The main themes throughout the National Retail Federation’s big expo:
Innovation Is Worth the Risk: In and of itself, it’s pretty easy to have predicted that something as broad as “innovation” would’ve been a big theme at NRF. Those prognostications were correct, but it was perhaps a bit surprising how vigorous the support for innovation was, and the near across-the-board acknowledgement of the risk that comes with it. A lot of companies have opened and/or invested in innovation labs, as the startup mentality has permeated through the world of retail, trying to foster a culture where ideas can grow. But many speakers echoed the sentiment of Travelocity founder Terry Jones when he said, “In real innovation, being comfortable isn’t good.” There is inherent risk in innovation, but you often have to lose some smaller battles to win the big ones.
Breaking Down the Barriers: In this ever-changing, dynamic, technologically-dominant retail climate, the companies who challenge previously-ironclad characterizations are the ones who are winning. Titles no longer matter as much as they used to. Retailers shouldn’t think of themselves solely as a consumer electronics company or a food store. A few nights ago, a “retail” company took home a pile of Golden Globe awards for their original television series. Like a fine actor, retailers can become highly successful by not allowing themselves to by typecast. Successful companies are breaking down barriers internally as well, spurring innovation with out-of-the-box hiring and flexible department goals. When the engineering team and the marketing team and the design team meet in the middle, great things can happen.
Your Customer is Your Boss: Shopping has always been a highly personalized experience, but with modern technology and the fact that companies are now always in contact with the consumer—not to mention the focus on the always-connected Millennials, there’s an even greater emphasis on the personal relationship between consumer and brand. Retailers cannot continue to think of customers as market segments or target groups, but rather as individuals. The modern consumer is expecting this type of individual relationship, with access to personalized loyalty programs and promotions, and in return expects to be able to give feedback. The always-on, social customer means more data is available. Social media data is the reservoir, and companies must use this wealth of information to build lasting, personal relationships with consumers.
Adapting to New Realities: Companies are focusing intensely on omnichannel, and rightfully so. The new reality of retail is that with consumers having 24/7 access to the store, a consistent, cross-channel strategy and experience in crucial. Retailers should hope to make the in-store experience as seamless as possible, since customers are likely coming into the store equipped with tons of information about the brand and products. Customer service and in-store associates must have a full understanding of the brand’s channels and how they all interact if the screen-to-store experience is to be beneficial and memorable for the customer. Additionally, new realities in fulfillment are forcing retailers to make big decisions on what they can realistically offer to their customers. It doesn’t make sense for all companies to offer same-day delivery, but for some, it will be worth the attempt.
It’s Not Collusion, It’s Collaboration: A lot of companies are realizing that it might be improbable or irresponsible of them to try and do everything for everyone. These companies are thus seeing the true value in collaborating with other companies to augment their business model. Eileen DiLeo, EVP Stores, Hudson’s Bay Company, said, “It’s not collusion, it’s collaboration. You can’t share the secret sauce, but you can collaborate to be more effective.” The on-demand era is transforming many retailers’ value propositions; Uber is starting to get into delivery, so brands like Cole Haan have partnered with them to experiment with deliveries within hours. Toys R Us partnered with Google Express to offer same-day delivery, and what was a “trial” three years ago flourished into an extended collaboration. Collaborations can be mutually beneficial for both parties involved, and can add a bit of novelty and brand equity to the status quo for traditional retailers.