Whew! NRF Retail’s BIG Show 2017 may have ended earlier this week, but we are still hyped up over all the insights and innovations we saw at the event.
The points outlined below are the things that will make the biggest impact on retail in the near future. So while robots, virtual reality, and 3D printing are all fascinating, this post focuses on trends and lessons that will yield significant (and relatively near-term) wins for online retailers of all sizes. Let’s dive in.
- Online retailers must shift their staffing strategies
Going forward, online retailers need to rethink how they attract and retain employees. As e-commerce platform HSN’s president Bill Brand noted in the keynote session Building Tomorrow’s Workforce, technology isn’t just changing how we work, buy, and interact, but it’s also creating new jobs.
To address these developments, retailers must change how they approach talent development and find innovative ways to train for the skills and knowledge required to succeed today. “We have to embrace new thinking to meet the demands of this new world and this new workplace,” he said.
To accomplish this, retailers should start looking look for candidates with strong, diverse, and non-traditional backgrounds. In addition to hiring for traditional positions (i.e. sales associates and managers), you should also bring on individuals with new and different skill sets (think social influencers, data scientists).
Now the challenge here lies in attracting exceptional individuals who possess such skills. Many people in the workforce don’t really see a fit in the industry because they don’t just see retail as an attractive and innovative field. Merchants must work to change that mindset by educating people about the diverse opportunities within the retail industry, adds Brand.
“We have to embrace new thinking to meet the demands of this new world and this new workplace.”
To accomplish this, multichannel retailers such as Macy’s have started teaming up with key campuses so they can meet and educate students about their company. This step has been quite effective for Macy’s according to chairman and CEO Terry J. Lundgren.
Lundgren added that it’s key to go out there and talk about your company. “Talking about your company, the things you do, the things that are important to you, and your culture, those are the types of things that make people say, ‘Gee maybe I’d like to work for that company.’”
“I think you need to get outside your box,” Lundgren continued. “At Macy’s we try to make sure we’re interacting not just with the natural people who would find our business attractive, but we go outside of that sphere. Whether it be at a conference like this or technology conferences.”
Lundgren added that taking these steps creates a new level of understanding about Macy’s and “gets rid of some of the old, traditional beliefs of what a department store does in today’s environment.” That, in turn, attracts a much bigger pool of talent.
“Talking about your company, the things you do, the things that are important to you, and your culture, those are the types of things that make people say, ‘Gee maybe I’d like to work for that company.’”
2. Online retailers need to be more transparent (you have no choice)
We talked about the rise of retail transparency in our latest Retail Trends and Predictions piece, and this trend was also brought up at Retail’s BIG Show. When asked about key trends in customer behaviour, James Rhee, executive chairman and CEO of plus size womenswear online retailer Ashley Stewart, replied with one word: transparency.
“You can’t hide anymore. Whether you agree if that’s good or bad, you (retailers) have massive exposure through social media.”
What does this mean for merchants? According to Rhee, as a company and online business, you must be clear about your values and ensure that you’re actually embodying the things that you say you stand for.
“What do you stand for? How do you source? People want to know, and that’s putting considerably more pressure (on retailers.)”
3. Prepare for the rise of customisation and on-demand inventory
One of the most interesting keynotes at NRF was Tailoring the 21 Century Customer Experience, a keynote session in which Jodie Fox, co-founder of Shoes of Prey and Drew Green, CEO of US based menswear online retailer Indochino, talked about how they leveraged the power of customisation in their businesses.
Shoes of Prey and Indochino have both thrived by allowing shoppers to create and personalise their looks. The former, by enabling women to design their own shoes, and the latter, by helping men purchase made to measure shirts and suits at affordable prices.
In the case of Shoes of Prey, the company lets its customers design every aspect of their shoe, from the style and material all the way to the straps and heels.
Now, offering this type of customisation isn’t possible for all kinds of retailers, but that doesn’t mean you can’t apply the concept to your business or products.
As Fox notes, offering customisation can be as straightforward as having a dialogue with your customers to figure out their needs and coming up with products specifically for them. Sometimes, just personalising the packaging of an item for the client or allowing them to add their initials to a product can go a long way in providing that unique experience.
Another significant trend at play here is on-demand manufacturing, or what Green calls “virtual inventory.” Having on-demand or virtual inventory means you won’t have to stock numerous SKUs in-store. Instead, you carry those products virtually and produce them once the customer has placed an order.
“We’re able to expand rapidly because our inventory is virtual. Whereas some of my contemporary competitors would have to invest $500,000 or a million dollars to open a showroom, our investment is much, much less than that.”
Both Shoes of Prey and Indochino implement virtual inventory in their businesses. Rather than stocking up on ready-made merchandise, they’re letting shoppers build the products themselves, and the companies fulfill them as the orders are placed.
According to Green, having virtual inventory has been a significant component to the rapid growth of Indochino’s showrooms. “The reason we can do that is because our inventory is virtual,” he said.
“Whereas some of my contemporary competitors would have to invest $500,000 or a million dollars to open a showroom, our investment is much, much less than that.”
Understandably, revamping your business model and processes to accommodate virtual inventory might not be feasible. However, there are still elements of this trend that you might be able to apply.
- Merchants must seize mobile opportunities
Mobile plays a big role in consumers’ lives, and there are plenty of staggering stats to prove that. Take the data from the recent holiday sales, for example. According to Adobe’s Annual Online Shopping Data, 1 out of 3 online holiday purchases was made on mobile, which goes to show that mobile phones are being used not just communicate or browse, but to buy products.
Retailers who fail to take advantage of mobile platforms are leaving a lot of money on the table. Fortunately, it’s relatively easy to be more active on mobile in this day and age. As Facebook’s small business regional director Katherine Shappley pointed out, social networks such as Facebook and Instagram are already mobile-friendly. Simply creating a business account on these platforms can open up plenty of opportunities for retailers to engage shoppers.
It’s also important to note that leveraging mobile and social media isn’t just about setting up your profile or running mobile ads. Thanks to chatbots and automation, retailers can now tap into messaging apps such as Facebook Messenger to streamline customer service and communication.
For instance, if a shopper wants to track their order, they can just “ask” your business on Messenger, and a chatbot can automatically serve up the shipment information.
- Forming partnerships could be just the thing to help you thrive
Partnerships was another big topic at the BIG Show. For one, the NRF announced the launch of RISE Up, a new program that offers training and credentials that would help entry-level job seekers develop careers in retail.
RISE Up is a partnership between the NRF Foundation and more than 30 leading retailers. Five out of the top 10 retailers in the country have pledged support towards the initiative because they recognise the importance of finding and training the right people for retail careers.
The importance of partnerships was also brought up by Indochino’s Drew Green. According to him, a key decision for the company was to team up with Dayang Group, the largest suit manufacturer in the world. This partnership enabled Indochino to expand the business, enhance their products, and improve automation.
These successful partnerships are just two examples of what could happen if companies joined forces. With the right partner, you can grow your business, reach more customers, and even do a lot of good for the community.