The future of retail: experiences, customization and engagement

The future of retail: experiences, customization and engagement

12 takeaways from NRF 2018 Retail’s Big Show, hosted by the National Retail Federation.

January 24, 2018

Image caption: Jennifer Jolly, nationally syndicated tech-life columnist, far right, interviews Tyler Haney, center, founder and CEO of Outdoor Voices, and Marne Levine, left, COO of Instagram, during a session at NRF 2018 Retail's Big Show. Photo courtesy of NRF.

Using technology to better understand customers and to create an ideal in-store and online experience was a major theme that resonated throughout keynotes and educational sessions at NRF 2018 Retail’s Big Show, hosted by the National Retail Federation at the Javits Center in New York City Jan. 14-16. The show featured 150 speakers, more than 700 exhibitors and 36,500 attendees from more than 100 countries. Recurring topics included artificial intelligence and augmented reality, and some of the featured innovations may be more applicable for large international retailers and major chains. However, there was still a focus on the ever-changing retail industry, customers, and what retailers can do to connect with them and stand out in a competitive market. Here are 12 takeaways from the show that are most relevant for independent garden centers:

1. Customers want a personalized, customized experience. This message was echoed throughout the sessions at Retail’s Big Show from companies that offer very different products and services. For Orangetheory Fitness founder Ellen Latham, customization meant giving customers tools for tracking their workouts so they could monitor their effort and make sure they were working hard enough to get results. The company measures clients' heart rates and calories burned to determine the intensity of their workout.

“You cannot improve what you do not measure,” Latham says. “People want to know where [they’re] at.” In order to provide that personalized experience, Orangetheory clients are willing to have one of their vital signs and calories burned projected on a wall that all in the class can see. Customers share a lot about themselves if they know they’ll get a better experience, and that’s also been the case for FabFitFun, said David Oh, chief product officer and head of growth. The subscription box company (and magazine) delivers $200 worth of health, beauty, wellness and fitness products to members for a fourth of the cost four times a year. Members can either select items from what’s available or fill out a 160-question onboarding quiz if they want the contents to be a surprise, but still something they want.

“You can reward yourself and gift yourself, and it will be a surprise as well. That’s a need [that we’re meeting for] people who don’t have time to go to malls and browse,” Oh says. Plus, customers are more than happy to share information about themselves that can help the company better understand their shoppers.

Ellen Latham of Orangetheory, right, David Oh of FabFitFun, center, during a panel discussion moderated by Barbara Thau, left, contributing retail writer for Forbes. Photo courtesy of NRF.

2. Creating authentic brand ambassadors and being inclusive is key to continued growth. Outdoor Voices has had some big celebrity endorsements from people like actress Lena Dunham. But Tyler Haney, founder and CEO, said real people who love the company's recreational apparel (and tell their friends on Instagram) have driven the most growth. These “micro influencers” shared their experiences with the laid back brand and connected with the hashtag #doingthings, sharing pictures of leisurely but healthy activities like walking dogs or hiking along a trail. This helped illustrate that they didn’t have to be doing something “intensely competitive” to be healthy and active, Haney said, and was more inclusive than posting photos from intense workouts. (Translation for IGCs – your brand ambassadors could be new gardeners who show that you don’t need to have a horticulture degree or previous gardening experience to be successful.)

Micro influencers were essential for Orangetheory, as the model and, for a lack of a better word, theory behind the workout can be hard to explain and grasp. “Creating brand ambassadors was huge for the growth of the company,” Latham says, adding that in just eight years, they now have about 800 franchises, with 1,200 planned by the end of 2018, with locations in 16 countries. Oh from FabFitFun agreed, adding that, “If you have bad word of mouth, your business is not going to survive. The consumer is your best advocate.”

3. Despite the growth of online shopping and mobile, people want real, in-person connections. Beth Comstock, former vice chair of General Electric, summed it up during the "Transformational Leadership: Women Empowering Change" session: “We’re talking a lot about robots, but people still want experiences and community and want to talk to actual people.” And as people start seeing the ramifications of their constant smartphone use and being connected 24/7, there will be a desire to reconnect with people face-to-face. Arianna Huffington, founder of The Huffington Post and Thrive Global, says her favorite new technologies are products that actually help you disconnect from it. (And that's just what Thrive Global does, as its mission is to "end the stress and burnout epidemic by offering companies and individuals sustainable, science-based solutions to enhance well-being, performance, and purpose, and create a healthier relationship with technology." Augmented reality may have been the buzzword in retail last year, she said, but this year, “recapturing” and “celebrating our humanity” will become the focus, which is good news for garden retailers.

4. Try to offer appointments (like the Apple Store’s Genius Bar) and drive traffic by scheduling them during traditionally slower times of the day. Garden center retailers have found success hosting events and personalizing the customer experience, but many retailers are taking this one step further and offering in-store appointments, like Apple’s Genius Bar, which requires customers to schedule appointments with associates for help with technology issues. John Lewis, a department store based in the U.K., offers one-on-one appointments with associates for help with everything from kitchen remodels to dress fittings, and rolled it out one department at a time. Glenn Shoosmith, CEO and Founder of BookingBug, a company that offers this in-store scheduling technology, told attendees at one NRF session that customers willingly share information, like their color preferences and size, as part of the scheduling process to make the experience seamless. The key to success was making sure the associate knew that customer information in advance of the appointment and didn’t have to re-interview the customer. Even if the customer doesn't show up, retailers still have information about that customer and can continue to reach out, Shoosmith says. Foot traffic is a challenge for many retailers, who see a surge of shoppers at night and on weekends. Mark & Spencer (M&S), another U.K.-based retailer, solved this problem by scheduling its bra fitting appointments during slower shopping times to boost sales and ensure customers received a personalized experience. Most customers who had an appointment also bought more – up to three times more – than shoppers without appointments.

Hamdi Ulukaya of Chobani. Photo courtesy of NRF.

5. Philanthropy and good stories resonate with consumers. Hamdi Ulukaya, founder and CEO of Greek yogurt company Chobani, has a great story, a version of the American dream that is considered ubiquitous but difficult to achieve. He lived in Turkey and worked on his family’s dairy farm before coming to New York City, and didn’t speak English or really have a plan when he came to the U.S. He never sought to be business leader, as he rejected the idea of corporate greed and wealth. Now he owns a yogurt company with more than $1 billion dollars in sales, but he shares that with his more than 2,000 employees, as he gives them 10 percent of the company’s ownership stake.

“One-fourth of American workers are making less than $10 an hour ... How do you take care of your family? It’s just impossible,” Ulukaya told the packed audience during his main stage session at NRF. “The income gap is just out of control. If we’re not going to do something about this, who is going to? It’s our responsibility, the right thing to do, and consumers demand it. We can’t just sell yogurt, we have to solve problems.”

And he has, by employing thousands of people, including refugees, who comprise 36 percent of his staff, and creating a business incubator for entrepreneurs who share a similar philanthropic business philosophy. This mindset has spelled success for Chobani. He launched the company in 2007 with 5 people, and by 2012, they achieved $1 billion in annual sales and employed 2,000 people. “I was very surprised about the quality of yogurt when I came here. The availability of good yogurt wasn’t there. I said, ‘Why is it so full of sugar?’” Ulukaya said.  “It wasn’t that people weren’t eating [Greek yogurt]. … There is a tremendous amount of knowledge under that line that is not capturable in the studies, but you can see it in people’s behavior.”

6. Taking care of yourself – and your employees – is essential to a successful business. Arianna Huffington says smartphones and people should sleep in separate beds, and actually created a product she sells at cost to encourage people to “tuck in” their phones at night, in a place other than their bedrooms. After she collapsed from exhaustion and sleep deprivation and hit her head about a decade ago, she realized that, as a society, “We take better care of our smartphones than ourselves. Burnout is a global epidemic, and it’s completely unnecessary," adding that research shows when people are healthy and take care of themselves, they are more innovative and creative. She founded Thrive Global, a company that provides pathyways to a healthier life, which starts with “managing our relationship with our phones.” The company offers education, and even apps, to help people regulate their screen time.

“We need to take control of our smartphones and take control of our lives,” she said, adding that people are addicted and many start and end their days with a smartphone check. “The phone is what everyone wants from you. You need to start your morning with … what is my intention for the day and set your own agenda.” Smartphones should be absent from bedrooms and meetings, she adds. Companies could help their employees manage this by suggesting cutoff times for emails and calls, unless it’s an emergency.

7. Give customers options in how they communicate with your business. One big takeaway from the “The what and how of digital transformation: Three consumer expectations to meet now” session was that customers have preferences in how they communicate with your business, whether it’s via texts or beacon alerts or emails. It’s important to let consumers choose how they want to interact with you, said Scott Emmons, director and founder of the Innovation Lab at The Neiman Marcus Group, who was one of the members of the panel.

8. For retailers that offer e-commerce, providing a level of customer service that mirrors the in-store experience is key. That’s a challenge that Emmons of Neiman Marcus said has been the high-end retailer’s primary goal. “The future of being a great retailer is delivering a personalized experience for the customer, even online,” he said. Neiman Marcus focuses on pain points for the customer because, to have a good experience, you have to acknowledge and manage those pain points. Creating a good customer experience means giving sales associate tools that they need in store, too. Neiman rolled out iPhones for all associates, for example, so they could better serve customers by having information at their fingertips.

Doug McMillon of Walmart. Photo courtesy of NRF.

9. The market is competitive, so invest in your people. The Chobani story above illustrates this. Founder Hamdi Ulukaya creates both customer and employee loyalty by paying fair wages, hiring refugees (and arranging transportation to make sure they have no obstacles to get to work) and offering profit-sharing for staff. Doug McMillon, Walmart president and CEO, who started working for the company as a teenager unloading trucks in a warehouse, said employee benefits are also his focus. The company recently announced that they instituted wage increases, bonuses, and paternal and maternal leave. “This is a people business … we want them to be happy. We want them to know how much we care about them,” McMillon said during a main stage interview with NRF president and CEO Matthew Shay. And, as retailers know, happy employees lead to happy customers. The next step in investing in people is offering training opportunities and skills development, especially with new technology available in retail. McMillon says some of the jobs people have now can be automated to free up associates to have more time with customers, because, “The person who ultimately decides whether we are here or not is the customer.” Though Walmart is a worldwide company with thousands of locations, McMillon stressed that “Retail is local in many ways. The assortment needs to be local and empower people.”

10. People want to get to know your business on social media, and they make purchasing decisions there, too. Instagram COO Marne Levine can prove this with the social media app's user data, noting that 80 percent of users connect with a business on Instagram voluntarily. That’s why the company is focused on providing tools and resources for retailers to not only tell their stories and develop relationships with consumers, but to also connect with shoppers and create a place on the app "where business gets done." Of top rated Instagram stories, a third are from businesses, and since Instagram rolled out the “save” button, a third of saved pages are from businesses.

11. Be authentic, and fast, when communicating with customers, especially on social media. Instagram and other social media platforms have shown that the need for human connection and validation has never been stronger. Because customers want to connect with real, authentic people and brands, it’s important to respond quickly to messages and, as Levine put it, to adopt a “mobile mindset.” Respond quickly, keep it short and be yourself, she says.

12. Keep innovating and use technology to engage and connect. Customers want real connections, but sometimes that can't be in person. Levine says one company used an Instagram poll and user votes to determine what color sweater they would create, empowering their customers to make real decisions. GE’s former vice chair Beth Comstock says that no matter what industry, “every company needs a lab approach … where you are constantly experimenting and learning. … This idea of failure, we talk about it, but nobody likes to fail.” But it’s important to be open to failure in order to grow and survive in the competitive retail environment, she says. “The more you keep innovating, the more you are going to keep your customer going along with you.”

McMillon of Walmart echoed this sentiment: “Retail is about change, and that’s part of the reason people like it so much is because it is challenging.”