Transformative Retail – Insights from the NRF Big Show, Part 1

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Fresh back from the National Retail Federation Big Show in New York, a slowly thawing Grant Arnott shares the first part of his insights from an amazing gathering of retail minds.

I’ve just returned from an enlightening and inspiring week attending the National Retail Federation (NRF) Big Show in New York. A record number of 24,000 attendees converged on the freezing Big Apple for the four-day conference and two-day Expo. The heavy delegation from the US was complemented by delegates from Europe, South America and Asia, with only a tiny representation from Australia.

That’s an interesting story in itself – while the Australian retail industry flounders, the US retail sector has recorded 18 consecutive months of growth, according to the NRF. Yet so few from our region decided to venture over to discover the secret sauce. Not only that, US retailers have the technology and the desire to expand globally, with Australian customers a prime target.

Brazil alone sent over 800 delegates to this event, and their retail industry is one of the most progressive in the world.  The retail industry in Australia is frozen by a lack of innovation, yet evidently very few sought answers at one of the largest gatherings of retail thought leaders in the world.

I don’t get that.

Brazilliance

There was plenty of innovation and inspiration at the NRF Big Show. The first session I walked into set the benchmark for great thinking. I’m guilty of focusing on US and UK retailers as the leaders in pureplay and multichannel retailing, but one amazing story from Brazil has given me a wider perspective. Magazine Luiza is Brazil’s second largest department store, and certainly one of the most progressive retailers in the world. In addition to its expansive department store network, Magazine Luiza already operates more than 100 ‘bricks and clicks’ stores throughout Brazil, allowing customers to browse a blend of digital and physical product and buy from mobile devices. The stores have only a fraction of the footprint required of a department store, but are increasing in popularity with the tech-savvy Brazilians.

In social commerce, Magazine Luiza unveiled one of the most brilliant social commerce innovations I’ve seen, taking the notion of the digital marketplace to a new level. Instead of bringing in third-party sellers with their own inventory, like Amazon, eBay, Sears, Best Buy etc. have done, Magazine Luiza is trialling a party-selling program with friends and family of staff called Magazine Vocé.

What this allows customers to do is to create and curate their own Magazine Luiza stores (check out the video below). Customers choose products and build out their own personalised storefront for sharing via social media (Facebook or Orkut). For example, I could have Magazine Grant as my storefront, and I collect a commission any time a social acquaintance buys one of the department store’s products through my own store. It’s the omnichannel version of the Tupperware party!

For Magazine Luiza, it extends the product range into a peer-to-peer sphere of influence far more powerful than a third-party seller could. Though still only being trialled with friends and family of Magazine Luiza, the concept is already seeing a conversion rate lift of 50 percent above the online store.

General Manager of Sales and Marketing, Frederico Trajano, describes this as an extension of a marketing ideology he calls open-source commerce. I don’t mind saying I intend to flog this term to death on every forum I can, as I think it beautifully captures the essence of the digitised, socialised retail environment of today. As retailers struggle with relevancy in social, mobile and online, Magazine Luiza has applied some highly evolved thinking to capture the heart and wallet of the modern shopper.

Transformative Retail

The biggest discussion point of the event was organisational transformation. American retail leaders have accepted that the traditional retail model is no longer sustainable in a world driven by the omnichannel shopper, who expects a seamless brand experience across online, mobile, social and in-store.

Macy’s Chief Marketing Officer Peter Sachse reinforced that everything they do now is omnichannel. “We want to be the single best omnichannel retailer,” he said. “No matter where you are, what you’re doing, if we have it and you want it, you should be able to buy it.”

All of the retail leaders at the event were fully focused around the omnichannel ideal, and deep into mobile as the next major frontier for retail.

More on the NRF Big Show to come, including radical in-store technology, mobile, marketing brilliance and more.

Article by Grant Arnott

Grant Arnott is the editor and publisher of Power Retail. Other hats include Content Manager for the Online Retailer Conference, Program Director for the Online Retail Industry Awards, Global Head of The Media Pad Pty Ltd, and adoptive father of a fast-growing Golden Retriever. Grant has a specialist business publishing background spanning more than a decade, and contributes regularly to a multitude of print and digital business media.

3 Comments

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  • Steven P
  • 25th January

  If Harvey Norman, Solomon Lew, and Frank Lowy have tought us anything, it’s that looking to the US we can see Australia’s (retail) future. Great article.

  Reply
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  • Wendy Stephens
  • 25th January

  Thanks you – great to hear about Magazine Luisa, an amazing approach that really leverages being online. Looking forward to Part 2!

  Reply
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  • MaureenT
  • 1st February

  The NRF Expo was great this year. We found some great insights into retail technology … find out more in our NRF blog post … How Bill Clinton, E-Labels and Intelligent Analytics Can All Drive your Retail Success. http://www.trcepos.ie/national-retail-federation-nrf-expo-2012-retail-intelligence-retail-leadership-insights

  Reply