Packed speaker sessions, rolling news and social media coverage allowed thousands of industry experts to engage in hot button debates during Retail’s Big Show. Here are just five of the issues we found ourselves discussing at the Flooid booth.
Will the number of store visits fall in 2022?
Target CEO Brian Cornell reportedly believes frequency of store and restaurant visits will fall due to inflation. He said: “You’ll drive fewer miles, you’ll consolidate the number of times and locations where you shop. You’ll probably spend a little more eating at home versus your favourite restaurant, and you might make some trade-offs between a national brand and an own brand.” The counter argument runs that two years of lockdowns have left consumers with savings they’d love to spend on experiences such as shopping for luxuries or meals out with friends. Regardless of visit frequency, we believe retailers and hospitality businesses must drive maximum revenue and engagement from every in-person interaction. Omnichannel journey stages such as ordering, reserving and collecting can all be used to add value and promote products.
Should retailers be opening more stores?
Closing stores may save rental and staff costs, but does it damage sales and the customer experience? We believe retailers should invest in physical locations, and that new store formats that blend physical and digital experiences can still drive growth for businesses. Fortunately, the feel from the show seems to concur; many speakers shared their optimism and belief in the ‘store’. For example, Ralph Lauren’s CEO Patrice Louvet, said: “We have the resources to invest in our momentum. We are opening stores throughout the world. Counting boutiques and flagships, we have opened 80 over the past year.” Target also spelled out the benefits of investing in key locations and converting stores into fulfilment centres. At Flooid, we’re having more conversations about new store formats than store closures. Here are some more of our thoughts about new store openings from late 2021, and some examples of retailers investing in new store openings from Susan Reda at NRF.
What should retailers concentrate on now?
There’s a plethora of issues that every retailer is grappling with; supply chain, diversity, sustainability, labour shortages, generational change, digital transformation, and AI / the metaverse to name just a few. Every one of these is urgent, at a time of increased competition, unprecedented disruption and intense pressure on margins. So where should retailers focus first? We say everything begins with the customer. Retailers should start by asking what experience the customer wants, what kind of products they want, and what kind of brand they want to buy from – and then work from that. As Chewy CEO Sumit Singh told an NRF audience: “Customers-first is the number-one operating principle.”
How can retailers ‘compete’?
Several speakers shared their thoughts on how to stand out in a crowded marketplace. Sajal Kohli of McKinsey said: “Data is the new currency of competing.” Peter Nordstrom, President and Chief Brand Officer at Nordstrom advocated becoming a ‘store choice’ for customers through various partnerships. Carla Harris, Vice Chairman at Morgan Stanley, placed a premium on ‘authenticity’. We think successful retailers realize that the old school rules of retail still ring true: to compete you must know your customers, offer them personalized service, and give them what they want in the way they want it.
Is loyalty dead?
New entrants, a globalised (online) marketplace, plus emerging competitive differentiators such as brand purpose and diversity have given consumers more choice than ever before. Can ‘much-loved’ retailers keep their customers close? Or is the only way to compete to maintain total superiority of product and experience? Walmart’s President and CEO John Furner was unequivocal: “Loyalty in retail is the absence of something better. When they find it, they’re gone,” while IBM Chairman and CEO Arvind Krishna suggested a whole new approach to loyalty. He said that rather than the customer being loyal to the store, there’s been a shift to whether the store is loyal to the customer [and] creating an experience the customer enjoys.
++ If you’d like to build a retail business that puts the customer experience first, speak to Flooid. Our single unified commerce platform brings together all touchpoints in store and online, giving you greater control and insight, and allowing you to create the differentiated experiences your customers crave.