Monday morning at Retail’s Big Show 2015 began with a lesson on economics.
NRF Chairman Stephen Sadove, sat down with former Federal Reserve Board Chairman, Ben Bernake to discuss Global Economic Challenges and Opportunities for Success.
As expected, much of the keynote revolved around the global economic crisis of 2008, which happened during Bernake’s watch. Bernake said the global economy is now in a state of genuine recovery, and has been for years, but there is weakness in a few major countries. When asked about the USA’s budget deficit, Bernake said, “it’s not a problem – it’s running at 2 to 3 percent of GDP and can run that way forever without hurting anything.” For most retailers the slow but steady climb to economic recovery has been very challenging. Sales have improved but consumers continue to be more cautious with their money.
After the keynote I attended an interesting breakout session titled Global Innovation: The latestest Concepts and Ideas Driving Change.
Neil Stren, Senior Partner, Ebeltoft USA/McMillanDoolittle said retailers must rethink the role of the store. Merchandise needs to be showcased in innovative ways to deliver a bold new experience and stores need to gain more relevancy to today’s consumers. He said stores should be social gathering places, sources of education and information, and promote interaction and recreation with customers. A seamless blend between a retailers offline and online experience is also critical so customers can shop when and how they want.
A great example of rethinking the store to better suit today’s consumer can be seen at Bilder & De Clercq in the Netherlands. Rogier Leopold and Diederik van Gelder, Co-founders of the company, reinvented the age-old food shopping experience around a simple everyday question – “What should we have for dinner?” Their beautifully designed stores are set up to shop by meal recipes, not food type. At each inviting recipe display station, all the ingredients required to create a meal are there along with cooking instructions. Customers simply put everything they need into their basket and if they have any questions about the food or cooking procedures, friendly staff is there to help.
Bilder & De Clercq is replicating its unique store model online as well. It’s building a simple and seamless mobile experience completely aligned with the store. Customers will be able to browse and select recipes on their device, or use a digital display panel installed at their place of work. Ingredients will be delivered (by bicycle of course) or they can go into the store for quick, easy pick up. The stores also have relaxing cafés and the company allows customers to submit and vote on their favorite recipes.
Sounds like a much more enjoyable, educational, personal, and efficient experience than trolling through all the aisles at a supermarket looking for ingredients I need to make the same meals I eat all the time.
Birchbox, a rapidly growing beauty and grooming products retailer, is another company experiencing success because it broke the mold. In 2010, Katia Beauchamp and two friends, Hayley Barna and Mollie Chen, realized a huge barrier preventing consumers from buying beauty products online was the inability to touch and test the products. They decided to turn this problem into an opportunity and launched Birchbox.
Every month, subscribers to Birchbox receive a delivery of personalized beauty, grooming, and lifestyle samples, tailored to their profile. Each box of samples provides a fun and easy way for customers to learn about and try new products. Anything they like in the box they can simply order using their online account.
“It’s about helping our customers discover new products,” said Beauchamp during her presentation. She broke down the customer acquisition process further into: try, learn, and buy. After targeted trials are sent to customers, strong original editorial and viral content follows. That keeps the excitement and momentum going. The company’s web site is also informative and fun and makes purchasing and communications simple.
Birchbox’s innovative and targeted approach to customer acquisition has led to opportunity and growth. The company launched a men’s division, has expanded internationally, and opened a physical store in New York City. And to ensure it stays relevant, it’s now allowing customers to choose their own samples and boxes. “Choice and surprise go great together,” said Beauchamp.
Later in the afternoon, George Lawrie, VP and Principal Analyst at Forrester, moderated a panel titled Retail CIO’s Reflect on Their Priorities and Emerging Technology Trends.
The first topic out of the gate was channel integration. Lawrie said the latest NRF CIO Council survey showed CIO attention has shifted from channel integration to achieving a holistic customer view and experience. Michelle Garvey, CIO of ANN Inc. said the level of difficulty of implementing a brand-centric experience depends on the heritage of the systems and processes in place. Newer retail companies that started with integrated systems and processes have an advantage. Dave Massey, SVP and CIO of Bealls said building data sources and streams, and aggregating the information needed, is necessary to gain visibility of the total customer experience.
Another popular topic was risk management, data privacy, and security. Massey said CIO’s need to look at risk solutions holistically. The IT landscape gets more complex daily. The number of digital assets in every company is rising quickly and the Internet of Things is going to create a whole new set of attack sources. Garvey said IT security is an area of tremendous innovation potential and CIO’s need to constantly stay on top of it. Jim Giantomenico, CIO of Avenue Stores LLC feels the private sector is not necessarily getting as much support from the government as it could. He said governments and industry need to share information about potential threats and that the NRF Security Council seeks legislation that is “fair and equitable” not only for retailers but any company that deals with private and sensitive data. Massey said data governance is also critical. A customer may opt in to sharing data but that doesn’t mean the company can do whatever it wants with it. Misuse kills trust and puts brand reputation at risk. The data has to be used to add obvious value to the customer experience.