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Posted Date: 1/16/2013

NRF 102: Session Highlights With Macy's, Walmart, Brooks Brothers and More

By Jessica Binns, Contributing Editor
If you didn't make it to NRF's annual convention and expo this year, catch up on some quick hits and highlights from the show's action on Monday and Tuesday:

Walmart commits to vets
In his Tuesday keynote, Walmart CEO Bill Simon announced that the retailer is committed to creating up to 100,000 jobs for honorably discharged veterans within 12 months of their service. "It's our responsibility to give them a land of opportunity when they come home," he says. The jobs program will begin Memorial Day Weekend.

"America is still the biggest manufacturer in the world," Simon says. Walmart is working with more domestic factories to manufacture goods such as towels, as its partner 1888 Mills in Griffin, Ga., is doing. The retailer has committed to buying an additional $50 billion in domestically produced goods over the next 10 years.

Asked how Walmart responds to competitors such as Amazon, Simon says, "Amazon lives in a world focused on one channel: e-commerce. I don't think the world is going to be unichannel."

Macy's and mobile
Martine Reardon, chief marketing officer for Macy's, says the company's mobile apps and strategy are built around commerce, customer service and marketing. By putting rich content behind QR codes and helping shoppers use smartphones to unlock special content, the mobile channel becomes a kind of "silent salesperson," she said in a Tuesday afternoon session at NRF. Giving consumers unique mobile experiences, such as its Bobbi Brown eye makeup video tutorials, "is not a direct sell, but it adds to sales." Macy's updated its app ahead of the holiday 2012 season, resulting in 19 percent growth in its mobile user base, and it created a dedicated app, downloaded by 10 percent of its app users, with turn-by-turn directions to help shoppers navigate the newly renovated Herald Square flagship. Macy's accepts Google Wallet in five markets and is piloting the wireless carrier-driven ISIS mobile wallet payment solution in Salt Lake City and Austin, Texas, with plans to expand to other markets soon.

Suzan Kereere, senior vice president, general manager, Global Network Business, American Express reports that even without standards or clarity about where the mobile payments space is heading, the level of innovation in mobile commerce is high. Research shows that there will be an estimated 1.7 billion smartphones worldwide by 2017, and studies indicate that two-thirds of consumers under age 45 shop frequently on mobile and are more likely to switch their brand loyalty, but conduct smaller transactions, dollar-wise. Those over age 45 are much more brand loyal, but don't shop as often, although they tend to make bigger-ticket purchases.

Fifty percent of millenials made a mobile purchase in the past six months. Twenty-five percent of men shop on their mobile phones while at work, and 12 percent of women do their mobile shopping while in the waiting room at the doctor's office. But when a retailer doesn't have a mobile-optimized site, mobile sales plummet 75 percent. Among millenials, 70 percent of their mobile purchases in the past six months were driven by recommendations and context. More than 50 percent of mobile users are okay with sharing their location information with retailers – as long as they receive an offer or similar promotion.

RFID
Mark Hill, vice president and general manager, Global Innovation and Solutions Development, Retail Branding and Information Solutions for Avery Dennison Corporation says there's a shift to doing more tagging at the source of origin rather than at retail or in distribution centers, mostly due to cost savings and concerns. It's cheaper for a factory in Asia that manufacture the product to handle tagging, where labor costs and wages are lower than they are in European and American distribution centers.

Also, RFID tagging enables 100 percent inspection of goods instead of the standard 10 percent because tagged products can be read so quickly. RFID tagging is flowing back from retail so that the entire supply chain can benefit from the visibility it enables. One European brand/retailer leveraged the high-definition runway video it creates and brought that into the fitting room to bring a bit of the runway experience to the customer. The technology should emphasize your brand and what it's about. "RFID is the guy behind the curtain. Don't think about it, just get it done."

Although item-level apparel inventory tagging is the sweet spot for RFID, according to Motorola Solutions' Sue Flake, there's a use case for the technology in loss prevention, enabling omnichannel operations, and shedding light on fitting room conversion rates. Jon Beeler, director, merchandise operations for Soma Intimates with Chico's, says the company is seeing positive results with RFID in store after piloting the technology in its headquarters to track the constant influx of sample items. Associates equipped with RFID guns have helped shoppers locate specific items that they otherwise may not have found, such as a customer who came in seeking a navy blue bra in a specific size. "Women only shop for bras an average of two to four times a year," he says, "so if she's coming to your brand, you want to be sure you make the sale." The retailer discovered that it needed to prevent RF signals from the stock room from comingling with signals from the selling floor, which skews the inventory count. It's also working to figure out how to solve its biggest cost problem with RFID: adding tags to low-cost products.

If you think you're getting your brand message out, it's sobering to learn that just 10 percent of consumers trust recommendations from retailers, according to research from IBM Retail. Indeed, failing to deliver on a brand promise is worse than never making that promise at all. Teenagers believe that the post-purchase phase of brand interaction is most important, more significant than pre-purchase and purchase. That's likely because the post-purchase phase lends itself well to teenagers' overwhelmingly social world, where they share photos of and reviews aobut the items they purchase -- and love or hate.

Consumers age 20 or younger are twice as likely to recommend a product or retailer they enjoy, and even more critical, 76 percent of those age 30 and younger are likely to try a new retailer based solely on the web reviews and recommendations of strangers. Billy May, vice president of ecommerce, digital and marketing for Abercrombie & Fitch says, "Teens create a relationship with a brand. They don't create a relationship with a channel." To succeed in the social sphere, retailers need to understand how to convert brand detractors to brand neutralists to brand loyalists, and most imporant, brand advocates.

A consumer's visit to a retail website has to mirror the store experience -- but you have to figure out how to build a bond without having that physical connection, says Ken Seiff, executive vice president of direct and omnichannel, Brooks Brothers. When it comes to innovating and experimenting with technologies, "our CEO importantly has allowed us to make mistakes -- and we haven't disappointed him," he adds.

"The web has a great memory. It remembers everything you've looked at, if you zoom in on an image, if you purchase an item and don't return it. And that gives us greater certainty of a consumer's interests," Seiff explains.

While Brooks Brothers has a presence on the major social platforms, it had no effective system to listen to all those social conversations. "We created a solution that was laughable" in its simplicity, says Seiff. The company launched comments@brooksbrothers.com but Seiff adds that "the right people had to be listening" to those emails and there needed to be an effective tracking solution in place to ensure the comments were addressed properly.

Sometimes you go down dark alleys, and they turn into wide vistas, says Jeff Bezos, Amazon.com founder and CEO, who accepted the NRF Gold Medal award in a special luncheon on Monday.

Fifty-one percent of consumers research a product online before visiting the physical store for purchase, according to Melanie Nuce, director of retail industry marketing, GXS.

For highlights from Sunday's sessions, click here.

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