This year’s National Retail Federation (NRF) Big Show was particularly strong when it came to discussing how to shift your future to meet the needs of your customers. Here are some highlights of the event I thought were particularly interesting.
Main stage speakers
- Changing Face of Retail: Doug McMillon, CEO, Walmart
- Doug discussed the emotional chord their recent announcement to add maternity/parental leave and institute extended benefits to adoptive parents struck across a variety of audiences. He also discussed the company’s plan to put some big dollars toward increased wages, a one-time bonus and employee development.
- This is a people business. How customers feel when they leave your store or website will determine if they come back. Walmart employees are the ones who are working directly with customers so it was important for Walmart to let their employees know they care about them.
- You also need to demonstrate that there is a ladder of opportunity for employees so you can encourage them to advance their careers.
- When asked if “retail is dying” he responded by saying this question underestimates the abilities of the people in the room. What ultimately decides who survives and who doesn’t will be the customer. Customers are rational and are driven by price, assortment, and experience. Beyond value and price, customers judge you with key questions such as did you save me time, did you take the friction out of the process and did you help me be informed about what I am buying? Customers want to know what they’re buying and who they’re buying from.
- How Levi’s Turned Moments into Momentum: James Curleigh of Levi’s Brand
- The vision for Levi’s is to be the most loved and relevant lifestyle brand. After all, as Curleigh noted, they were the original lifestyle brand.
- In a world of difficult decisions, he said, “let us be simple.” Picking out jeans should not be a difficult task for customers. To deliver simplicity, they need to undertake a level of sophistication, both in the supply chain and in the retail environment.
- They will accomplish this by delivering lifestyle innovations such as Levi’s Commuter Jacket that James was wearing on-stage.
- Delivering the expected has never been as important as it is today.
- Rockstar Entrepreneurs and the Next Generation of Retail – Panel discussion moderated by Rachel Shechtman, founder, and CEO of STORY. Panelists included Dan Levitan, co-founder of Maveron; Manish Vora, co-founder of Museum of Ice Cream; Michael Lastoria, co-founder of &pizza; and Marcia Kilgore of Beauty Pie and Soaper Duper. Here’s how they responded when asked to name a company they admire for the future of retail:
- Dan – Katrina Lake, the founder of Stitch Fix. The company uses sophisticated data to help people understand what they like and in a short amount of time.
- Manish – A brand that combines design, community and brand loyalty would be Outdoor Voices. You can tell this by their stores and how their employees interact with customers.
- Michael – There are so many great stories of boutique retail. A local New York brand would be KITH. They created an interesting environment around something as simple as shopping for sneakers – they even serve ice cream and cereal at one of their locations. He felt that in many cases it can’t just be about scalability or profit. It almost must be fearlessly weird to create the kind of phenomenon that will drive long-term success.
- Marcia – One of the most incredible, new, fresh retail concepts to come out of retail over the last few years is STORY.
Exhibitor big ideas
- Building the Future of Intelligent Retail – Toni Townes-Whitley, CVP, Microsoft Industry
- Enabling digital transformation requires four key elements that work together to optimize operations and transform products: (1) a modern workplace, (2) cutting-edge business applications, (3) infrastructure and (4) data & AI.
- It’s critical for organizations to create an on-going digital feedback loop for continual product improvement. Better products drive more adoption and consumption, more adoption drives more data and more consumption generates a signal to improve products.
- The Shoppers Speak: Shoppers Bust Long-Held Myths on Pricing and Promotions. Panel discussion included Cheryl Sullivan, CMO and Strategy Officer of Revionics; George Lawrie, VP at Forrester; Lucas Rauch, Senior Director of U.S. Insights at Walgreens; and Allison Raffalovich, Communications Director of Revionics.
- They discussed a 2017 Forrester study of shoppers’ pricing expectations and tolerances. Below is the point they considered most important:
- Raising prices due to limited availability results in lost sales!
- 59 percent of shoppers would wait and not purchase or purchase from a different retailer
- 31 percent of shoppers would wait as long as it would take for the right price
- 78 percent of shopper’s trust data science to give them a fair price. Only nine percent buy at full price, five percent buy at the first price they see, 17 percent buy the cheapest price and 17 percent demand price matching
- Where Commerce Meets Life for Omnichannel Consumers. Dan Peacock, VP of Product Strategy, FIS Payments
- For anyone who didn’t get to see my presentation, I thought I’d include some highlights!
- Consumers continue to leverage a variety of channels when shopping:
- 7 percent are online-only shoppers
- 20 percent are in-store-only shoppers
- 73 percent use multiple channels during their shopping journey
- Omnichannel customers spend more than single-channel customers
- 36 percent spend more in-store and 23 percent more online
- Omnichannel efforts in place today are just a stepping stone. The reduction in the cost of technology, coupled with continuously expanding data from a growing number of connected channels, will enable us to move from omnichannel to truly anticipatory, highly localized and personalized shopping experiences. (download my presentation here)
Cool things at the Innovation Lab
Technology is transforming retail. Vendors in the innovation lab had “market fit,” meaning they either have full rollout or pilots in place with national retailers.
- “Getting out of your own way: Enabling your company to truly innovate” – The panel included representatives from BEHR paints, Keds and Sonic Automotive.
- Key tenets of creating an environment of innovation include:
- Creating a culture that embraces change
- Having an organization that is aligned to deliver innovation by designing around the consumer – being “consumer-obsessed”
- Providing employees with the necessary resources to deliver change. Organizations have evolved to become good at serving the customer needs of today, but not the needs of the future customer. This is shown by incremental, small innovations on existing products versus truly innovating on what customers will need and want in the future. Understanding future needs and merging all resources around those needs creates a galvanizing force to help create the innovation needed to be successful in the future.
- Key tenets of creating an environment of innovation include:
- “The What and How of Digital Transformation: Three Consumer Expectations to Meet Now” – Panelists include Neiman Marcus and Rainbow Shops.
- Providing a seamless and consistent customer experience – Order online and pay/pickup in-store to solve for a high percentage of customers who use cash. Ensure your online and brick & mortar stores are not two separate entities but are working together to create one image from a customer perspective.
- Understanding the impact of higher customer expectations – Customers want to shop anywhere at any time, so a ubiquity of channels is critical. Organizations must be completely nimble and have a structure that is able to ingest and take advantage of new channels and customer needs.
- Managing customer pain points – Retailers have experienced significant growth in their online stores but, how do you deliver exceptional digital experiences? Retailers need to make sure they provide personalized experiences that solve customer needs.
- “Best of Retail 2020: Emerging Technologies to Transform Marketing and Engagement” – If you are in e-commerce and/or digital marketing, this one’s for you! This session discussed how Roots and Adidas are using advanced technology to connect and market to their customers.
- Instead of purely buying media for a new product launch, Roots hosts and entertains their customers with media by influencing them to learn about a specific product. When they launched their Packable Jacket, they hosted groups of people at an ice bar in downtown Toronto, in addition to buying hyper-targeted media and giving gifts to top Instagrammers across the country. These efforts drove significant increases in sales YOY.
- Adidas described how they classify their projects into three stages:
- Exploring the New – Prototype early-stage technologies to understand capabilities and use cases. This is in advance of consumer or market readiness.
- Testing the New – Pilot and validate early-stage startups that are pitching a compelling solution, but not enough presence in the market to get attention from mainline teams. Are what these companies pitching real or snake oil?
- Creating the New – Mix and match technologies to create completely new experiences.
I will end by recommending that it’s worthwhile to check out session videos and presentations on the NRF website. Each topic is well categorized so you can quickly navigate to those most interesting to you.