2012 World Retail Congress - In Review
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Our Head of Strategy, Robert Grace, shares how the best retailers are winning.
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2012 World Retail Congress - In Review
- 1. IN REVIEW
- 5. “LEAD THE REVOLUTION, OR BECOME VICTIMS OF THE EVOLUTION” - Philip Clarke, CEO Tesco
- 12. “WHY WASTE A RECESSION” - Steve Sadove, CEO Saks 5th Avenue
- 14. “A thoroughly enjoyable experience for the gentleman.”
- 17. ROLE AS A BRAND DEFINING YOUR IN CONSUMERS’ LIVES
- 19. “Our brand is all about empowering women.” - Gary Hogarth, CEO Agent Provocateur
- 21. 21
- 22. 22
- 24. 24
- 27. 27
- 28. 28
- 30. “DISCOUNTING, A RACE TO THE BOTTOM” - Steve Sadove, CEO Saks 5th Avenue
- 34. 34
- 35. 35
- 36. “As a brand, we want to be able to take care of our customers’ own thoughts” - Marc Bolland, CEO M&S
- 38. 38 500 000 ITEMS IN 6 WEEKS
- 42. 42
- 43. 43
- 44. “THE IDEA OF CHANNEL, IS DEAD.” - Mindy Grossman, CEO Home Shopping Network
- 45. 45
- 47. 47
- 48. 48 “BUILDING A BETTER PRODUCT EXPERIENCE SELLS MORE” 500% increase in sales
- 49. 49 LEVERAGING DIGITAL TO DRIVE SERVICE EXPERIENCE
- 50. 50 $2BN TURN OVER 4,000 STORES “MANIACAL ABOUT TRAINING”
- 51. 51 FOOT TRAFFIC MEASURED HOURLY ACROSS 4,000 STORES TO INFORM THE CUSTOMER SERVICE EXPERIENCE
- 53. 53
- 55. 55 “I’ve seen some amazing retail spaces – but this morning I saw the future.”
- 56. 56
- 59. DIGIT?AL RECESSION PROMOTION OPPORTU ITY SOLUTI N? ENGAGEMEN Not about the best, but the only one
- 60. DIGIT?AL RECESSION PROMOTION OPPORTU ITY SOLUTI N ENGAGEMEN Not about the best, but the only one What helps people, helps business
- 61. DIGITAL RECESSION PROMOTION OPPORTU ITY SOLUTI N ENGAGEMEN Not about the best, but the only one What helps people, helps business Win moments that matter
- 62. THANK YOU Robert Grace Managing Partner: Strategy robert.grace@mcsaatchiabel.co.za 082 527 4149
Editor's Notes
- World Retail Congress an annual gathering of the top brands, CEOs, marketer and influencers in the retail sectorFocus on the key challenges and opportunities retailers are facing today, and how they are winning in todays world2012, held in London in September2013 to be held in Paris
- Over the 3 day event heard from CEOs and leaders from brands such as J Crew, Topshop, Saks, Hamleys etc.The quality and level of speaker was exceptional
- What is clear and of course obvious is that the retail sector globally is facing significant challengesEven in developing markets that are experience significant growth there are cracksThis is the South China Mall <picture>, built six years ago, it is one of the largest malls in the world with 7m square feet of retail spaceObvious from the picture that there is a problem – it is devoid of people and tenantsBecause currently it stands 98% vacant
- One of the CEOs reflected fairly directly on the state of retail and what really is on every CEO’s mind
- But on a more serious note, Philip Clarke summed up the fundamental question thatthese recessionary times demand of every business leader
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- Steve Sadove said it best when it comes to seeking out the opportunity in this economic environment
- One of the ways successful retailers are finding opportunity in the recession is by embracing the experience economyAs consumers seek our greater value (not just better price), brands are needing to be clear about the experience that they offerHackett is a great example of this…
- This is Jeremy Hackett, he dropped out of school to pursue his passion for tailoringWhen we established the Hackett brand he did so with one clear intent: To provide a thoroughly enjoyable experience for the gentleman – not about the product, but the experience
- And this thought informs every customer experienceFrom their stores modeled on an English Country Estate to staff who are told that their role is not to sell, but deliver this experience
- Sales year on year have increased by 24% to 133m Euros
- The other opportunity that successful retailers unlock is to clearly define the role of the brand in consumers’ livesAgent Provocateur is a great example of defining this
- NOTE: A few people in the SA market do not know who Agent Provocateur is, so this is just an image to explain it
- So Gary Hogarth, yes he is a man, defines Agent Provocateur’s role as ‘all about empowering women’A much stronger, high-order purpose than simple beautiful lingerie
- This thought informs the full experience that makes their customers feel empoweredThe stores are styled to look like upmarket Manhattan ApartmentsA glass of champagne is often offered
- Sales are up 20% to $40m annually
- Right down to the iconic Vivienne Westwood design uniforms that have become a signature of the brand (and hotly sought after)Sales are up 20% to $40m annuallyAnd they are set to increase their store foot print from 55 to 100
- The other, and perhaps somewhat obvious opportunity is to simply understand your customers better than your competitorsThe CEO of Hamleys has a unique approach, especially for someone who doesn’t believe in the ‘focus group’
- He spends an inordinate amount of time on the shop floor, watching how his customers engage, experience and shop HamleysAnd when the doors close, he can be found on this knees walking around the store – Why? Because he wants to see the store through the eyes of a 7 year old…the ‘real’ customer
- Zappos are of course held up as the benchmark of delivering superior customer service
- The online footwear retailer believes in the service ethic of its business so much that after a rigorous training course lasting a few weeks for new employees, new recruits are actually offered $4,000 to leave
- And lastly there is always opportunity if you look hard enoughAmerican Girl, the $500m turnover giant, has retail stores all over US selling girls dolls, games and clothing
- And they have tapped into a passion point of any little girl: making sure her doll looks her bestSo they have opened up doll salons, where professional stylist sit your doll down, fit an apron and professional style her hair
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- Retailers that are winning understand that promoting has to be more than just price. Again Steve Sadove said it best, “In any category there is only place for one cheapest. And if you’re not it, discounting is just a race to the bottom.”This phrase was the most re-quoted of the conference.
- So here’s a great example of a brand that understands this shift. Micasa Migros, a furniture retailer in Switzerland, developed a simple promotional device which took a different angle on the good old, tried and tested coupon. But they did something that was so much more engaging for consumers and relevant to their productTake a look at the ‘human coupon’ <play video / next slide>
- The other way brands are starting to be a part of the solution that people are looking for in this age of heightened anxiety, is by taking ownership of the bigger issues faced in societyNothing new here, but the scale and emphasis now being placed on good citizenship is unprecedented. One just need to look at some of the major winners at Cannes in 2012 to see evidence of this shift.But Mark & Spencers are really doing something different and compelling.
- Marc Bolland, their CEO, ex-Heineken, developed a strategy for M&S called PLAN A. The rationale, is that when it comes to doing the right thing for the planet and people, there is no PLAN B.This is a strategy that sits at the very heart of the business
- And starts to inform big initiatives, like their recent ‘Big Beach Clean-up’, encouraging people to get down to their beaches and make a difference
- An interesting comment Marc Bolland made was this <quote>What he meant by this is that when a customer walks through the doors of an M&S, if M&S can be the place that takes care of just some of the concerns, issues and anxiety that consumers feel and have in their daily lives, then they will choose M&S more often vs. their competitors.So seriously has he taken this sustainability strategy, that he has hired an independent board whose job it is to critique and assess M&S’s strategies and initiatives A recent campaign that launched at the time was with the well known celebrity, Joanna Lumley, well know from her days on Ab Fab, who has now become a well respected social activist. Have a look…
- At the time of launching 500,000 items had been shwopped. An amazing success for a campaign that delivered no reward to the consumer, other than an emotional one.
- Another way that brands are successfully being a part of the solution that consumers crave in their daily lives, is to focus on the utility that their brand can deliver, relative to the product or experience they sellUA Cinemas in Hong Kong delivered a unique form of utility, providing a solution to a predicament I’m sure we have all found ourselves in <next slide / video>
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- The head designer of TopShop made an interesting observation when it came to using digital as part of the retail experienceSo this is the all familiar Apple store, similar in format all over the worldWhat’s interesting about these stores, is that apart from the amazing tech you can experiment / experience / play with, the store experience is actually devoid of techLook at the back wall with the old-school printed poster, simple, clear and impactfulThe next slide I’m going to show you is of the Microsoft store, and you can see what happened here…Some Microsoft execs probably walked into the Apple store and said, hang-on we can do this better…
- A pretty similar environmentExcept the walls, plastered with digital, wrap around screens, impressive?But look at the people in this picture, not one of them is looking at this larger than life screen installation. Why? Because they are more interested, in this environment, to touch, feel, play and experience the product. Not a peripheral digital screen.A good example of why it is so important is to understand the role each channel plays in engaging your consumers to drive conversion
- Mindy Grosssman, the CEO of the Home Shopping Network, and recently ranked by Forbes as one of the most influential women in business today, boldly stated: The idea of channel is dead. Powerful words from someone who runs a direct marketing business, where channel is almost a science.But the point here is that you can no longer think ATL or BTL, off-line or on-line. There is no line when it comes to meaningfully engaging your consumers.
- A really simple example is that of Amazon.An online brand & business, starting to manifest itself in the physical world through Amazing LockerA strategy than answers to a simple issue that consumers face: I’m not always around to receive my deliverySo they built Amazon Locker, conveniently located pick-up points where you can select your parcel to be delivered to your most convenient ‘locker’ (this might be at your closest tube stop or shopping centre for instance)Once you receive notification that your product has been delivered, go to your selected locker destination, enter your code and collect your parcel from the locker.
- At times digital solutions over-complicate that which should be very simpleBut when a digital solution is used to solve a real business fundamental it can have significant impactAdidas have successfully trialed a digital solution that solves a basic fundamental which they are now rolling out in key stores, how do you show a broader range of shoes within a limited store footprint environment
- A simple solution that is so totally integrated into the store experienceIf you noticed in the beginning of the video these digital screens are seamlessly integrated and match the physical store environment
- Again, it isn’t about the tech, but the experience, as the marketing exec from Adidas said <quote>And where they have rolled out Adiverse, they have seen a 500% increase in sales
- Digital of course can play a significant role in informing a better service experiencePayless Shoesource is a chain of value shoe outlets in the USA
- And have significant scale with annual turnover of $2 billion from 4,000 storesWhat struck me was what the CEO attributed a large part of this success to: being ‘maniacal about training’Quit a feat for a retailers that has over 4,000 stores
- How Payless use digital is through measuring foot-traffic, hourly, across every storeThe levels of foot traffic are sent through to the head-office who then programmatically inform the service model each store should adopt based on how busy the store is (for which they have a menu of behaviours that staff have been trained on), so for instance:High traffic times: Store layouts are adapted to make more room for people, more people servicing the stock room and tillsLow traffic times: More staff on the floor engaging with customers about new ranges
- Last example and a brilliant one of meaningfully engaging customers in such a simple but meaningful wayC&A Brazil, a fashion retailer, used the power of social media to answer a simple issue that many women face when shopping…have a look <next slide>
- But the darling of digital retail at the moment has to be the new Burberry Store in Regent Street, London – which I’m sure many of you have heard aboutA true merging of the physical and the digital in a way we haven’t seen before
- As one critic said after visiting the store <quote>The video up next is slightly long, it has an intro to the store from the creative director and then a video tour of the store, so I will talk over the video to some of the interesting features of this new retail experience…
- So this is store where digital really drives engagement in the brand, the experience and importantly the productThe store is equipped with over 100 digital screens and 500 speakers, and the largest TV screen in the world at 7m highKey items have iPads which display content unique to that item: it’s provenance, how it’s made, what it looks like in the collectionMirrors around the store seamlessly transform into screens when motion activated givenSome of these mirrors are able to detect the RFID tags in certain products, and when placed next to the mirror will give you more content on that specific itemThis extends into the change room where the RFID tags in certain items of clothing trigger content on the change room mirror to give you more information around that specific itemOne of the most incredible instances of this merging of the physical and the digital are the frequent choreographed audio-visual store take-overs ; at certain times throughout the day the screens and speakers are activated to give the sensation of rain. Because what better visceral reaction to evoke from consumers for a brand that has the trench-coat at it’s very essence.What I found interesting about the intro from the creative director, is that he speaks about this store as being place where you can ‘hang out’; no longer a luxury brand that tries its very best to intimidate, but rather to through open its doors and welcome people into the brand
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape
- So in looking at the conference agenda it was clear that 3 topics would be covered:The recession and how to succeed in these recessionary timesHow to implement more effective and efficient promotionsAnd the ever evolving role of digital in the changing consumer landscape