In the most recent session of WWD Studios’ “Thought Leaders’ Lab,” a collection of retail’s innovators gathered in the company’s New York editorial offices. The conversation focused on key points of friction impacting business, and the strategic infrastructure and alignment that retailers and brands must deploy in order to navigate to profitability and customer centricity.
Host Sarah Engel, chief marketing officer of DynamicAction, an advanced data analytics software built for retailers including fashion leaders like Cole Haan, Mulberry, Brooks Brothers and Nine West, facilitated the conversation to get to the core of how innovative retailers are transforming to succeed in the Amazon era. The panelists included: Sahal Laher, chief digital officer and chief information officer at Destination XL; Charlie Cole, global chief e-commerce officer at Samsonite and chief digital officer at TUMI; Matt Corey, chief marketing officer at PGA Tour Superstore, and Elaine Rubin, president of Digital Prophets Network, founder of shop.org and board member for Smart & Final and hint, among others.
The Shifting Landscape
Store closures. Bankruptcies. Layoffs. The retail and fashion apparel markets are experiencing a seismic shift in nearly all aspects of their businesses — from product development, sourcing and pricing of goods to real estate, technology and executive leadership. Retail is reaching for the reset button. A transformation is needed. But why?
Driving this change is the always-on consumer, whose expectations continually shift and grow to search, shop, buy and return in any channel at any time. Beyond their need to keep ahead of their customers’ evolving expectations, retailers are facing new economics of omnichannel commerce, increased operating costs and the ever-looming need to understand, compete with or work with Amazon. Amid this backdrop, the panelists explored some core strategies that retailers and brands should consider to better navigate their own businesses’ transformation processes.
Strategic Leadership and New Metrics
As retailers and brands react and respond to market changes, one thing is becoming clear: traditional approaches no longer produce the results necessary to sustain and grow retail businesses.
Instead, successful companies are pushing themselves to reimagine their businesses. An essential point to this strategy must include a better alignment from the c-suite down to the store employee level. This also requires having an overarching vision and directive centered on authentic and consistent customer engagement.
Moreover, the role of leadership must be reconsidered, which requires understanding and defining the roles of executives like chief digital officers and the need for all retail team members to be digital-first in their thinking. “Digital is like water,” Rubin said. “It runs through everything we do. You can’t say, ‘Digital happens here.’ It happens everywhere in an organization and in a consumer’s journey.”
For his part, Laher said the chief digital officer should be more than just a title. “There are companies that have a great digital strategy without a chief digital officer; it’s really a mind-set,” he explained. “It should be fundamental to the DNA of your brand as opposed to, ‘Let’s check the box of digital.’”
Laher noted that the reason his company created his position was to better articulate its strategy while also “infusing” and embedding it within the organization. However, it also has to be easily communicated.
“Whether it’s a chief digital officer or individuals that can articulate the vision for optimizing the customer experience…in terms, words and phrases for the entire organization — you’ve got to be able to say things in Peter Rabbit English that are simple and relatable,” Corey said.
Fellow panelists agreed, and Laher further noted the importance of using data and analyzing metrics — but making sure to use the right ones. “What gets measured gets done,” he said. “That’s really how it works. We’re measuring sales. We’re measuring profit. So that’s what everybody focuses on. Start measuring customer engagement and touch points as well.”
The Customer Journey and Profitability
The touch points mentioned are critical, the panelists concurred. However, the key is to ensure touch points don’t become pain points for the consumer. To avoid issues, the panelists suggested that retailers and brands quite intentionally place the consumer at the center of their strategic planning and execution as a way to form a meaningful, lasting relationship with shoppers. It is essential for companies to start thinking like their consumers in order to deliver a powerful and seamless engagement from first click to final delivery.
“Customers don’t think in channels,” Laher noted. “But a lot of retail is still organized in a way where stores and digital are siloed as different organizations.”
Laher said shoppers are craving personalization — especially in regard to content, which can be leveraged to boost conversions. “I start with content versus product or recommendations, because I think it’s very important to have that customer connection first and foremost,” he explained. “Everything you do should not be about how to get a sale. It’s really important to build a brand where people understand who you are, your story, what makes you unique and your value proposition. Connect with them on a level that is outside of commerce first. From there, really build that relationship that can get you the customer lifetime value.”
These industry insiders then discussed the role of data and data gathering as a way to develop personalized content. Retailers have access to reams of data on shoppers, but the panelists wondered if they are truly using it in an effective manner.
“Retail has generated a lot of data on consumers, but they often don’t know what to do with it. You need to possess intuition and context,” TUMI’s Cole said, adding that Amazon can offer a lesson or two on culling consumer insights.
“To me, Amazon makes buying easy,” said Cole. “They don’t necessarily make the customer journey easy or better. So, I think our success lies in understanding customers early and the expectations of customers. It’s really simple: Know Me. Once you know me, you can personalize content. You can do all kinds of things to make my experience better and make me want to shop more.”
Corey remarked that there are opportunities for brands and retailers to better serve consumers.
“I think so much buzz and attention gets paid to Amazon,” he explained. “I think people are chasing promotions and trying to figure out free shipping, how to do same day delivery and what is Amazon doing on all those transactional aspects? However, what they’re remiss in doing is actually focusing on the customer experience and the customer’s relationship to their own business.”
At PGA Tour Superstore, customer engagement is a highly personalized and interactive process.
“When they have that really good experience with an expert who custom-fits them for new clubs, or spends 30 minutes in a high-tech simulator to assess their swing and either give them a lesson, help them fix their game or just inspire them to play better — that’s the moment they are in the mind-set to buy,” Corey said.
Cole added, “You combine the ability to get higher-end, specialized products with a really good brick-and-mortar approach, then blended with a digital experience — that is what wins. But you’ve got to map it out. You’ve got to understand what that is.”
Tying together Corey and Cole’s insights, Engel prompted the questions that every retailer must ask: “Who is my customer? How is she shopping? And is she truly profitable?”
“Many retailers think that a 10-time shopper is a great customer,” explained Engel. “However, when you are able to connect, understand and take action on all data across digital and physical stores, you may realize that a customer who seems profitable is actually buying exclusively on promotions and returning more often than not. Knowing what your customer truly wants, how she is browsing, buying and returning in every channel, as well as focusing on what that means to your bottom line, is paramount to growing your retail business.”
Team Alignment and Data Centricity
Transforming a retail business also requires a commitment to aligning the organization with a clear vision from top to bottom. This will require buy-in not only from the chief executive officer, but also from the board of directors. “If you don’t map out the customer journey and explain that to the board of directors and the CEO, they can’t invest in the necessary resources tied to your vision,” Corey explained.
Corey said the digital strategy officer and the marketing teams need to create a unified vision, test it and share the results with the top brass — demonstrating that the customer engagement strategy can generate higher returns. Corey also argued the importance of investing in frontline sales associates.
“Yes, there’s a digital experience that needs to support your [customer engagement] strategy, which helps to make shopping easier and memorable, but that’s the by-product of an experience that’s rooted in people,” Corey said. “It’s no different from our business. When was the last time you walked into any environment and were inspired? Versus, you walk into any store, usually the associate is looking down and not wanting to make eye contact. If you are inspired by an actual human at a brick-and-mortar store, you tell everybody, because, let’s be honest, it doesn’t happen much anymore.”
“Customer journey. Art and science. Islands of data. There are always going to be islands of data if the team isn’t compensated to collaborate via technology. That’s how I think about it,” Cole further noted.
The panelists transitioned to the “base layer” of all forward-thinking retailers: digital must be a “mind-set” that aligns with the overall vision of the brand. Essentially, customer engagement comes down to a clear vision from the top that is executed by well-compensated sales associates and managers in stores, coupled with a superior digital experience that is equally seamless and in-tune with the overarching strategy. However, people within the organization are what will determine success.
“Digital has to work within the guard rails of creative merchandising,” Cole said. “It took me a long time to understand that digital is not the catalyst. This is a service industry.”
The same can be said for data. “Retailers have so much data, they do. But it’s in a format that’s not easy to get to,” Rubin said, adding that sales associates, in particular, aren’t given easy access to customer data to drive more relevant engagement and boost conversions. Rubin then said companies have to consider all of the various touch points along the customer’s journey, not just the store or web site.
“You should map out all your brand’s touch points, there are a lot of them,” Rubin said. “Now try to map out all of the non-brand touch points and places they spend time in their life. Pre, during and post transaction. So, you can collect the data. You can track it down, but how you analyze the data, answer the business questions and create solutions for the customer, is the challenge. A critical new skill set is required of retailers today. Not just data collection and management, but most importantly, drawing relevant insights from the tsunami of data.”
Ultimately, the panelists acknowledged and agreed that technology and data alone do not form a complete strategy, but they can be a true competitive advantage when leveraged correctly. Having technology as a base layer for decision-making and taking action on data quickly to answer customer expectations and protect profit margins is the way in which the new retail winners will emerge.
Furthermore, having c-level buy-in of the transformation needed, a commitment to the vision and agreement on the metrics by which the company and individuals will be measured are the keys to successfully reengineering a retail organization. Most importantly, this vision only thrives and these plans only come to fruition when decision-making centers around the most important stakeholder: the customer.
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