2014 Retailing Summit highlights change, millennials, risk taking and consumer-generated content

“The Center for Retailing Studies hosted the annual Retailing Summit on Oct. 2-3 at the Adolphus hotel in Dallas. During the two-day accelerated learning forum, more than 275 C-suite executives, industry leaders, entrepreneurs and rising professionals were pressed on the topic of CHANGE! by representatives from Starbucks, Barnes & Noble College, RetailMeNot, Salvatore Ferragamo, GoldieBlox, Kurt Salmon, Nordstrom, Walmart and Frito-Lay.

Starbucks’ growth journey and the impact on the global supply chain

Jump-starting the 2014 Retailing Summit, Steve Lovejoy, SVP of Global Supply Chain at Starbucks Coffee Co., outlined the company’s position as a continually innovative brand, striving to maintain a creative culture.

Spanning an international presence of 21,000 stores, Starbucks’ 300,000 employees serve over 70 million customers a week with help from 16,000 suppliers, one person, one cup and one neighborhood at a time.

The company also upholds its mission statement by following a “”blueprint for growth”” that includes acquiring new businesses, introducing new beverages (Refreshers), experimenting with new foods in stores and more recently, introducing the concept of Starbucks “”coffee trucks”” on university campuses.

Lovejoy works specifically in the China and Asia Pacific region, combating issues of food safety and quality control, while managing consumer expectations in-store and online.

The coffee giant has plans to drive performance with its new plant in Augusta, Ga.; supply chain integration with Starbucks’ subsidiary companies, La Boulange and Evolution Fresh; local relevance; new store formats; local roasting and capital investments.

Capturing millennial attention: Why retail resonates

Utilizing data from a recent study conducted by Barnes & Noble College with more than 3,000 student respondents, SVP of Marketing and Operations Lisa Malat shared remarkable statistics regarding the effects of millennials within the retail industry.

Future predictions slate millennials will make up 50 percent of the workforce by 2020 and 75 percent by 2025. This generation will be heavily responsible for supporting the economy, in both jobs and spending.

However, data has also shown a decline in retention of those working in the retail industry post-graduation. Less than 1 percent of students will pursue a full-time career in retail.

Companies must now find a way to increase engagement with the 63 percent of millennials working in retailing while they have a chance.

Malat listed three ways for leadership to best achieve this:

Share the big picture with your employees
Give them the opportunity to seek ownership and responsibility
Be intentional about leadership development

As proof of Barnes & Noble’s “”formula for success,”” 80 percent of participants in the Bestsellers Management Program will be employed with the company one year from now. Those who attain a senior management position will average 15+ years with Barnes & Noble College.

But, as Malat put it best, today’s part timers are tomorrow’s future retail leaders. Treat them well.

Going digital and reinventing the mall experience

Joined together in a fireside chat, Debbie Hauss, Editor-in-Chief of Retail TouchPoints, and Steven Pho, SVP of Corporate Development for RetailMeNot, turned the conversation towards the emergence of technology in retail.

Founded in 2006, Austin based RetailMeNot operates the world’s largest marketplace for digital promotions and coupons.

Pho believes that while his company operates solely online, traditional brick and mortar stores will not disappear anytime soon. The retail industry has now been presented with the challenge to creatively integrate and drive traffic to the original storefront.

However, companies must also take advantage of the increased use and development of smartphones.

Unsurprisingly, the average American shopper admitted to checking their phone over 150 times a day with 75 percent admitting to using the phone while in the bathroom. For retailers, 60-80 percent shared they had conducted research on their devices before shopping.

RetailMeNot uses this information to partner with brands such as Kohl’s and Macy’s, to promote their products and services using consumer data through an app like feature, for example, beacon technology and geo-fencing. But now, brands themselves are competing with RetailMeNot for wallet share.

While a customer visits a shopping mall or specialty department, geo-fencing utilizes the Global Positioning System technology to create a radial map of the area they are within. Once the user has subscribed to an app with geo-fencing capabilities, the program will send push notification for promotional offers in the area.

But companies be warned.

While RetailMeNot has collected this data to show a positive response rate to targeted messaging, participation and subscription significantly decreased on the second touch point with more than 300 percent of users opting out and disengaging.

With some messaging, you may only get one chance.

Driving the Ferragamo Business through our A, B, College Station

Together, Vincent Ottomanelli, CEO and Regional Director and Amy Zuckerman, SVP of Human Resources at Salvatore Ferragamo — The Americas, shared the secrets to the historic company’s 100 years of success.

As described, A stands for Associates, B stands for Brands and C stands for Clients.

To ensure top-talent acquisition of associates, Ferragamo uses Talent Plus to strategically evaluate skill sets and personalities for optimum placement in the stores.

The company has also developed an extensive recognition program to reward those who contribute a strong work ethic, teamwork and outstanding sales. Corso Talenti is a development program for associates interested in advancing to an executive position. Candidates are selected based on performance, experience, talent, potential and fit. Super Stelle honors those who have exceeded sales goals and have provided superior customer service by developing unique client relationships.

The Amazon.com story

For the afternoon program, Brad Stone, Senior Writer for Bloomberg Business Week and best-selling author of “”The Everything Store: Jeff Bezos and the Age of Amazon,”” took the stage to offer up his insight on America’s largest online-only retailer.

Across the audience, Amazon was noted as a top competitor, disrupting the retail industry and causing companies to rise to Amazon’s example of change.

Amazon became a pioneer for absorbing every niche of the retail industry starting with bookselling and its Kindle readers. It changed the way we shop, how we read and more importantly, how companies are made.

By maintaining a price advantage through e-commerce, Amazon’s rise could best be attributed to how the company took initial risks. Providing variety, ease, convenience and value, the company set the bar for how retailers should attack the digital landscape.

During the break, attendees were treated to signed copies of Stone’s book.

Disrupting the pink aisle: Rethinking the retail conversation

Adding a bit of entrepreneurial inspiration at the Retailing Summit, Debbie Sterling, Founder and Chief Officer of Fun at GoldieBlox, reaffirmed Brad Stone’s claim that successful businesses take risks.

Determined to break down stereotypical gender roles in a predominantly male environment, Sterling channeled her engineering background and passion for youth to create a reading series starring female heroine “”Goldie,”” integrating problem solving and skill development, using axels, pulleys and building blocks.

Sterling used the internet to promote her idea through Kickstarter, leaving GoldieBlox’s future in the hands of the online community.

And in just a short amount of time, the project was fully funded, raising more than $285,000.

Since its launch in 2013 the demand and consumer enthusiasm for GoldieBlox has skyrocketed, even winning the team a Superbowl commercial spot. Last year, the company was a top seller on Amazon and has international product placement in over 4,800 stores.

Omnichannel = Engagement

Longtime veteran of the retail industry, Tom Cole, Partner at Kurt Salmon and retired CAO of Macy’s, concluded Thursday’s program with a case study evaluation of how retailers can best define Omni channel capabilities.

Because the internet is a powerful tool as well as a threat, brands must be able to tailor content, product and experience, so that it may be widely shared and communicated. Cole mentioned that social media is a platform in which customers and consumers can be truthful about their engagement with companies.

Cole also listed seven steps to be successful in Omni channel:

Secure and communicate commitment from the top
Make one person ultimately responsible for Omni channel transition
Invest heavily in customer analytics, supply chain and IT architecture
Redesign the organization to specify cross channel vs. single channel roles and all their interaction points and processes
Establish clear accountability for inventory within and across channels
Realign P&Ls and KPIs to drive the right behavior
Embrace risk, move fast and stay focused

In more than 41 years of professional experience in the department store, Cole agreed that the single largest change that has affected retail is that the customer now has all the power to push retailers into competition for their business.

Pioneering the digital rush and creating one customer experience

Beginning Friday’s program, Todd Buntin, recently promoted VP of Customer Experience at Nordstrom, shared his rise up the ranks within the 113-year old company, along with goals for his new position.

Realizing the need to establish a connection with consumers from all sides of the purchasing process, Nordstrom developed the “”Customer Centric Strategy.””

With the creation of Nordstrom Rack, businesses opportunities increased and more customers are introduced to the company through the off-price, value-driven channel.

As well, sales associates have much less of an influence on consumers today.

Nordstrom has developed many diverse touch points to connect with an expanded audience including: mobile commerce through Nordstrom.com, Nordstromrack.com and HauteLook.com, a members only flash side acquired in 2011 and Trunk Club, an online personal styling service based in Chicago.

The company has also embraced digital communities as they understand them to be Nordstrom’s best form of advertising. Word of mouth + customer service = social media.

Recently, Nordstrom developed the “”Instalog,”” believed to be the first of its kind for a retailer.

Uniting social media, the catalog, creative and web teams Nordstrom was able to reach new and younger customers by partnering with top social media influencers and bloggers.

For Nordstrom, the aim was – and still is – to break down barriers between traditional and digital worlds.

WALMART AND THE CHANGING RETAIL ENVIRONMENT

As a world leader in retail, Walmart prides itself on momentum, discipline and investment, all factors that make the company successful to many different audiences.

Ashley Buchanan, SVP of Dry Grocery for Walmart, outlined the significant role that attitude and purchase behavior of the consumer can have on the overall customer experience.

Walmart has reported seeing an overall growth in technological change, citing an influx in smart phone usage in-store.

With over 50 percent of customers shopping online electing to pick up in-store, mobile influence has increased four times since 2012 and 74 percent of consumers prefer mobile as their device of choice during their shopping experience.

However, Buchanan also cautioned that retailers will forever be challenged to meet expectations about convenience, price, product selection and shopping experiences to best serve the customer.

He stated that “”ultimately, the customer is in control and we will serve them where and however they want to shop.””

The new age of marketing: The convergence of the consumer and the shopper

Ann Mukherjee, SVP and Chief Marketing Officer for Frito-Lay, rounded off the final keynote presentation at the 2014 Retailing Summit.

Mukherjee began by stating “”growth comes from those who are humble and hungry.””

Second, she mentioned that the U.S. food and beverage industry has begun to slow down, prompting the increase in macro-snack food options. She predicted by 2019, more people will eat out rather than at home.

In the consumer space, there are strong demographic changes and shifts with a rise of the millennial generation and a desire to control the hypothetical bidding process for the customer’s business.

Similar to Debbie Sterling’s talk about GoldieBlox, Mukherjee also hinted that successful companies are the ones that have disrupted the industry.

Examples of energetic and bold risks that Frito-Lay has taken include the Doritos #BoldStage at SXSW, the empowering Lays “”Do Us a Flavor”” campaign and Tostitos’ “”Party Time Anytime.”” Each campaign provided consumer generated content and was primarily pushed out by millennials within the mobile and digital technology space.

However, Mukherjee also emphasized that millennials are not homogenous. It is imperative for retailers to dig into this target market with an open mind.

Along with attention to how different brands interact, consumer demand is the focus of the future.

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Between networking breaks, attendees also heard from breakout session leaders Ted Vaughn, Partner, and Bob Snape, Managing Director at BDO, as well as Matt Schmitt, President and Chief Innovation and Strategy Officer at Reflect Systems.

The 2015 Retailing Summit will be held Oct. 8-9 at the Westin Galleria in Dallas. Visit retailingsummit.org for more information.”