TUCSON, Ariz. — When Story founder and chief executive officer Rachel Shechtman asked a roomful of retail executives and students at the Global Retailing Conference Friday who had heard of ComplexCon, few hands shot up. Maybe it was too early for audience participation.
Still, that a room of current and future industry executives hadn’t heard of one of the biggest mash-ups of retail, art, culture, music and sponsorships — which pulled in $20 million to $25 million in product sales at its most recent run in November — perhaps underscored one of the biggest takeaways of the annual two-day conference serving as a think tank for sitting and future retail leaders. That is, inspiration can come from some of the unlikeliest sources and convergence to create entertainment retail is inevitable.
“If you take the fact that people want more for the limited time that they have and you think about the impact of technology over the last 20 years, it takes a lot longer to satiate certain interests or appetites,” Shechtman said. “What I loved about ComplexCon was it was a concert meets a conference meets a food hall meets shopping. And by the way, the shopping’s badass. You have limited-edition product. You have drops throughout the whole thing. You have Virgil Abloh giving a talk and what’s really special about it is it’s democratized. When you take the programming component and you marry it with the human component in the physical world, that’s magic. We had lots of commerce cocktails born online and I think ComplexCon is a sign of the new offline commerce cocktails to come.”
Terry J. Lundgren, whose namesake Terry J. Lundgren Center for Retailing at the University of Arizona puts on the annual Global Retailing Conference in Tucson, said the hybrid concept of ComplexCon is one component of retail’s future.
“It’s this whole convergence of all of your faculties getting stimulated at the same time and I think that shopping centers are changing and evolving to not just be a place where you go buy a blouse or shoes but you go for entertainment,” Lundgren told WWD. “You go for theater. You go for your SoulCycle class. You go for your eyeglass prescription. You go for your food. All these different things are coming together to create a real magnet to draw you in and satisfy all your senses. That’s where we’re all heading and this whole subject of the entertainment side of the retail platform has never been lost on us. We’ve always believed we’ve had to entertain our customers in order for them to come back and shop with us and be engaged. So it all fits beautifully into where we’ve been historically and where we’re going in the future.”
Still, can the model of something like a ComplexCon be applied at mass to retail or to a department store?
“Of course they can,” Shechtman said. “They all can. Westfield two years ago bought a Broadway production company. I would tell all big-box retailers to go buy production companies. Do what you’re good at and if you need certain capabilities, it’s going to be a lot easier to go buy a small event production company than to try and figure it out from scratch.”
Drawing lessons from outside of the fashion world — from something like a production company — or technology, hotels, restaurants and travel for best practices was part of the agenda and timely during a week that saw Bon-Ton Stores Inc. begin store closing sales.
“Always, we have to look outside of our own comfort zone and that’s where we learn the most,” Lundgren said. “We can all learn from being bold and stepping out and trying to find that uniqueness that [Yum! Brands ceo] Greg [Creed] was speaking about to make our brands stand out.”
Creed, who oversees fast-food chains Taco Bell, Pizza Hut and KFC, kept conference attendees rolling in laughter as he showed recent advertising for some of the chains’ products. Taco Bell, specifically, has in more recent years begun to position itself as a lifestyle brand. It’s a feat one wouldn’t necessarily think of for a value-priced fast-food chain.
The company is rolling out a Taco Bell Cantina concept, serving a proprietary brew and includes a location in Las Vegas that will marry couples, of which there have been over 100 so far. Taco Bell earlier this year linked with Forever 21 on a collaboration that was sold out in a matter of days, including a hoodie that was gone on the first day of the collection’s release. There will also be Taco Bell chips on store shelves soon.
“Why would we limit you to having a Taco Bell experience at just a Taco Bell?” Creed asked during his presentation.
Part of the company’s successes, though, have been a laserlike focus on creating relevant brands that Creed said should act as magnets rather than mirror the marketplace.
“What you’ve got to do is figure out what your brands stand for. What do I do that makes me a magnet to attract the people that are actually attracted to my brand?” Creed said. “I think a lot of brands fail because they just basically try to reflect what they’ve been told their target audience is.”
From the travel industry, speakers such as Kian Gould, ceo and founder of AOE, noted an interesting shift now taking place at airports as more and more consumers look to spend money on trips. It’s allowed for an opportunity for technology firms such as AOE that helps businesses — airports in the case of travel retail — build digital marketplaces to capture more sales and larger transactions among the growing passenger class.
Frankfurt Airport, which built out a marketplace with AOE’s help, has seen passengers using its app spend 90 more euros per transaction,with February’s top seller an 8,000-euro Leica camera.
“Digital won’t replace physical retail but we believe that’s where most of the growth potential lies,” Gould said.
Mark Weinstein, Hilton senior vice president and global head of customer engagement, loyalty and partnerships, drilled down into the hotelier’s ever-evolving loyalty program in his talk. Last year the company improved upon its Hilton Honors program by allowing guests to combine their points and money to apply toward a room rate, pool points among multiple loyalty members or apply points as cash on Amazon purchases.
“We’re acknowledging that no two customers are the same,” Weinstein said during the conference. “The right number of options makes it a better experience and a better relationship.”
What’s driving all of this is the reality that good experiences from one business do not live in a vacuum, Weinstein pointed out. When a guest takes an Uber or a Lyft to a Hilton property and has a good experience, for example, that leaves an imprint in their mind of expectations.
“It’s all the things happening around you as a human being,” Weinstein said. “It’s not good enough to be good enough in your category.”
Fashion heavy hitters provided their own reflections of where retail and their own respective businesses are headed, an important topic amid a room partially filled with students all vying to get jobs in the business. The question of what future those students have in an industry undergoing rapid change was posed to former Neiman Marcus ceo Karen Katz.
“There is no question that the retailing industry has to embrace this idea of putting front and forward the need for data scientists and teams of people who can do data analytics and that was the part of the [Neiman Marcus] business that, frankly, 10 years ago certainly didn’t exist and five years ago we were struggling to define what that was going to look like,” Katz said, while sharing the stage with Lundgren. “Customers want to buy, certainly from a luxury perspective, beautiful product and I think that all the data and analytics that go along with that can point us in a good direction but they can’t actually do the selection of that beautiful product and how they’re going to market that product or how you’re going to sell that product. They have to be good storytellers.”
There is a future in retail, but the old modes and measures of the business — such as sales per square foot, as echoed by a few speakers — are on their way out.
“I frame the university around the fourth industrial revolution,” said University of Arizona president Robert Robbins in his opening remarks on the melding of disciplines. “This center is really one of the exemplars of the fourth industrial revolution. We’re moving now from the digital into a consolidation of digital science, biological science and physical science. This is all going to be about data. This is all going to be about why people do what people do.”
Kenneth Cole Productions Inc. founder, executive chairman and chief creative officer Kenneth Cole is steering a company that continues to forge its own path following its 2012 move to go private. Cole, who fielded questions from students and the rest of the audience on everything from data and personalization to social causes, addressed the company’s privatization in part when asked about the company’s promotional cadence and its impact on the brand.
“The reason we went private, which was one of the best days of my life, is because we got to fix the business model, clean up distribution and elevate the quality of everything we do,” Cole said. “And that’s still a work in progress but the point obviously is to have just great product all the time and not have to alter price points.”
Cole, following his talk, said in an interview Friday before catching his flight back home that he was taking away plenty from the conference.
“I learned a lot — how do you engage and empower audiences and how do you evolve the customer experience and speak to them in a language they speak in the place that they are when they want to hear from you?” he said. “There’s a huge amount of consistency and the product is important, but it’s about how you bring product to market.”
While executives across the two days acknowledged retail’s continued challenges in the face of change, Cole summed up the broader sentiment during the conference: “It keeps me inspired because you can’t sit back on your heels anymore. You have to essentially anticipate what’s around the next turn. I think those that are doing that are going to continue to thrive and they’ll figure it out and those that aren’t are going to struggle.”