Retail Week Live wrap-up this afternoon and my week of UK retail events is rapidly coming to a close! It has been an energizing and inspiring week. Twitter was trending with #RetailWeekLive for the last couple of days, and I’m proud to say that I contributed my fair share. I had my first Twitter meet-up, which was much more fun (and less creepy) than I expected. And, I connected with many retailers and industry thought leaders.
One of the things that makes Retail Week Live so successful is that it isn’t a two-day commercial for Oracle, Microsoft, or any of the other vendors out there. Sure, the event has big name sponsors and their logos were everywhere. But, what makes the event so good is that almost every session has retailers sharing their telling their stories. This is powerful and worth the price of admission (which is high, by the way).
As I’ve done the last couple of days, let me share my five take-aways from today.
1. The associate’s role becomes more important in the future. Much of the discussion at Retail Week Live focused on the future of retail. On the role of the associate, John Walden, Managing Director of Argos, said, “The store colleague is even more important in the future by adding a personal interaction to a digital transaction.” While the retail press loves to talk about the death of the store, there is no doubt in my mind that there is no one model for the store of tomorrow. Instead, each retailer’s store of tomorrow will be specifically designed to provide an omni-channel experience that reflects their brand. The associate will play an important role in that store but that role will be specialized, unique to the retailer. Training the associate to deliver on the retailer’s unique brand promise will be critical to differentiation between other retailers whether digital or physical. This will increase costs for individual associates and place a new importance on associate retention.
2. Conversations drive more revenue than clicks. Dixons Chief Executive Sebastian James presented data about a typical sale of a laptop in the store versus online. Online, people typically buy just the laptop. In the store, they buy the laptop, laptop bag, software, a mouse and a printer. In short, they spend about twice as much. Even when you subtract the overhead for the store and wages, the in-store transaction drives more than twice the profit than one conducted online! James continually stressed the importance of having associates engage customers in conversations, not hard selling. In the last couple of years, Dixons has reworked their compensation model and eliminated commissions. He said, “We make our money by having quality conversations, not by bullying an elderly woman to buy an extended warranty.” Today, part of an associate’s compensation is based on improved customer service, regardless of the top and bottom line.
3. Customers buy more when engaging the same staff. In the Future Shopping Experiences, Andy Harding from House of Fraser discussed how technology can enable better customer engagement. He explained that Neiman Marcus determined that customers who interact with the same staff member three or more times are ten times more likely to buy than those that don’t. So, Neiman Marcus built a feature in its mobile app that allows customers to find which staff members are working when they come into the store to encourage this type of engagement. This statistic from Neiman Marcus is very interesting and supports the idea that retailers need to work on staff retention to maximize the value derived from repeated interactions with the same associate.
4. Brand globally, market locally. Kenny Wilson, CEO of Cath Kitson, said that his company’s strategy for international growth was to “brand globally, market locally”. This brief phrase summarized what just about every retailer said was critical to global success. Mike Shearwood, CEO of Aurora Fashions, said, “When going global, hire locally and blend your culture with their culture.” The question is how much do you blend. Shearwood said, “Do you want to trade like a UK retailer or a local retailer in a new market? How does that impact your brand?” Wilson said, “If you want to win in an international marketplace, you need to know where you want to be flexible.”
5. UK retailers are innovating. Throughout the week, I was amazed at how much innovation is occurring in UK retail, and the innovation is not dreamy, pie-in-the-sky-it-might-work-someday innovation. It was real, here and now. Things like unattended merchandise pick-up, mobile commerce, and in-store engagement, UK retailers are driving and adopting new ways of doing business.
I’m off to the airport in the morning but I’ll be back in the UK next month. I look forward to catching up with some of my new acquaintances when I do. If you were at Retail Week Live or Retail Business and Technology Expo, I’d be interested to hear your thoughts on the event. Leave a comment below or drop me an email at bclements@axsiumgroup.com.