Contributors: Carlos Castelán and Charlie Wärendh
With the abundance of buzzwords – customers, personalization, AI, machine learning– still fresh and the ringing of slot machines gradually fading away, we thought it would be helpful to capture takeaways from Shoptalk 2018 in Las Vegas to pull together some common themes. Sitting under the clear blue (painted) sky that harkens back to the old world in Venice – including indoor gondola rides – we sat down with fellow attendee, Charlie Wärendh, to collaboratively summarize and recap takeaways from the packed four-day agenda.
#1 The importance of technology in retail cannot be understated and will accelerate the gap between companies going forward.
Shoptalk 2018 highlighted the difference between companies focused on long-term enterprises to deliver outsized growth as opposed to legacy retailers focus on year-to-year initiatives. Large companies such as Amazon or Google and young upstarts – like, M.Gemi and Frank and Oak – have data at the core of what they do. Why is it that “mature” companies like Amazon and Google can continue to deliver crazy growth? They promote exponential thinking vs. incremental thinking.
Many of the keynote speakers from legacy brands – Macy’s, Target, and ascena retail group, to name a few – discussed what they had done the last couple months and what they were doing over the next year. The view of business in year-to-year terms (incremental thinking) was apparent in their speeches in contrast to the executives from technology companies that were talking about frontier technologies that would not be adopted en masse for years.
Legacy retailers would be wise to adopt exponential thinking on their teams (more on that in takeaway #2) as well as identify and take calculated risks with great technology partners to accelerate their capabilities and service offerings. The fact that retailers don’t operate like technology companies can be an advantage to not have to build all tech in-house and strategically partner with companies on the frontier.
#2 Great leadership and flexible, top talent drive successful companies, yet retailers seem to overlook it.
While it’s clear that retailers often understand what they need to do from a pie in the sky perspective, the difference shows up in the execution. There’s a strategy and execution gap (gulf?) in the industry where leadership, and the talent they are leading, make all the difference.
An organization’s talent and leadership competency, though, are a) harder to identify than traditional KPIs and b) often hampered by siloed thinking and data – where employees are tasked on work for their particular division or group and don’t have built-in incentives to continuously share and learn. More than ever, it’s important for companies to think about their talent strategy – from the role of recruiting and HR to pay structure for employees. Brands are no longer competing for talent amongst each other but also with tech companies and service providers.
The most impressive leaders and speakers at the conference – such as Chieh Huang from Boxed or Emily Weiss from Glossier – attract top talent because they have a clear vision and strategy for the company, and treat their employees well. They operate with small, agile teams empowered to execute quickly.
The model for talent is changing at bigger companies to reflect the success of small brands, including hiring small teams to get work done across an organization. “Existing groups work well together, they contribute more quickly, and they are more likely to shake things up (in a good way),” writes the Wall Street Journal.
If you want to change how your organization operates to achieve greater heights, why wouldn’t you start with your talent strategy?
#3 Everyone talks about taking the customer’s perspective but how do they account for a continuously changing perspective?
A common refrain from the conference was how companies were taking the customer’s perspective to transform their businesses going forward and become more digital (buzzword bingo!) However, one of the challenges to this approach is shifting the org structure to align to this way of thinking. A couple unique approaches stood out from upstart brands that use insights as a competitive advantage to generate faster speed-to-market and agility:
- M. Gemi – Founder & CEO, Ben Fischmann, talked about how M.Gemi took the shoe design and production process which historically took 18 months and cut it down to three months for customers. How? By using customer insights from ecommerce and its stores to rapidly design, prototype and then produce. The design process starts with insights and the organization has committed to building out this capability to create a supply chain advantage.
- Frank and Oak – Co-founder & CEO, Ethan Song, discussed how the company only signs short-term leases and deploys a pop-up store strategy to use the store as “media.” The team views the store count – and definition of a store — as fluid because they are an avenue for customers to connect with the brand and its employees. As a result, they invested heavily in point-of-sale and mobile because they found they didn’t need more screens in-store. If customers need to look at something digitally, they will do so on their phone in-store. The concept of a store as media and the ability to flex locations through insights is an advantage for the brand.
Infusing customer insights at legacy retailers requires re-thinking organizational structure, talent, and processes which is, admittedly, a challenge. However, if retailers are committed to being customer-centric they must build an organization around insights that allows adapt to the consumer’s changing needs.