NRF Europe – here’s what you missed…
The National Retail Federation (NRF) returned to Paris for its European showcase event bringing together retail leaders and technology specialists from around the globe to share their insights and strategic thinking. Here’s what TRB identified as this year’s things you need to know…
When only a total business transformation will do
Subscribe to TRBWhile stores have been added into the mix for many formerly pure-play digital retailers it has not all been one-way traffic. Consider Debenhams was that predominantly a physical department stores business until its cost base became too high and it has since emerged from its crash with an online marketplace model.
Dan Finley, CEO of Debenhams, says: “The vision is to make Debenhams to retail what Spotify is to music. Being digital-only has a future. We might do [physical] store partnerships or franchises overseas but we’ll be online-only in the UK.”
The new proposition consists of a marketplace of products from 25,000 brands and retailers that is infrastructure light because it does not warehouse any products. “It’s been a fundamental transformation of the business model and it’s worked really well. We’re giving more choice to consumers and therefore increasing the chances that they will buy from us. This gives us more opportunity to win more market share,” he explains.
Finley regards Debenhams as a tech-led business, with technology having played a key part in its transformation. “We’ve completely changed all the technology over the last two years. It’s delivered greater efficiencies,” he says, citing AI as being able to reimagine the merchandising function. “In only minutes we can make margin optimisations (by changing prices), and for 25,000-30,000 brands’ products we can create website content (including descriptions and images).”
The company is also using AI technology to put a virtual assistant into the hands of all its customers that enables them to navigate through Debenhams’ massive product options and hone in on exactly what they are after. “We are seeing much more expansive search terms and questions being asked. As agentic commerce companies monestise their services (through advertising) then it will be an evolution for customers. We’re building the capabilities to react to what happens.”
Technology has also been fundamental to the transformation of Westwing, with Andreas Hoerning, CEO of Westwing Group, stating that the company “shifted from our own tech stack to Shopify” which helped it pivot away from being an online club selling third-party brands and moving to a retailer of predominantly own-label goods.
“Moving from our own stack to a SaaS (Software-as-a-Service) model was a tough decision. As this model as evolved then there have been more off-the-shelf solutions available whereas 15 years ago you had to build things yourself. While the front-end is still handled in-house all the other technology (for the back-end) is SaaS, which simplifies things and enables us to stay ahead with our technology,” says Hoerning.
Utilising this flexible architecture the company has shifted to having 65% of its sales generated from in-house designed own-label products (accounting for 90% of margins) across around 5,000 lines compared with the previous 100% of goods from third-party brands, which delivered inferior margins.
Physical stores give uniqueness to retailers
The renaissance of the physical store continues. Retailers can have all the technology and digital capabilities but in a world that is seemingly gorging on AI it is interesting to see bricks and mortar playing an increasingly comforting role.
This is very much reflected in the ongoing moves by formerly digital-only brands (Direct-to-Consumer) to open portfolios of physical stores. Andreas Hoerning, CEO of Westwing Group, says the homewares group operates 10 stores and although they only account for a mere two per cent of group sales they are helping build a unique business proposition.
“People want to touch and feel products such as sofas – big ticket items. Stores are also good for delivering branding and an experience to customers. They are also a competitive moat that can’t be copied as easily as digital. We used to have 50 photographers [creating our online content] but now we can do it with just a few software tools,” he says.
He acknowledges that digital makes the money for the company and that its powerful social media presence provides its marketing clout but Hoerning says the stores are adding something unique to the brand at modest capital expenditure.
At Aroma Zone there has been even more of a commitment to building out a physical footprint from its original DTC model and it now operates 48 stores in France, Belgium and the UK. Laure Kruithof, retail director at Aroma Zone, says: “Retail stores accelerate brand awareness and customer acquisition. Customers in-store are able to get the information they need that enables them to make the right [purchase] choices. They can talk to experts and advisors and the community can come together.”
The company does not purely look at the store’s KPIs to determine its performance but views them as simply part of the overall omni-channel proposition of Aroma Zone. Kruihof is keen to clarify that the stores are not there for pure theatrics: “Don’t confuse entertainment with experience. Customers want answers to questions in-store and it’s about how you engage more and improve this learning. It’s not about pure entertainment.”
Jesper Magnusson, global head of omni sales & CX at Arket, recognises this scenario and suggests retail in stores is going from transactions to relationship building: “How do you get customers to spend time with you? They don’t need more experiences, they need deeper relationships. We need to be meaningful in people’s lives. It’s not theatre, it is relevance. Physical retail has the unique ability to create trust and build community. Moving from Point-of-Sale to point-of-relationship, that’s the opportunity.”
Data delivering fundamental change
Rather like Debenhams’ with its change of business model there has also been a major overhaul at Polish-based Zabka Group that has moved from a rather staid convenience store to one that attracts a younger audience to its ready meals and hot food-to-go ranges. But equally transformational has been the radical change to its IT infrastructure and focus on leveraging its data.
Tomasz Blicharski, incoming CEO of Zabka Group, says the move has attracted tech talent who have created a solution for running the business much more efficiently. This involved creating data lakes on top of which services have been built such as pricing, assortment and transportation.
The company can now utilise differentiated pricing across its stores and determine where to locate new units. It has 13,000 stores in Poland and is adding 200 per year and also has 300 in Romania, with the objective of 200 new openings per year in the country.
“We’ve also moved to higher margin products and differentiated formats with different ranges. Every single store has its own unique planogram that’s created automatically based on the data,” says Blicharski.
Data is also fundamental to the work that Susan Massicot, head of supply chain at Marks & Spencer Food, has been undertaking to modernise the company’s supply chain involving its partner Relex over the past four years. The objectives have been to deliver data-driven capabilities, with forecasting and allocations all driven by data and no manual interventions in the supply chain.
“By 2023 we had rolled out the solution to chilled foods, which gave us the most benefits, and then we moved onto ambient, then frozen, bakery, loose produce and cafés. Since March 2025 all products have been run on Relex and we’re now onto the optimisation stage, which is the most exciting part,” she says, adding that that this involves looking at operations that still require manual intervention.
The plan is that stores will ultimately have no influence on orders. This utilises machine learning because it has to handle the high level of NPD at M&S, as well as seasonality and also the relatively new phenomenon of viral products that are clearly tough to forecast and replenish.
Bringing disparate data together represents a challenge for all retailers including M&S and one area where it is an especially big challenge is within fashion. Within the ‘Innovators Showcase’ area at NRF Europe was Aristo AI, which seeks to bring together fragmented workflows – with data sourced from across businesses feeding into one unified system. This involves pulling in data from the brand DNA documents through to design drawings, photo-shoots, and integrating this with a company’s PLM (Product Lifecycle Management) system.
Phoebe Gormley, founder of Maeve AI, is also innovating in this space with a solution that also plugs into PLMs as well as sourcing data from fashion retailer’s sales and returns systems as well as using LLMs to identify errors in product designs before production. This can be quality issues on certain materials, higher returns from specific suppliers, and size issues with certain components.
“If you make a bad decision and then make products with it then you have a problem. Once it’s baked into a product then it’s the e-commerce teams who will have to deal with it and discount the products. These micro decisions can make a big difference,” she explains.
Use-cases mount up for ESLs
Over the years the store environment has continued to be a platform for the introduction of a variety of technologies – from self-service tills, smart carts, smart cameras, self-scanning and digital signage and screens – and the one that is arguably having most impact right now is ESLs (Electronic Shelf-edge Labels).
Most of the major UK supermarkets have a current strategy for introducing them into their outlets including Morrisons that has accelerated the roll-out of the devices into its superstores as it has found an increasing number of use-cases for the labels.
Gordon Macpherson, group productivity director at Morrisons, says: “The original premise was to save time, because we have 5,000-6,000 prices changes made on an evening…but as we continue to see online sales grow then we will see how we can use the tech for quick-commerce. We get the benefits when all the tech interplays in-store. ESLs can provide offers, personalisation etcetera. And also having cameras in-store helps us build this out.”
The major surprise for the company has been ‘pick-by-light’ that has been piloted to help colleagues navigate around the store. They are assigned one of seven colours and the label flashes this colour on the relevant product that they need to pick next for the online orders and quick-commerce deliveries they are handling.
Roy Horgan, senior VP for strategy and marketing at Vusion – that supplies the ESLs and infrastructure to Morrisons, says pick-by-light has boosted the pick rate efficiency rate by 10% – with speed and accuracy both improved. The next move will involve giving customer the capability to find products on the shelf via the flashing labels.
After great success by Walmart in the US, Morrisions is to enable shoppers to select a product within the supermarket’s app and for this to prompt the label to flash thereby helping them easily find products in its stores.
Despite the capabilities of ESLs Macpherson says: “There are no plans to dynamically price. There is not a use-case for this but ESLs do give us the agility to match competitors pricing through overnight changes.”
Needless to say Karan Shah, retail solutions consultant at Solum – that manufactures and designs ESLs, is equally dismissive of the labels being used for dynamic pricing although he recognises that it might be better to simply encapsulate this term into the overarching one of ‘smarter’ pricing. Despite ESLs being deployed widely across Europe he says there has been little use of smart pricing to date apart from competitor price matching.
