TUCSON, Ariz. — What does it take to ignite the customer experience? A strong mix of technology and a human touch, according to retail, e-commerce and technology executives from Macy’s Inc., Nike, Blue Nile, Whole Foods, Intel, Westfield and Home Depot, who gathered at the 10th-annual Global Retailing Conference at the Loews Ventana Canyon resort here last week.
This story first appeared in the April 15, 2014 issue of WWD. Subscribe Today.
As the economy shifts into recovery and growth, speakers at the conference, held in conjunction with the Terry J. Lundgren Center for Retailing at the University of Arizona, probed ways in which to capture the Millennial consumer now and for the future, using a combination of data, technology and face-to-face interaction.
“If you are not listening to Millennials, you will totally miss the boat,” warned Terry J. Lundgren, chairman and chief executive officer of Macy’s Inc. “We do it through product first.”
Lundgren said Macy’s has picked up market share and earnings have been improving, but “last year was tough and we only gained 2.8 percent in same-store sales, the weakest in the last four years. That’s not good; we have to respond very quickly to change for us all to succeed.”
He added, “It’s OK to admit that we aren’t the best in all categories, engage someone who is, and bring them under our umbrella.” He cited Sunglass Hut, Finish Line and Lids as three retailers he rolled out in Macy’s to help capture the Millennial customer.
Ever wonder what it would be like if your clothes could tweet messages to you? Or to other clothes in your closet or stores? Apparently, some Millennials have. Brian David Johnson, author and futurist for Intel Corp., looks 10 to 15 years ahead to see how consumers will react to ever-shrinking and ever-advancing technology that will soon make it possible to have computers in your clothes, hologram stores, 3-D printing to make seasonal store displays, and mobile delivery via drone.
“Science and technology have progressed to the point where what we build is only constrained by our imaginations,” Johnson said. “Think about sentient stores, that can understand who is in store, what is going on, increase efficiencies. The store itself becomes an extension of who you are and who your business is.”
For Hointer founder and chief executive officer Nadia Shouraboura, stores can use technology now to improve the consumer experience and capture more sales. Prior to founding her software solutions company, Shouraboura worked on Wall Street, then at Amazon and also opened three of her own apparel stores to closely study the consumer experience (during this time, she also worked as a sales associate at Levi’s and Nordstrom to glean further insights).
“The stores were beautiful but some things kill experience: waiting, trying on clothes, finding sizes. How could I use tech to quietly make the shopping more pleasant?” she asked. Shouraboura implemented technology in “experience areas” in her stores that delivered items to dressing rooms and used mobile checkout and delivery. “The cost of running the store goes down because I use a lot less floor space, no clutter in front, all items in back. My associates are not busy with repetitive tasks like folding; they are talking to customers and adding items. Inventory costs get lower because when they mobile shop they can see where items are and know they will get them the next day.” The experience will be launched in a London department store and a high-end shoe store this summer, as well as a fast-fashion chain in Singapore.
After the presentation, Lundgren approached her about trying it in Macy’s as well. “I have spent time in your shoe department in Herald Square,” she told him. “I was waiting too long. Just give me a small section of your store and we can try.” Said Lundgren, “I want to focus on my stores and I’ve been taking a lot of notes. I’m open to working with the presenters here as well as some attendees. I’m keeping my mind open because I’d rather try and fail than not try at all.”
Michael P. Kercheval, president and chief executive officer of International Council of Shopping Centers, called shopping centers the place where people spend the most time after work and home. “The Internet does not provide that, but it is a tool that helps facilitate that,” he said. He spoke with Westfield’s global chief digital officer Kevin McKenzie about how to integrate technology into shopping centers to drive traffic to retailers.
“We are doing a bunch of pilots around the world to make experience in our retail partners really great for the consumer. They can plan a trip before they come — search inventory, get real-time information about products. There’s also way-finding and mapping, hands-free shopping, delivery to car or home, improved food-court experiences,” said McKenzie.
“If retailers are selling less in the mall stores and they are becoming more showcases, it’s hard for a landlord to know what sales are. How do you envision rents for the future?” Kercheval asked him. “If you aggregate an audience and facilitate commerce, that entity needs to get paid. In digital space that is reach, frequency and transactions. Every program we create to connect the dots — if it creates commerce before, during and after — we should get credit for,” said McKenzie.
Ken Langone, cofounder of Home Depot, said “I’m all for technology, but I’m fearful we will lose sight of the human touch and its true value. Nothing will ever replace it.”
He needn’t worry. T-shirt retailer Life Is Good stressed the human connection as the key to its success. Cofounder Bert Jacobs, who began selling T-shirts in parking lots 20 years ago, traced the company’s growth to the customer’s reaction to the feel-good message of their graphic tees. He built the relationships organically through festivals and philanthropy. Today, the company gives 10 percent of its $100 million volume to charity. “Love is the greatest currency,” he said.
Bobbi Brown, who closed out the conference, said she used both in equal measure. As the newly appointed editor in chief of Yahoo Beauty, she plans to offer master classes via video and share women’s stories through a host of guest writers. “I built my brand wanting women to feel and look good. I make it happen in my office, in stores and online.”