Observations from Retail’s Big Show
Insights that can be applied to many verticals
I recently attended retail’s “Big Show” with over 30,000 thousand people from around the world. Keynotes were provided by a very diverse set of leaders including George W Bush, Ginni Rometty (Chairman/CEO of IBM), Bert Jacobs (CEO and Founder of Life Is Good), and Jack Dorsey (Chairman Twitter and Founder/CEO of Square). George W was rather authentic and off the cuff. His topics were more about his experiences as President versus a POV on the industry. He was late and joked about the fact that they don’t shut down New York for past presidents. Ginni was a great speaker and motivator — Big themes were around information as a competitive differentiator (moving from descriptive -> predictive -> prescriptive), use of cloud for business agility, and the evolvement of cognitive reasoning solutions. Bert from Life is Good is an extreme optimist and gives back 10% of all profits to kids in need which I thought was pretty great. Jack is focused on the experience and stressed drawing out your idea, mapping out the timing, and then iterate as fast as possible. The big message around square was using the receipt as a unique publishing platform for the brands. Brands are able to include whatever they would like including social items, incentives, etc. and it can be delivered via whatever channel the customer specifies (text, email, etc.).
This topic played into almost every keynote and breakout session and several points resonated with me. The first was around ownership of customer data and how this is a shared responsibility across business units. Many stressed how costs can be extracted and improvements can be achieved if organizations take a deep look into this from all purviews; from front end marketing to backend supply chain and inventory management. The second was that this is truly never done and no one is doing without challenges. It’s simply an on-going and evolutionary process and all leaders must acknowledge that. There also seemed to be agreement that the unstructured data is a true challenge for every organization. Somewhat related, I remember listening to an interview with Dick Costolo (CEO of Twitter) in which he mentioned an opportunity for someone to create a company that could mine twitter to gain insights — as figuring out algorithms around the lingo/slang/hashtags is very difficult. The third was that 80% of the world’s data has been captured in the last two years. This obviously supports the statement that no one is doing this perfect. One presenter stressed the importance of micro-segmentation of your customer genome and that the flanker categories can be a great opportunity to really drive loyalty.
Applications, API’s and Hypothesis test:
The head of digital for Tom’s Shoes spoke about how they stress the importance of personalization and how they made a significant investment in CRM, which was the engine that brought this together. Due to global expansion, they leveraged the 80/20 rule; 80% of the CRM processes are applicable on a global scale and 20% are local. The CEO of Claire’s spoke and supported this concept through the word “Glocal” which I had not heard before.
Obviously not new on the west coast, but there was also the mentioning and opportunity for Brand API’s and how could 3rd parties extend your brand and build compelling experiences for your customers. Assume the latter will be somewhat difficult for most Fortune 1000, but similar goals could be achieved be creating an incubator within larger organizations where some investments, based on a given hypothesis, may work out and some may not. One of the digital leaders for Toy-R-Us spoke about the fact that they have over 20 test going on at any time and that if they are successful 51% of the time he and other leaders are happy.
It was mentioned many times that we can’t forget about the people, our relationships, etc. Jack Dorsey highlighted the fact that Starbucks ask each customer their name…simple, but very effective. Tom Shoes emphasized the importance of their people that serve local markets. One presenter talked about how Sephora rates and actually measures “customer love” for each store.
The most inspiring presenter was Bert Jacobs from Life is Good. He emphasized the simple fact that we “Get to” do something versus “We have to” do something. He stressed a few statements; “Simplicity is a SuperPower”, “Gratitude is a SuperPower”, “Compassion is a SuperPower”, “Authenticity is a SuperPower”, “Creativity is a SuperPower”, “Courage is a SuperPower”, and “Love is a SuperPower”. He said that a shirt that they made after the Boston bombings said “Boston” on the front and “Nothing is stronger than Love” on the back was their most purchased tee shirt and all proceeds — over half a million dollars, went to fund prosthetics and other needs for the victims. He stressed the obvious point that customers co-author your brand these days.
Merging of work, play and our experiences.
The theme was touched on that our work and home lives are merging more and more and from a retail standpoint we are shopping all of the time — driven by mobile obviously. The head of retail innovation at E-bay stated the fact that 2 out of 3 of us use our phone as an alarm clock. He had a ton of data points. A few highlights were that over 14K cars are sold a week on E-bay, 213 items are sold per minute via mobile, 12PM — 5 PM is the highest engagement on mobile, 6PM — 10PM is the highest engagement on tablets, mobile web sites need to engage within 6 seconds or customers are gone, customers that engage with your brand over several channels spend more than others, and 10% of all in-store Starbucks purchases were done on a mobile device processing over 1 billion in revenue last year.
The leaders from E-Bay and Toys-R-Us talked about the results of an interactive touch screen that was in a Toys-R-Us store that helped customers make a toy decision. 95% of the people that touched the screen went all the way through the process in which a final toy was recommended. A similar example of a large interactive wall that was put up on the streets of New York City in which people could interact and select a Kate Spade Purse. Details may have been missed, but it stated that one in twenty people that walked by actually interacted with the screen. A purse could be delivered to your house within a few hours if you were within a few miles radius of the location in Manhattan. Interesting and compelling opportunities for brand engagement.
From the CEO of IBM to others there was a big focus on the millennial generation from both a customer and employee standpoint. From a customer standpoint one presenter released survey results in that millennials were most focused on online reviews versus quality of store design, overall experience, and associate engagement. The latter items had a higher impact on older generations. According to the results of one survey, my interpretation was that across all segments, instant ownership had the highest percentage on the aggregate with 79% alignment. Reviews were at 59%. The summary was that stores that execute flawlessly, have great design and a great experience are winning due to instant ownership, but the gap is closing quickly. The younger a buyer is, the less important a store is to them. In retail, there is also an opportunity to bring reviews into the store if possible. There was also multiple mentions of the growing Hispanic population and how they are becoming a very important segment, have a high adoption of mobile, etc.
Amazon is the second fastest growing retailer behind Apple and they don’t even want to make money — they only want to expand. They are one of the most highly trusted brands and every retailer better be thinking what their strategy is against them. He stressed that people don’t love Amazon… they trust Amazon!
Hopefully pieces and parts of this were both helpful and insightful.
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