Michele Dupré


It’s been a tough year for retailers and fashion brands as a fundamental shift in the way consumers shop took hold in 2016 — which was plagued by a distracting U.S. presidential campaign, the Brexit vote and a global economy still stabilizing itself.

Companies are rushing to determine how to adapt to a scenario that is playing out as “evolve or die.” The fallout has ranged from a string of retail bankruptcies to brands cutting back on wholesaling to store closures. Technology has never been more important, resulting in investments in predictive analytics, m-commerce platforms, big data and artificial intelligence.

In this special report, WWD recognizes 10 companies that are helping retailers and brands navigate this difficult landscape, and their key executives in retail and fashion who are leading the charge.

 

Michele Dupré
Group vice president of retail, hospitality and distribution with Verizon Enterprise Solutions

While technology has put the consumer firmly in control of brands and retailing, it also has enabled companies to better respond to shoppers’ ever-changing demands and succeed. But deploying new technology is not as easy as plug and play. It requires strategy and careful integration. Dupré said the “role of technology in the success of a retailer’s operations has been monumental as consumer expectations raise the bar on industry standards.

“And because success hinges on delivering reliable and differentiated customer experiences along with desirable products, effective integration of technology for improving everything from supply chain processes to a retailer’s physical and digital storefronts matters a great deal,” she added.

There are other considerations as well. “Another industry sea change has been the meteoric rise of cyber security from an IT function to a board-level priority,” Dupré explained. “Case in point: security has been elevated in recent years to a C-level function by many retailers, an organizational move that has been beneficial for consumers, a retailer’s brand and the industry as a whole.”

As far as opportunities in the current market, Dupré said retailers and brands might consider taking “a 360-degree view of every operational aspect through the customer lens so that retailers can deliver an experience that lives up to their brands’ promises.”

“In terms of a major challenge, however, the investment in technology is not keeping pace with the funding needed to provide customers with the technology-rich environments they expect,” Dupré added.

 

Stephen Laughlin
Vice president and general manager, global consumer industry, IBM Corp.

To Laughlin, no issue is too complex. Laughlin champions transformative strategies for IBM’s clients in retail, consumer products and wholesale distribution. “We are moving toward the ubiquitous shopping era — shopping everywhere, all the time,” he said. “This has created a significant challenge for retailers to create an operationally sustainable, relevant and engaging experience that inspires loyalty as customers hop from store to web to mobile to social.”

Consumers are a fickle bunch, but Laughlin uses this to educate IBM customers. “[The changes in the retail landscape] necessitate a fundamental change by retailers to transform their businesses from emphasizing transactions to focusing on customer relationships,” he said.

Laughlin pushes IBM customers to roll with the tides, instead of drowning in the rising waters of consumer data. “Retailers have access to more data and information than ever, yet many struggle to gather, harvest and manage their data, and even more have challenges using that information to make better business decisions,” he said.

And Laughlin strives to push aside outdated schools of thought. “Innovation is not a project; it’s a new way of operating and behaving. Innovation requires the willingness to experiment, to invest and embrace failing fast.”

 

Lee Gill
Group vice president, global retail industry strategy, JDA Software

As head of the company’s retail business, Gill is working to expand the firm’s “Go To Market” strategy on a global scale, which includes offering retailers a suite of software solutions to manage inventory, warehouses and its workforce.

“It is no understatement to say that the retail sector is undergoing an irreversible transformation,” Gill observed. “Whilst technology is the disruptive trigger, it is the empowered consumer who is catalyst for change.”

Gill said the new customer shopping journey “is forcing retailers to rethink their propositions. It starts with digital research, which now influences 70 percent of all purchases, with social media playing an active role.” He said an “always-on” consumer, means “24 by 7 shopping, blending together the store and digital experience, in a seamless manner.”

But there are other demands on retailers. “Customers are not only demanding choice of delivery or in-store collection but they want to see the ‘window’ from purchase to receipt, shrink from days to hours — a serious challenge and opportunity for the leaders,” Gill said, adding that online orders and higher return rates are also eating away at profits.

“Add to this higher labor costs associated with handling orders and increasing levels of inventory used to support the digital and physical channels, then you can see challenges to future earnings before interest, taxes, depreciation and amortization,” he said. “It is the compelling need to attack these costs that is fueling JDA’s planning and execution capabilities, into the market right now.”

 

Pat Glennon
Vice president, North American retail and hospitality, Zebra Technologies

Savvy customers call for savvy store associates, noted Glennon. Retailers are playing catch-up — shoppers are nimble and seek in-store and e-commerce experiences that match their agility.

“Providing a stellar customer experience has been important since Day One of retailing. Today it’s about keeping up with your technologically savvy customers and understanding how and why store associates can still provide value,” said Glennon. Physical stores offer a branding venue to align with well-informed consumers.

Agility quite literally calls for mobile checkout options, though multichannel fulfillments present obstacles for retailers. “Optimizing the supply chain for brick-and-mortar retailers to compete with e-commerce players is crucial while enabling execution of in-store fulfillment for e-commerce — including quick and efficient picking of online orders and determining a smooth and efficient in-store travel path,” said Glennon.

From efficient store associate scheduling to eco-friendly locations, store purposes are transitioning. Glennon said, “Today there are new applications and concepts that are pushing the boundaries of technology to ensure more accurate, efficient and timely operations.”

Applications are vital to ensure secure customer checkouts. Technology will only continue to bridge the gap between brand and buyer. “Applications and devices that are purpose-built for an enterprise environment are proving a strong ROI,” Glennon said.
Alexei Agratchev
Chief executive officer and cofounder, RetailNext Inc.

Agratchev is a firm believer in grabbing the low-hanging fruit. For retailers plagued by sinking foot traffic and weak sales in their physical stores, Agratchev often tells clients that the remedy could be something as basic as shifting a merchandise display or reconfiguring a department’s layout.

Sound too simple? Not to Agratchev, who said that retailers armed with data can make changes with little investments that have big impacts on sales and profits. The firm’s in-store analytics are being used by Gander Mountain, Bloomingdale’s and Ulta Beauty, among others, to make informed merchandising and floor-plan decisions, while the company’s other suite of solutions is helping retailers improve overall operations, address loss prevention and improve in-store engagement. RetailNext also offers a “retail labs” program that is designed for companies to conduct simple “A/B” testing as well as conduct pilots for new store concepts.

With online and mobile commerce, sales and engagement continue to grow but Agratchev noted that it is challenging to differentiate a retail brand online. “With a store, you can create something that is unique and hard to replicate,” he said, adding that a well-designed and thoughtfully merchandised store can create an exceptional shopping experience for the consumer.

 

Michael Mendenhall
Chief marketing officer, chief communications officer, Flex

Worlds are colliding in the retail landscape. Online and offline commerce have merged as consumers increasingly research products via e-commerce sites before purchasing items in the correlating physical shop. This phenomenon, “web-rooming” is rapidly evolving as more shoppers look to e-tail for discovery and delight and brick-and-mortar as transaction sites, Mendenhall said. He would know — Mendenhall is responsible for having his finger on the pulse of the ever-evolving shopper for Flex, a sketch-to-scale solutions company that builds smart products.

Customers are hyper-connected, opening an opportunity for smart products. Personalization remains a priority for consumers and the evolution of wearables will likely answer demands. “We look forward to having 50 billion smart and connected products in the marketplace in the next four years — each having cognitive capabilities, thus providing insights.” This will give retailers a step up to better align with shoppers as their tastes only become more diversified.

Artificial intelligence will boost retailers’ quality of consumer engagement, Mendenhall noted. “To address these challenges, retailers must adapt and offer customized, dynamic content and extend unique brand experiences beyond their physical and virtual walls to wherever and whenever consumers demand,” he said.
Rachel Mushahwar
General manager, head of Americas sales: retail, hospitality, CPG, Intel

It’s in her genes. A fourth generation retailer, Mushahwar is now helping Intel work with retailers to develop solutions for the new landscape.

Mushahwar’s vision is imperative for the delivery of actionable strategies to Intel’s partners. “We are living in an era of big data, with all the information we need about individual customer preferences and the dynamics of business operations at hand. The greatest opportunity for retailers lies in data,” she said.”Retailers need to put that data to work, delivering real-time insights to eliminate frustrating out-of-stock situations, personalize ads, optimize inventory and introduce new products.”

As brands and retailers scramble to revise physical store experiences, Mushahwar lends a discerning eye to what will work best. “Combining distribution systems with deeper understanding of customers opens opportunities for retailers to deliver relevant, frictionless, customer experiences. Technology platforms that combine the Internet of things and cloud technologies to connect in-store experiences with back-end supply chains make this transformation possible,” she said.

 

Nick Pompa
General manager at ShopperTrak, a Tyco Retail Solutions business unit

At retail analytics and traffic solutions provider ShopperTrak, Pompa heads efforts to grow the brand globally. In that role, he has seen firsthand — and with data to back it up — immense changes in the market. And at the heart of these changes is technology.

“The retail industry has undergone rapid transformation over the last few years due to the pervasiveness of technology,” he explained. “Shopper behavior, in particular, has radically evolved as consumers are now able to conduct extensive research prior to embarking on shopping trips and endless aisle capabilities further empower customers (and associates) while in the store.

“As a result, shoppers are now experts on products, price and item availability. It places significant pressure on retailers to step up their game across operations, including staffing, training, promotions and inventory.”

Pompa noted that there’s also a greater availability of products in the market via physical stores and through e-commerce sites. And that is putting additional pressure on retailers. To optimize sales, Pompa said retailers need to “leverage data and adapt their operations to be more efficient.”

“And because the technological solutions that enable optimization are readily available (e.g., CRM tools, supply chain management, traffic counting, etc.), there is an enormous opportunity for retailers to evolve,” he added. “Ultimately, brick-and-mortar retailers possess a distinct competitive advantage over online, as the majority of consumers still prefer in-person interactions with associates and products.”

And that requires retailers to “approach their in-store operations in a thoughtful way that effectively meets customer needs and provides an enhanced experience.”

 

Neil Lustig
Chief executive officer, Sailthru

Sailthru works with retailers, brands and media companies to develop personalized marketing experiences with customers across digital platforms such as e-mail, on web sites and mobile devices. And for Lustig, the linchpin of being successful in today’s complicated and challenging market is personalization.

“Personalization is here, embrace it,” he said. “The natural extension of a data-driven retailing is hyper-personalization. It’s been refreshing to see companies like StitchFix, for example, employ an army of Ph.D.s to help personalize selections for its customers. We’re of course excited to see retailers march toward personalization because it just makes sense — the more I understand who you are and how you behave, the more I can treat you as an individual and not a ‘segment’ or ‘cluster.'”

A few of Sailthru’s retail clients include JustFab, Everlane and Country Outfitter as well as The Economist and Business Insider on the media side. Lustig noted an onslaught of challenges facing retailers — especially from behemoths such as Wal-Mart and Amazon. “Amazon has been a thorn in the side of many retailers, particularly those who generate the majority of their revenue through e-commerce,” he explained. “Amazon might say that it has Earth’s biggest selection, but really they’re the world’s smartest logistics company.”

Still, there are opportunities, Lustig insisted, noting that “retention is the secret weapon for new customer acquisition and growth.”

“Sherlock Holmes once said that ‘there is nothing more elusive than an obvious fact,'” he said. “It is a well-known fact that it costs less to retain a customer than it does to acquire a new one, but many companies pay lip service to retention, preferring instead to fill their leaky bucket with new, but low-value customers.”
Matt Laukaitis
Managing director, U.S. retail, SAP North America

Laukaitis is in it for the long haul. Joining SAP in 2004, he has led SAP’s retail division, presenting high-level understanding of client needs and shifting market climates. “In today’s market, retailers must understand customers on a personal level, as individuals and members of a community,” he said. “Winners in the market have been able to use this deep understanding to predict what their customers are going to want, anticipate what that means for their brand, and deliver on the experience better than the competition.”

Hoping to spot trends in their infancy, Laukaitis supports SAP clients as they adjust to new market demands. “The market has been characterized by two overarching trends: how quickly new competitors can enter the market and how quickly new brands can dominate a market.[…]Winners know who their customers are and this enables them to stay ahead of the curve.”

Fluctuating consumer loyalty and an influx of competitors have provoked established brands to rethink infrastructures. Laukaitis isn’t perturbed; instead he finds room for growth. “Challenge and opportunity are two sides of the same coin — speed and agility. We are fortunate to work with many of the winners in today’s market. While they cross multiple subsegments of the retail market, they all share the need to adapt to changing market conditions as quickly as possible,” he said.

Adaptation calls for a clear understanding of what will work. What works is a robust comprehension of the multifaceted shopper.

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