Inspiration on Display at 2018 Retailing Summit
Inspiration on Display at 2018 Retailing Summit
The words “retail” and “status quo” are seldom heard in tandem today. While phrases like “retail apocalypse” and “the death of retail” have made headlines in recent years, one thing is certain: disruption creates opportunity for change and keeps retailers on their toes.
Disruption also allows room for individuals and organizations to inspire—which was the theme of the recent Texas A&M University Mays Business School Center for Retailing Studies 2018 summit in Dallas.
There was something for everyone at this year’s Retailing Summit. Speakers included outdoor and fitness enthusiasts; ice cream, doughnut and coffee lovers; personalized beauty care devotees; and sleep lovers. A talented lineup of speakers from national retail and consumer products companies discussed a range of topics over the two-day event. What were our key takeaways?
Retail is art and science: A mix of finance and design
Michael Dastugue, EVP & CFO of Walmart U.S., joined Dr. Venky Shankar of A&M and our own Ted Vaughan for a discussion about leveraging financial strength for profitable growth. Dastugue, who started his career in public accounting, discussed instances in which critical investments compromised the bottom line. For example, efforts to improve employee satisfaction—including increasing associates’ hourly wages, enacting quarterly bonuses, investing in training and providing 401(k) matches—impacted stock prices.
At the same time, retailers are investing in both customer and associate-facing technology. Search and map apps, for example, show customers where to find a product in-store, while an app for associates might show how products are doing in their store compared to others in the area. Dastugue acknowledged that among a seemingly endless supply of technology and data, it’s important to keep the end goal in mind. While data-driven decisions are critical, the physical store experience and need for human connection cannot be forgotten.
The challenge of balancing financial strength with innovation is forcing some to reassess their strategies altogether. In fact, more than a dozen retailers with 20 or more stores filed for bankruptcy in the first half of 2018, according to BDO’s 1H 2018 Retail in the Red report.
However, Mattress Firm, who just filed for bankruptcy this month, brought an inspirational message to the conference. SVP of Communications & CX, Sunni Goodman, was refreshingly honest in her assessment of the company. She said, “retail is hard, and the one thing you can expect is change.” The cloud of bankruptcy did not affect her enthusiasm for the brand, however, and she’s now inspired to build a stronger business.
During a time when pressure from industry competition and demanding consumers calls for a focus on innovation and scaling up, it’s important for retailers to pay equal mind to their financial management. Only a solid financial foundation will support growth and long-term sustainability.
What customer experience means today
Heightened demand for a high-quality customer experience (CX) and heavy competition from emerging industry players has retailers asking themselves: What makes a customer purchase from us versus a peer, and keep coming back? Without a positive CX, brand loyalty is nonexistent.
During the summit, several firms focused on translating the in-store shopping experience to the online experience and the bottom line was clear: Customers need to be engaged, whether in-person or digitally. At the end of the day, customers don’t consider how a retailer brands itself and whether they’re being serviced by a brick-and-mortar store or e-commerce provider; they care that their individual needs are served regardless of channel.
REI VP Rachel Ligtenberg said that the company puts its customers at the epicenter of their business by making their stores centers of experience. Maintaining that a life outdoors is a life well lived, the brand ensures positive customer experiences by taking deep interest in its field employees, who are on the frontlines of CX.
Amy Eschliman, the SVP of E-commerce at Sephora, spoke about digital being one of the biggest emotional connectors when it comes to customer experience. Because building a client’s emotional connection with beauty is paramount to their business model, they seek to bring that same digital experience into their stores. To do so, Sephora follows their customers’ behavior in-store and online to create personalized omnichannel experiences.
Rebecca Wooters of Citi said that by 2020, CX will overtake price and product as the key brand differentiator. We agree: no matter what your approach, a strong focus on CX is part of the emotional connection that will keep customers coming back.