reality, machine learning, facial recognition, robotics, 3D food printing and more.
The “start-up zone” has been expanded as well, to showcase 49 new companies, and there will be tours of the expo floor, and store tours of Hudson Yards, the American Dream mega retail and entertainment center in East Rutherford, N.J., and Manhattan’s SoHo and NoHo neighborhoods.
“It’s an unusual moment in time because of the uncertainty the Omicron variant has injected into the economy,” Shay acknowledged. Still, “As we look ahead to the coming year, we have very [financially] healthy consumers with substantial savings and spending power, their net worth increasing, and wages on the rise.
“There is reason to believe economic growth and expansion will continue and that retailers will be able to play a substantial role in the expansion,” Shay added. “But that should be balanced against the recognition of some challenges — a tight labor market that’s contributing to wage increases, and overall inflation pressures due largely to substantial demand and stretched supply chains. In the near term, Omicron has made some of that worse. But people recognize the data and science indicating that Omicron is moving through the population fairly quickly without serious levels of illness, hospitalizations or death. We are moving from pandemic to endemic,” Shay said, meaning that it’s possible COVID-19, in a medical sense like the common cold, will always be around.
Based on the information the medical profession has been giving: “We think the Omicron wave will exhaust itself in the next four to six weeks,” Shay said.
Asked what the main concerns of retailers are, Shay cited the tax environment and inflation, and said the NRF has been working closely with the Biden administration on supply chain issues and lobbying to maintain the current corporate tax rate and opposing potential increases in President Biden’s proposed “Build Back Better” agenda.
“The tax reform act of 2017 created a much more competitive tax regime for the U.S. relative to competitors around the world, and made retailers more competitive relative to other industries,” Shay said. “The 21 percent corporate tax rate has given retailers the opportunity to invest in their businesses, make strategic planning decisions about the future, and invest in teams. It’s one of the reasons we have seen retailers perform at such a high level in the last 22 months,” despite COVID-19. “We were paying taxes at the top with the 35 percent rate. The retail industry is healthier now because of the 2017 tax reform bill.”
The NRF is also lobbying for a higher degree of coordination and information sharing among the segments of the supply chain, be it the shippers, truckers or the ports. “The administration can set the tone for that to happen,” Shay said.
“Generally speaking, supply chain trends are improving,” Shay said. “What we are seeing now is related more to Omicron. The supply chain issues won’t fully resolve until after this year. For the coming year, we are still going to experience some imbalance in supply and demand. We have a supply economy built for 3 percent growth on an annual basis,” more or less, Shay said. “But we had 30 percent growth in goods based on container traffic, on a two-year basis. The supply chain has done pretty well in face of this issue.”
On Friday, the government will release its December retail sales report. Earlier this week, Abercrombie & Fitch Co. and Lululemon cited inventory shortfalls in December, dragging down their late holiday sales below expectations.
But Shay suggested the retailers citing December shortfalls were industry exceptions, and not representative of what most retailers experienced. “For the holiday season, many of our members, a substantial number of retail companies, were in much better shape on inventories than a year ago. I think the December retail sales report is going to be very positive.”
Asked where retailers will invest the most in 2022, Shay replied: “Number one is health and safety of their teams and customers and creating a healthy store environment. There will also be big investments continuing in the workforce, in continuing the digital transformation of the business and anything that takes friction out of fulfillment,” including same-day deliveries, curbside pickups and stores shipping orders to homes.
“COVID-19 forced retailers to think differently about real estate and different ways to use stores to engage consumers, for fulfillment, pickup and inventory management. It’s all part of this digital transformation.”
During the pandemic, “The retail industry really stepped up,” said Shay. “Those frontline workers are really the unsung heroes of this recovery. We have seen retailer after retailer invest billions of dollars with increased wages, medical support, bonuses, leave policies. Those investments in the workforce are some of the key reasons retailers have been able to navigate through COVID-19 as quickly as they did, despite the tragic number of deaths and hospitalizations.
“Consumers hopefully have a greater appreciation for the frontline retail workers while managements have always appreciated the fact that retail is a people business. Prior to COVID-19, throughout 2019 and early 2020, wages for the lowest-paid members of the retail workforce were growing more quickly than other segments,” Shay added. “There is a great level of competition for talent and skilled and qualified workers. Those retailers that provide incentives, benefits, compensation opportunities, and career advancement, will be the most successful.”