NEW YORK -- For the thousands of retailers attending the annual National Retail Federation (NRF) Show, redefining the customer experience at the store is a critical challenge—and an important battle for those wanting the retail format to survive disruption from electronic commerce.
Speakers addressed the inevitable convergence of online and offline shopping. The solution, some said, is for established brick-and-mortar retailers to adopt an online strategy, but to also find ways to work with developing mobile solutions.
- Don’t be afraid to take the lead. Leading a keynote session while his own department-store chain recently announced a number of store closings, Terry Lundgren, president and CEO of Macy's Inc., Cincinnati, Ohio, said if he did not lead development of the company's own online alternative, his competition would have.
"Our challenge is to take [general and administrative] costs out, but we need ... to invest and respond now," he told attendees. "We need to overinvest in those ideas."
Many of his concerns lie in developing experiences within the store to drive the purchasing behavior, as well as recruiting new talent into the retail business, he said.
- Use data to understand customers. In his session, Lundgren interviewed Kenneth Chenault, chairman and CEO of American Express, New York. Chenault said companies must use data to understand customers' spending patterns and invest in new opportunities that may resonate.
Chenault referred to the transportation service Uber, which in his mind solved the customer problem of payment by taking it away from the driver and putting it online. He said new technologies exist so companies can inexpensively test ideas.
"We don't spend enough time developing concrete ideas and going to the next level," Chenault said.
When asked a question about digital replacing plastic payment, he said, "I could assign you a number right now," but the reality is the consumer wants choices and his job is to "offer the best solution and focus on the appropriate value proposition."
- Test new tools. Other conference speakers addressed the need for innovation. Christian Davies, executive creative director for the Americas, at design firm FITCH, New York, told a attendees that the traditional prototype-to-rollout model of developing new concepts is becoming antiquated.
He offered the group a new model, one of having multiple tests or "briefs," where review of the efforts is ongoing and interactive. "New tools allow us to track and monitor what [customers] touch and if they're smiling."
Old development models shaped and perfected programs over months before rollout, he said, but "just how finished does something have to be before we get data?"
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