NRF Lessons: You are What you Buy and More

If you are what you eat, what you wear, what you watch, and what you buy, then surely you are also what you have yet to know and do. What we have yet to hear, see, and feel hold the strands of thoughts and aspirations that open us to new observations, insights, and ideas that we can craft and further refine.

It’s for that very reason I go to conferences like the NRF’s Big Show; to hear the lessons and stories of those I have not yet met, to better understand their pressures and priorities, so that I might think differently, with more creativity and bravery than before. When the calibre of speakers is such that you reflect for days (and weeks) after, mulling over the implications and how you might marshal your own resources to better meet the needs of consumers, you know it was time well spent. I promised a part 2 from the Expo, so here are the next set of learnings for how brands and businesses can transform retail experiences to achieve better outcomes. 

1.     Move from OmniChannel to Adaptive Retail to manage Consumer Flux: The latest research from Nielsen on the US Consumer confirmed that the fluid economy has placed financial strain on shoppers, causing them to shift and re-order their priorities as they balance their bank balances. 90% of consumers have changed how they shop for FMCG in order to manage expenses, and the average household has 4.8 saving strategies that include switching to private label, using coupons, stocking up, and shopping during sales only.

The ability to keenly observe the consumer and have a genuine passion for people and what makes them tick is an urgent talent need for organizations. Understanding and anticipate shifting preferences, thinking about how people have re-evaluated their lives post-covid and what it means when we say ‘we need to meet the shopper’s need across every single channel’ is more easily said than done. I recommend stress testing that in interviews and going beyond the abstract. How we might personalize a promotion to the member who wants savings, versus someone who wants new news about alternative options and why, will be what differentiates the brilliant from the average. Retail data presents an immense opportunity to communicate better, while knowing the best form for that communication (be it Ai chat bot or sales associate), depends upon the need, occasion, and moment. Moreover, how a retailer and supplier collaborate on stock management, and the appropriate mix of promotions to safeguard brand preferences, are also key to shared success.

2.     Commit to the Rigor of Process to make the Connected Commerce Planning & Activation a reality across an organization. My colleagues joke that ‘rigor’ is one of my favorite words, and they’re probably right. The mantra ‘retail is detail’ was instilled in me by one of my first clients, more than 20 years ago, and has stayed with me ever since. I’m obsessed with the details, of being in the weeds and seeing the patterns too. I believe only then can you have the knowledge and confidence to deliver an over-arching strategy that commits an organization to a vision. Whether you’re inspired by Fedex’s five-stage process that moves them through Demand> Conversion>Fulfilment>Visibility>Returns, or your own operating system, the art of collaboration, combined with the clarity of vision, are the foundations upon which to orchestrate better for your future. How your team works with the system of record, supported by Ai, to delve into the why behind demand creation, is as important as the what of demand fulfillment. Having a shared language and understanding of how to best use the latest technologies to enhance conversions is a ‘must’ across teams. As Pacsun shared in their vision for the Future of Retail, the application of technology like RFID (identification that uses electromagnetic fields to identify and track tags attached to objects) can provide new insights into why some apparel items are tried on, but not purchased (versus other items), as well as supporting how we can best enable better location management of items across a store.  When technological innovations can help teams manage replenishment counts, and know their product availability with greater certainty, thus allowing a company to reduce both physical costs as well as the labor resource required for specific tasks, it’s clear that thoughtful change management is very much required.

When major process improvements are being rolled out, all stakeholders need to understand where, with what, and how to refine associated processed. That understanding should extend to the technology platforms and systems too, so that the latest data capabilities can in fact be placed at a team’s fingertips, with usage tracked over time, to fuel improvements and optimizations over time. Just as RFID usage has raised the need for live-coaching of store associates on real-time better management of stock levels, so the need for training on how to use AI to augment the in-store experience to help sales associate have a more comprehensive understanding of the catalogue and stock availability in other stores is also needed. When associates can make better tailored recommendations to each person, so the potential spend that a customer makes can be increased, and satisfaction at parting with those extra dollars can also be maintained. ‘To know me more, is to serve me better’ should be the goal, checking out garden furniture at Home Depot, choosing between rides at Disney Parks & Resorts, or even grabbing the best treats for your pooch at the pet store.

Speaking of cats and dogs, it was in the session on Lessons Learned from Top Leaders Impacting Retail that  Chewy’s CEO Sumit Singh’s shared their mission to be ‘the most trusted and convenient destination for pet parents and partners, everywhere’, and how this directly informed the company’s expansion strategy and offering to include veterinary clinics in physical retail locations. The building out of complimentary services such as OTC and tele-health consulting, and the diversification of products into pet insurance plans allows the brand to provide bundled offers to new growth segments, such as upselling to vet providers, which in turn leads to greater customer lifetime value. This approach to expansive value creation is exactly what my colleagues at Interbrand evangelize, through their concept of ‘brand arenas’. In the case of Chewy, as pet humanization has led to pet premiumization, and the belief that ‘it takes more than food and supplies to raise a pet’, a village of associated services and career has emerged around pet ownership, making pet health an increasingly profitable business. Understanding cultural shifts and consumer trends has always been an essential part of business strategy, for it provides the Why that we can then answer with the What’s and the How’s of technology and service innovations. This brings me my next learning:

3.     Consider Culture as the Ultimate Amplifier of Commerce, and how that changes the work you do, how you do it, but also, how you might unlock new and surprising audiences. Back to the earlier point I made about what you watch as being a signifier of who you are, I’m in agreement with one of the speakers that we’re fast approaching the Minority Report levels of knowing customer’s needs.  But we’re equally in the world of Barbie and Taylor Swift, in terms of connecting powerful voices and iconic brands, and the opportunity to experiment, and trial new brands that hold up the values and belief systems to which you might aspire means that commerce can be the bridge to a version of you that feels to you aspirational today, but is very much a part of your identity tomorrow. That’s the electric effect of brands that understand the power of creativity to shortcut our decisioning through emotions, and the levers that best forge those connections. From music to film, to influential artists, athletes, and creators who can drive commerce decisions, and heighten the volume of transactions. Determining what ‘culture’ means for your brand or organization, and the data signals that will help you measure those cultural shifts will take imagination and effort, but it’s a worth doing.

My final point is a reminder to reflect upon the ethics and responsibility of retail innovations.  As Mark Benioff, Salesforce CEO, reminded us, the business of business used to just be about business.  But times have moved on from Milton Friedman and today, the business of business is to also to do good. Understanding the values that will guide our industry to wield the tools and technology that supports businesses to be better, to improve the state of the world, and not simply another IPO, is the altitude we should seek. I couldn’t agree more.