NRF 11 Monday Session
Alison Paul Vice Chairman and U.S. Retail Leader, Deloitte
Cathy Green President, Food Lion Family
Andrew Higginson Chief Executive of Retailing Services and Group Strategy Director, Tesco
Ira Kalish Global Director, Deloitte Research
Peter Sachse CMO, Macy’s; Chairman and CEO, Macys.com
During the next decade, consumers will change dramatically, shaping a far different business environment than anything seen in recent years. Retiring “boomers” will buy less; GenY will shop primarily via smart phone or other handheald devices; and growth in emerging economies will create a new middle class along with a geographical shift in spending. Linking these trends at breathtaking speed are developments in media and technology that accelerate the proliferation of information and further empower consumers. Are retailers prepared to address these changes? What does the future have in store?
Alison: Let’s start off with trends that are dominating the industry…
Peter: Customer-centricity – having a 360 degree view of the customer is great to say, but hard to do. One of the most daunting and yet rewarding initiatives we undertook in marketing was a direct mail piece. In November we sent out a direct mail with 30,000 unique versions to users. That is personalization. That is much more relevant.
Andrew: At Tesco we find it imperative to make pricing information clear, as well as getting relevant information across in new and more helpful ways.
Cathy: I agree that personalization, is dominating the industry. We have started a coupon saving center with an MVP card that lets the customer see what is relevant that day.
Alison: Let’s talk about keeping it simple with the challenge of globalization
Cathy: I think it’s always a matter of leveraging people – but there ultimately needs to be a push toward making global retail local and relevant – you can learn good ways to do this from global partners
Andrew: For Europe it’s much more relevant to move globally. And you need to make sure your learning is global. Knowing what the local customers want. It’s a real challenge for retail – and you need to go in with eyes open.
Ira: Earlier we talked about re-balancing the global economy – the implication is that if you want to grow fast, it is not occurring in the US – but there are definite areas that are growing in the US, however, US retailers do have the coupled challenge of the opportunity for global expansion.
Andrew: It’s also about understanding consumer spend – which is one of the reasons why Tesco Bank was developed. And as consumers age, they need more services than goods.
Peter: It is interesting that Tesco has expanded in the multitude of areas it has.
Cathy: Turning millions of pieces of data into actionable insight. If you have the data coming in – you need to do something with it. Retailers that can do that will be strategically set up for 2011.
Ira: Changing demographics in US opens new opportunities, but it also opens more challenges. Localization and personalization is every retailers goal.
Peter: My Macy’s and customer centricity go hand in hand. It took robust technology, and more people. But two years after start of program, we are even closer to our customer than we were in the past, even though we’ve expanded.
Cathy: Customers want a personalized shopping experience. They want retail tailored to their needs. And we are starting a My Food Lion program, inspired by Macy’s initiatives.
Alison: Let’s talk about own label brands – how are they changing retail?
Andrew: Own label brands are 55% of our stock – it gives the customers more choice and it gives us more control over price and margin, which is sometimes easier and more profitable than working and negotiating with national brands. Own label has been absolutely critical to Tesco’s success. And it’s also about having different price points and quality for those brands. We have been able to use our own label brands in clothing internationally.
Cathy: There has been an explosion of private label brands – opportunity to build your own brands builds trust and loyalty, and allows for more innovation. But there is still a huge opportunity to partner w/ national brands.
Andrew: And ultimately it is always about pleasing the customer. They tell us what they want.
Alison: Let’s move on to sustainability and corporate responsibility, food crisis, and limited resources
Cathy: Sustainability is one of our three corporate imperatives. It went from being nice initially, to being crucial. We’re looking for opportunities to do that everywhere – products that are environmentally sustainable, products that are healthy and millennials are going to assess and judge us on how well we do that.
Andrew: Corporate responsibility is on our corporate steering wheel, but how do you measure it? If you can get that measurement on the package, you give the customer awareness to decide and make those choices.
Alison: “It goes back to the saying that we behave as we are measured.” So with all of this in mind, let’s make some predictions about which issue will be the most important in 2020…
Ira: Demand for commodities, energy, especially in India and Asia, as well as food prices.
Peter: In the short term – the entire world will become mobile, we will need to interact with the customer through the customers specific device, and in their network.
Cathy: Again, it all goes back to the point of data. And if you have the information about the customer coming in every day, from every channel, do something with it, predict what the customer wants before they walk into the store. With data – we can do it better – with information comes trust.