NRF Takeaways – 7 Insights to Propel Your Business in 2019
We just returned from a stimulating shopping trip to New York. But we didn’t go hunting after-holiday bargains, we attended the National Retail Federation Show, a.k.a. Retail’s Big Show, where we picked up the goods on how consumer businesses should focus their efforts in 2019.
Below are seven essentials on our “Must Have” list for companies in any consumer industry – including retail, healthcare and banking – looking to surge ahead of the pack.
1. Play Your Own Game — Competing with Amazon Is Futile
The market remains wide open for brands offering customers great products and experiences. Instead of trying to compete with Amazon by attempting to offer everything to everyone, focus on what you do best and do it even better. Start by listening to your customers to understand – and anticipate – what they want and need. Then, identify which products, services and experiences your company can provide to meet these needs and how to deliver them in the most convenient, seamless way. For example, to support its online grocery shopping business, Walmart turned its stores into mini-warehouses and fulfillment centers, enhancing service to existing customers while bringing a whole new customer segment to the brand.
Also think about complementary services and consider partnering with other companies to offer end-to-end experiences, as IKEA did by acquiring Task Rabbit to offer assembly services for its furniture. Finally, design and implement a flexible, responsive operating model that enables your organization to continue evolving in alignment with your customers’ evolving needs.
2. Get Woke and Stay Woke
Customers increasingly are choosing to make a difference in the world by aligning their spending power with their values. A growing number of companies also are stepping up and making it their mission to do good. Levi Strauss & Co. and Tom’s are tackling gun violence. IKEA is making diversity mainstream, running ads in Italy featuring a same-sex family and a tagline saying that “IKEA serves all families.” Despite immense political pressure, IKEA persevered. Responding to gun violence in the U.S., Ed Stack, CEO of Dick’s Sporting Goods, directed Dick’s stores to stop selling assault weapons completely and guns to people under 21. Patagonia, the outdoor clothing and gear company, donated $10 million saved from 2018 tax cuts to support environmental protection groups. Unilever reported that the truly purpose- and mission-driven brands in their portfolio are outperforming their other brands.
Consider what you want your brand to stand for and how you can seize this opportunity to do well while doing good. As this trend grows, companies that don’t take a stand for something may risk being perceived as standing for something else.
3. Build Trust
According to Edelman’s 2018 Global Trust Barometer, we’re living in a world of distrust, with the trust decline in U.S. at the steepest ever measured. Sixty-three percent of individuals polled agreed that, “A good reputation may get me to try a product—but unless I come to trust the company behind the product, I will soon stop buying it, regardless of its reputation.”
Perceived trust will become increasingly important as consumers are asked to use new technologies like Blockchain and Artificial Intelligence (AI) to interact with companies. Consumers will seek the comfort of trusted providers, particularly as they’re asked – or required – to share more personal information when using these new technologies. Building and maintaining trustworthiness within your company is key to establishing a company that can be trusted by your customers. Be honest. Be transparent. Be reliable. Make trustworthiness your mantra inside your organization and in the marketplace.
4. Make the Experience Seamless from the Inside Out
Customers today expect a consistent experience no matter where or how they do business with you. Be it digital or physical, the line between the two must be seamless. Successful companies understand that brick-and-mortar sites provide opportunities to deepen relationships, while technology offers ease and convenience. They make sure all their functions operate seamlessly from the inside out.
Walmart has set up their technology teams with two distinct focuses: Corporate Functions (HR, Finance), and the Customer (stores, digital, marketing). Customer-centric companies like Reformation view the customer relationship holistically, across all touchpoints, with an intense, continuous focus on improving the relationships, experiences and products they provide. This holistic approach also extends to metrics, which focus on the total experience rather than evaluating physical and digital KPIs separately.
5. Innovate and Dare to Self-Disrupt
Do what it takes to be relevant and be willing to change everything — just not all at the same time. Set up small, cross-functional teams to tackle business problems, develop solutions, measure success, and mistakes. Create a culture that enables and encourages your people to feel safe to experiment. La-Z-Boy distributes “Bravo Points” to people who take healthy risks, fail and learn from their mistakes.
6. Invest in Your People
Your people are your greatest asset, particularly when the largest portion of your workforce is your frontline — interfacing directly with your customers. With a tight labor market, it’s more important than ever to invest in retaining and developing the talent you have. Treat your people like you treat your customers.
Support and value employees in tangible ways that make them feel valued. IKEA allocated its 2018 tax cut savings to surveying employees about additional benefits they’d like to receive and providing the benefits chosen. Engage them in co-creating ideas and implementing strategies, as Target did by appointing sales-level employees as diversity leaders to drive fulfillment of the company’s commitment to increase diversity and inclusion in its stores.
7. Remember to Execute on the Basics
Employing these essentials should help your company gain ground, but don’t forget the basics: ensure your products are in stock, provide a seamless, multi-channel experience, offer an online experience that is easy to navigate and frictionless to transact, maintain an efficient supply chain, maximize your physical space, deliver great service and execute.
Over the coming months, we’ll explore each of these topics in more detail, so check back and browse to learn more! In the meantime, if you have questions or need help taking these steps forward, connect with us here.
Kirsten Kuhlmann CEO & President