Exclusive is the new inclusive, and other take-aways from NRF 2019
Posted on by cassie
We were at this years NRF which is the largest retail conference and expo in the world, taking place annually in New York. A great event as usual, and here are our key take-aways from this year’s event.
“NRF takes you to the edge of what is happening and is a crystal-ball for the future of retail” explains Stephen Carey, Senior Account Manager at GOC Retail regarding his experience at NRF. “Retail is in a highly disruptive landscape. As a reaction to the changing face of consumers, there is a massive transition towards creating personalized and curated customer experiences online and instore. Listening to the many industry experts and touring many of the agenda-setting stores, including Reformation and Glossier, reinforced the importance of the customer experience.”
The key take-aways from NRF 2019
#1 Curated Customer Experience
The number one theme of the conference was about delivering a personalised, curated, pre-determined customer experience across your digital and physical channels. Many retailers are giving a great experience online, but are failing to leverage and replicate the value of this experience in store. While it’s essential to get the right retail technology in place to unify the retail experience, sales staff must be trained to ensure that the intended pathway and experience actually happens. The business must understand what that customer experience should be and have the discipline to apply it at all touch points.
As Stephen comments “The best illustration of this for me was at Reformation. This is a company with a strong identity of delivering beautiful fashion with ethical and sustainable ethos. They are a digital-first company, whose showrooms are a physical recreation of the online experience. Shoppers enter the store and simultaneously interact with a curated website, physical samples of styles, and highly-trained staff, who support the “ordering” (as opposed to “sales” process) and add the important human element to a strongly defined experience. When they go into the change rooms, their selection in the right size is waiting for them in a two way wardrobe, and they can continue the process on the website displayed in the changing rooms.”
# 2 Exclusive is the new inclusive
This is all about the democratization of exclusivity. “Exclusive” is no longer the restricted domain of luxury retailers and it has many angles. It might be traditional premium retailers finding ways to attract a broader audience such as men or a younger, less-affluent shopper. Or it might be about creating an exclusivity for more mass-market products by limiting availability or personalising the product.
“At both Glossier, one of new kids on the block in the beauty sector, and Reformation, exclusivity is by no means costly. Its more about offering unique experiences and customised products. Shoppers feel valued and they feel special. Like-wise the leading luxury brands, which are very aspirational, want to attract pay-on-the-day customers for pricey items, but not intimidate and repel the broader market who may take several months to pay off an item.”
# 3 Personalization and customization
This continues to be huge news, and like our first two takeaways is trickling out to mass market. It’s a broad concept and ranges from retailers like Levi’s offering custom fit jeans, R.M. Williams offering bespoke hand-made boots, or Reformation, who offer unique vintage items.
Stephen comments “This is not necessarily about offering highly expensive tailor-made items. It can come down to something as simple as offering multiple lengths in pants or products made in different colours or fabrics. It could be a printed tee. It could be made-to-size business wear that is a small part of a bigger off-the-rack collection. It all brings people into your store. Alternatively it might be about a very personalized and edited buying journey online. Personalized products may be just a way to offer a product that can be sold at a premium, whilst giving the off-the-rack items a more cost-effective appeal.”
# 4 Post-hipster, Post-Millenials, Post-Boomer
The transformation in the market is no surprise to anyone. Retailers are starting to focus and respond to the new customer categories. At NRF there was a lot of talk about these groups. The post-millenials are the game changing upcoming generation – digital natives who are extremely adaptive and responsive and expect instore experiences to give the same excitement and spontaneity as they experience online. But at the same time they want a human and unique experience. They are environmentally and politically aware, they seek out options, and are highly informed. The similar so-called “post-hipsters” are rebelling the overdone hipster characterization – they don’t want to be defined. The post-boomers are the parents of these groups and speak (or try to) the language. They are cashed up, lifestyle-oriented and want to stay young, and are often technologically savvy also.
“These new consumer forces are literally driving the way retail needs to go. All of these groups are dynamic and proactive and will insist that retailers keep up” states Stephen.
# 5 Merge Digital and Physical
A central and consistent message at NRF was around the merging of the digital and physical retail worlds. Retailers world-wide increasingly rely on an online presence, but the savvy digital-first ones will ensure that their physical stores are a tangible and human manifestation of their brand, enhancing the customer experience and driving digital sales. The merging of digital and physical is not just about stores and websites, its about order fulfillment, having a 360 degree view of customers, their behaviour and history, and accurate, clear and deep insight into your business performance.
Stephen reflects, “It’s so important to ensure that your bricks and mortar stores are not a disparate experience from your digital presence. They are a key elemenet of showcasing your brand – the digital world must be tightly integrated with the physical store, and vice versa. This means your staff must be trained to support the pre-determinded customer journey, and all touchpoints across your brand feel the same, and represent your brand flawlessly as ambassadors.”
# 6 What’s your purpose?
In line with todays discerning and savvy consumer, brands need to have a purpose and fully understand and promote that purpose. It doesn’t mean necessarily catering to the vagaries of the latest 18-24 year fad, but it does mean having integrity and pursuing your vision with conviction.
Stephen comments, “Retailers like Glossier and Reformation, who both have a disruptive business model, are succeeding because they are rock-solid on their “Why”, and pursue it with laser precision and integrity. Reformation, for example, understand their ethical, sustainable, unique and beautiful fashion viewpoint 100 percent and it flows through to all their operations. This is not restricted to young female fashion. The same principles apply in any retail sector – casual menswear, baby supplies, cycling goods or auto parts.”
# 7 Beauty is the new hoody
A retail category that is booming is beauty. Evolving out of the cosmetics, lifestyle and athleisure categories, there is a great deal of opportunity and expected to deliver really significant growth. In the same way hoodies have been ubiquitous for a couple of decades, the beauty category is likely to infiltrate many retail areas.
Asked about what he heard about this category at NRF, Stephen responds “I was really taken aback by upward trajectory of the sales forecasts for companies fitting into this broad category. It’s always been a profitable sector, and department stores have long recognised the dollar value of cosmetics, with Saks for example moving their cosmetics off the traditional ground floor. But this is an evolution of that. There was a lot of talk about how the beauty category was a move away from the consumerism of fast fashion, and indeed I heard it referred to more than once as “fast fashion for the thinking woman”. It’s a category that offers a lot of opportunity. There are of course retailers who are already disrupting the area, like new young-guns Glossier in the US or Mecca in Australia who consume a whopping 50% of cosmetics in Australia , but the appeal of the sector will surely dissipate into fashion retailers keen to bring people to their brand.”
# 8 Data-first – Beware listening to your gut
In such a competitive digital-first retail landscape, retailers simply cannot afford to keep doing things based on tradition and history. Any business who hopes to compete in the future will absolutely need to be looking at data – they need to understand a myriad of things – customer behaviour, geographies, store, staff and business performance, as well as trends as they happen.
Stephen is quite passionate about this “It doesn’t matter what kind of retailer you are, but once you are over a certain size, you need to have an accurate and current view of your business and make strategic decisions accordingly. You don’t need to abandon your instinct – this is what informs your persona, but when deciding where to put stores, distribution centres, and focus your efforts, you need to have a real picture. Reformation is a great example of a data-first mid-size business. Starting off as a single vintage online store in California, they have evolved to develop a large online presence, with 40 stores. They analysed the data first, optimized their offering accordingly and then scale through location. Their stores are highly digitalized, so always a source of data, but are likewise very human, with a personal and customised experience. “
# 9 Innovation
Needless to say innovation is a constant theme. At NRF, there was a lot of talk about AI (artifical intelligence), and also quite a presence of robotics – from the usual gimmicky robots to the more tangible use of robotics used in a warehouse or store inventory situation.
As Stephen comments “For me, the innovation message is really about being prepared for what comes next. A few years ago foot-traffic counters and loyalty programs were considered innovative. Today its about the intelligent and automated delivery fulfillment that ensure the right stock is moved to the right customers with the best service. Tomorrow, who knows? But you do need to ensure that your business is prepared to adapt fast to whatever is ahead.”
Stephen wraps up, “NRF is a vast show, sometimes overwhelming and all about the future. While some of the concepts may be daunting to retailers, it does give invaluable insight into what lies ahead. Putting our heads in the sand is not a strategy. Smaller and mid-size retailers or those whose budget is limited, can truly benefit and actually remain competitive by understanding the trends. When you see the way smaller businesses like Reformation and Glossier have stepped up, you realise it’s achievable. It’s a merging of the human side of knowing who you and your customer are, engaging with them in an honest way, whilst leveraging technology to enable you to fulfill your vision”