Executives from companies as diverse as Walmart Inc. to Farfetch trekked to the Cowen and Co. annual “Future of the Consumer Conference” in Manhattan to compare notes Tuesday and talk about, well, the future.
Gauging from their comments, tomorrow will be an amalgamation of all of today’s buzzwords.
It will be digital. But also local. And filled with omni experiences. And engaging platforms with hard-to-find looks.
One retro theme that reemerged was an emphasis on the store. The Internet is very clearly as important as ever, but retailers also seem to be relearning the virtue of their bricks-and-mortar.
Janey Whiteside, Walmart’s executive vice president and its chief customer officer, doubled down on retail.
“What sets us apart is we’ve got close to 5,000 stores,” she said. “We are within 10 miles of 90 percent of the population….Nobody has that brick-and-mortar footprint, and that is a unique differentiator for us. And our capacity to create integrated solutions to leverage that brick-and-mortar presence to be able to allow people to interact in those stores and online…sets us apart.”
File it all under everything that’s old is new again — maybe just with a twist.
Here is what retailers looking into their crystal balls, and their own sales reports, reported to the Cowen conference.
Janey Whiteside, Walmart
Whiteside’s job title itself — chief customer officer — is a sign of where retail is heading. In the-not-too distant past, retail was much more focused on distribution, knowing that shoppers more or less had to come to a store to buy. Now, with the web grabbing more and more market share, stores are romancing customers more than ever.
“I did a lot of reflection about what it meant to be the first chief customer officer and why Walmart would have one and what it would mean,” said Whiteside, who joined the retailer last year. “This is about how do we create the right series of consumer experiences for the Walmart customer.”
That starts with understanding that shoppers are creatures of both the physical and digital worlds. “The ultimate piece is the recognition that there’s only one customer,” Whiteside said. “And we have a lot of conversations with people. They talk about the online customer, the store customer. There is a store customer and an online customer.
“There’s one customer,” she said. “If you think about in a way that any of you interact, I’m sure you buy things in stores and you buy things online and you may also buy things via voice commerce or conversational commerce or text commerce, but you’re still one customer. And the more that we can treat you as one customer, the more that we can connect all the aspects about you and make sure that you’re having an interconnected experience.”
Tara Simon, senior vice president, merchandising, prestige beauty, Ulta Beauty
As much as retailers have changed over the past few years, they’re not done yet. Stores are chasing shoppers who are anything but static.
“The consumer is changing,” Simon said. “She is very demanding — he or she — there’s so much information out there. Consumers can learn a tremendous amount about what’s in the marketplace, what they want, what they need, how to do it and they expect [a lot] from us. They expect lots of newness, they expect exclusivity, they want it first and they really rely on us to deliver that.”
While replenishment is definitely part of the company’s business, Simon said “about 84 percent of sales were comprised of items that the customer had not purchased in the previous 12 months.” She said it was Ulta’s job “to understand and leverage this mindset to drive more share of her wallet.”
One way to do that is to stick with what works. Asked about Kylie Jenner’s break-away business, Simon said: “We are going to continue to evolve our assortment with Kylie. We, just a few weeks ago, brought in more makeup products, palettes, more lip kits, so that’s going to continue to change throughout the year. And if it’s important to Kylie, it’s going to be important to us.”
Erik Nordstrom, Nordstrom
Nordstrom’s upcoming Manhattan women’s flagship, set to open in late October, will be “a great example of our focus on local markets,” Nordstrom said.
He also said the women’s flagship will be the company’s “most technologically enabled store with a lot of services we haven’t announced yet that we are working on.”
The 320,000-square-foot, seven-level Nordstrom women’s flagship will be located at 225 West 57th Street at the base of Central Park Tower, which, with 95 floors, is the tallest luxury residential building in the world.
Across the street, Nordstrom has been operating its only men’s specialty store for a year.
So what has been learned so far from the Manhattan men’s experience? First, according to Nordstrom, business has been very strong in designer lines and Topman, the trendy U.K. brand Nordstrom sells in many locations and online.
“We have from Vans to Valentino. That breadth is important to us to create an inclusive, welcoming environment,” Nordstrom said.
The retailer’s express return service, enabling customers to return online orders to the store, is also a hit. According to Nordstrom, the majority of customers would rather drop off a return than mail it back. It makes a “significant difference” to get returns back as fast as possible, Nordstrom added.
Nordstrom has also learned that each month, women make up about 50 percent of shoppers in the men’s store; that customers are responding to experiences like the Murdock London barbers, and 24/7 buy online, pick up in store, and that women tend to use the men’s store as “a service hub.”
John Veichmanis, chief marketing officer, Farfetch
The Farfetch formula calls for a distinct breed of shoppers: they’re affluent men — and some women — in their late 30s, who love fashion and spend hours rummaging the Internet for new styles and hard-to-find brands.
“This particular group really wants to buy luxury online,” Veichmanis said.
By 2025, nearly 25 percent of luxury products will be purchased online, he said. But unlike earlier generations of virtual shoppers, luxury consumers aren’t buying things via the web out of convenience. This batch of shoppers is looking for something new, something no one else has.
“It’s the opposite of Amazon to some degree,” Veichmanis said. “Amazon shows you what other people are buying. Our customers are the opposite. They don’t want to buy what everyone else is buying. It’s about finding those individual styles.”
The sheer overload of content makes the problem twofold: There are more options to choose from — such as social media and traditional marketing campaigns and personal recommendations — but consumers aren’t engaging the way they used to. Luxury shoppers spend between one to four hours each day researching fashion they love, but they do it a few seconds at a time. Like on the side of a bus, or in an advertisement attached to an e-mail, or through their social media feed.
“Having a billboard in Times Square doesn’t work if consumers are engaging in micro moments,” Veichmanis said.
Instead, he said the key was to offer a high frequency of varying images in small doses. That is, many tiny interactions with the brand that offer different images to different consumers. This helps people, who Veichmanis said often research and buy in phases, make purchasing decisions.
“We have a huge need for content,” he said. “Typical ad formats, where we create a huge ad campaign and keep saying the same message over and over again, doesn’t work on a luxury platform.”