Microsoft's Satya Nadella touts tech independence at NRF 2020

He called for retailers to forge their own path. Don't expect to be "cool by association with a tech friend," the CEO says.

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Microsoft CEO Satya Nadella opened the National Retail Federation's Big Show 2020 in New York on Sunday, calling for retailers to forge their own path when it comes to how they incorporate technology into their stores and supply chain.

Nadella's tech-intensive keynote served as a fitting opening address for NRF 2020, which featured audacious displays of cutting-edge tools designed to dazzle consumers. 

SEE: NRF's Big Show highlights: Cutting-edge tech, robots, and more (free PDF) (TechRepublic)

"If you think about the needs for the 2020s, every retailer will need to build their own tech intensity. It's not about taking away the art of retail. If anything, it's about reinforcing that core art of retail, the core operational excellence of retail with tech intensity," he told a huge crowd at New York's Javits Center.

"You cannot be cool by association with a tech vendor. You have to be cool on your own. You have to really take pride in the digital capabilities you have built. No press release with us or anyone else is going to do it for you. You will need to build your digital capabilities and trust." 

He used examples like Starbucks, Home Depot, Ikea and others to show how retailers across a wide variety of business verticals have adopted new technology like AI platforms and robots to help their workers deliver on every customer's needs.

SEE: Data analytics: A guide for business leaders (free PDF) (TechRepublic)

Before explaining what retailers should do when it comes to tech, Nadella focused on the current state of play, telling the audience that 31% of the world's GDP involves retail and 40 petabytes of data are generated every hour in the industry. 

According to Nadella, 92 of the top 100 retailers use Microsoft's cloud platforms to power everything from personalized recommendations to same-day deliveries. Brands like Walmart, Canada Goose and Natuzzi all used Microsoft tools to build out innovative capabilities that helped their bring in new customers and wow old ones. 

"Enabling and empowering you is our mission. The expectations have changed, where consumers want the seamless experience. The store experience is extending in a variety of ways," he said, adding that brick-and-mortar stores are still relevant to consumers as long as they are updated to reflect modern times.

"What if you took the entire store and effectively thought of it as a computer. You kind of do that with your website. You do that with your mobile app. What if the physical space itself had all of the computing signal, all of the analytical signal that you now have on your website."

Walmart used Microsoft's Azure to build its IoT cloud platform and power the location services for their mobile app, which allows the store's 275 million weekly customers to pick up items quickly from stores near them. 

Near the end of his speech, Nadella focused on digital advertising and implored retailers to reconsider how they spend their online advertising budgets. Retailers, he said, already had the data they needed to target their most profitable customer bases but were instead allowing middle men to gain access to their consumer information.

Retaking control of data and repurposing it for better use was key to cutting costs and innovating for the future.

"Data is only useful if you in real time can predict something better, can automate something better, or gain an insight. Those are the outcomes you want to drive data. That is the true measure of your success with data," he noted.

"Ultimately, the art of retail still comes down to how the people who work for you, in your stores and in your online operations, are able to drive decisions. Putting the right insights and data in their hands, empowering them, is going to make a difference."

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