NEW YORK — Sustainability, consumer psychographics and technology were among the issues that dominated this week’s National Retail Federation’s 99th Annual Convention and Expo.
This story first appeared in the January 15, 2010 issue of WWD. Subscribe Today.
As befits an industry struggling to regain its equilibrium after the bruising recession, experts who spoke during the conference at the Jacob K. Javits Convention Center here challenged retailers to reinvent all or part of their businesses.
Sir Terry Leahy, chief executive officer of U.K.-based Tesco plc, said his company is underinvested in the U.S., where there are growing concerns about health, diet and sustainability. With just 16 units in the U.S., Tesco’s Fresh & Easy concept isn’t giving Wal-Mart executives sleepless nights, but Leahy said it’s poised for expansion.
“Fresh & Easy is based on a very low-cost operating model; people want to live long and look good,” Leahy said, citing cosmetics, food and fashion as key categories for 2010 and beyond.
Leahy presented 10 management lessons. They included “finding the truth” about your company, which may seem self-evident, but is often overlooked. The best place to find the truth is to talk to the customer — personally, he said. “If you keep on listening, they will actually give you a strategy.”
Vision, values and culture matter more than plans and strategies, he said. “You have to galvanize people around a core purpose. It’s about people coming to work and making small improvements in people’s lives.”
Matt Kistler, Wal-Mart Stores Inc.’s vice president of sustainability, told an audience how the world’s largest retailer has increased profitability while having a positive impact on the environment.
“We set a goal to double the efficiency of our private truck fleet,” Kistler said. “Today, it’s 38 percent more efficient. We delivered 150 million more packages in 2008 and drove 10 million fewer miles for a savings of $200 million. We saved $1.4 million by turning off the light panels on vending machines in our break rooms, which was the suggestion of one of our associates.”
Wal-Mart’s goals include creating zero waste and reducing plastic shopping bags by more than one-third globally. However, only 8 percent of its total footprint is in its direct control.
“We’ve done a good job of convening the industry and communicating with the two million people that come through our stores every week,” Kistler said, adding that Wal-Mart is working to further improve its supply chain.
At a session about top U.S. independent specialty retailers, Gump’s chief executive officer Marta Benson said the San Francisco store has stuck to core values for 149 years. Gump’s specializes in jewelry, Asian art and artifacts, gifts and tabletop items. Sales associates average 10 years with the company and develop close relationships with their customers. One associate was even flown to European to attend the opera with a client.
Pam Majors, founder of the Junkman’s Daughter in Atlanta and the Junkman’s Daughter’s Brother, 25,000-square-foot and 15,000-square-foot stores in Atlanta and Athens, Ga., respectively, has created something of an alternative retail universe with edgy fashion from Japan and footwear from the U.K. — 18-inch heels anyone? — fetishwear and home furnishings.
Majors presides over an empire in which many buyers are artists or musicians. “They’re able to [continue performing] as long as they get somebody to cover their shifts,” she said. “One buyer worked with us until his band got nominated for a Grammy award.”
Majors’ parents started the business by opening a small store in the laundry room of their apartment complex. “They sold airplane tire molds for airplanes no longer in production,” she said. “Dad bought things that fell off trains and trucks. After every holiday, dad would buy seasonal candy from the drugstores. Not having any business training worked well for us.”