world retail congress 2018, day 2: department stores, … · 2018-04-19 · positioned department...
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1 DeborahWeinswig,CEOandFounder,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.
April 19, 2018
World Retail Congress 2018, Day 2: Department Stores, Diversity and Digitalizing Products
TheCoresightResearchteamisattendingWorldRetailCongress2018inMadridthisweek.Hereareourtoptakeawaysfromdaytwooftheconference:
• Premiumdepartmentstoreretailersareinvestinginregionallytailored,boutique-likestores.
• Inditeximplementedradiofrequencyidentification(RFID)technologytodigitallytrackitsproductsand,so,improvebusinessoperationsandthecustomerexperience.
• Investmentsintechnologycanbe“peanuts”comparedwiththereturntheyprovideforretailers.
TheCoresightResearchteamisattendingWorldRetailCongress2018,whichistakingplaceinMadridApril17–19.Here,wefeatureourtakeawaysfromtheseconddayoftheconference.
ReinventingDepartmentStoresOndaytwoofWorldRetailCongress,weheardfromtwoexecutivesatpremium-positioneddepartmentstoreretailersthathavebeenoverhaulingtheirpropositioninordertoincreasetheirrelevance.
JuanCarlosEscribano,CEOofMexicandepartmentstorechainElPalaciodeHierro,outlinedhiscompany’sstrategyofcuratingstoresforspecificcitiesandcommunities.Thecompanyseekstocreatedistinct,qualitystoresunderamodelthatcontrastswiththeconventionalflagship-and-branchmodelmostdepartmentstoresuse.ElPalaciodeHierro’sregionalstoreshavevariousthemes—suchaswellness,designandgastronomy,andtheocean—thatalignwiththeirrespectivelocationsandthedemandsoflocal
2 DeborahWeinswig,CEOandFounder,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.
April 19, 2018
shoppers.Thecompany’sSantaFestore,forexample,hasawellnessthemeandfeaturesa17,500-square-metergympluscomplementaryservicessuchasorganicfood.
StaceyCartwright,DeputyChairmanofHarveyNichols,saidthathercompanydoesnotconsideritselfadepartmentstore,butalargeboutique.Thedifferenceismarkedbyheightenedlevelsofpersonalizedservice,greateraffinityfortheretailerbycustomersandcustomers’expectationthattheywillfindauniqueofferingatHarveyNichols.
FourbrandvaluesunderpinnedHarveyNichols’physicalanddigitaloverhaul:beingobsessedwithstyle,playfulinattitude,daringindeliveryanddevotedtothecustomer.Theretailer’sphysicaltransformationincludedadoptingnewstoreformatsthatabandonedtraditionaldepartmentstorewalkwaysinfavorofallowingshopperstofindtheirownpaththroughthestore.Thecompanyalsoincorporatedmodernandindustrialmaterialsalongwithtraditionalmaterialsinstores.
HarveyNichols’newerdigitaltoolsincludeitsRewardsapp,whichhasdrivenstrongengagementbyofferingshoppershigh-valueexperiencesasincentives.Recently,ithasalsomadein-storestylistsavailablethroughmobiledevices,includingthroughlivestreamedvideothatshopperscanwatch.
DiversityUnderDiscussionBoardroomdiversity,andparticularlygenderdiversity,wasthesubjectofapaneldiscussiononthemorningofdaytwoatWorldRetailCongress.
• VeronikaPountcheva,GlobalDirectorofCorporateResponsibilityatMetroGroup,notedthatinvestorsareincreasinglyquestioningfirmsaboutthediversityoftheirworkforces.Indiscussinggenderquotasforcompanyboards,Pountchevagaveananalogytogolf:ingolf,ifyouwanttoimproveyourhandicap,youpractice,andquotasgivefirmsachancetoundertakepractice—tolookoutsidethecompanywhenhiring,reviewtheirrecruitmentpracticesandlookathowdiversityisrecognizedintheirdailywork.
• WendySiu,FounderandPresidentofhomeinteriorsfirmHeather&March,arguedthattorecruitwomentoboards,firmshavetoensurethattheyhaveenoughwomeninmiddleandseniormanagement.InAsia,Siusaid,itisdifficultforfirmstofindtherightwomenforboardmembershipsnotbecauseofdiscrimination,butbecausetraditionalAsianvalueskeepmanywomenfromseekingsuchchoices.
• Siurecognizedthat,withoutquotas,progressongenderrepresentationmaybeslow,butshesuggestedthatquotasshouldbeadjustedinconsiderationoflocalfactorsandthattheycouldcausefrictioninsomecountries.
Source:CoresightResarch
3 DeborahWeinswig,CEOandFounder,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.
April 19, 2018
DigitalizingProductsIvánEscuderoRial,HeadofRFIDatInditex,discussedhowhisfirmhasimplementedRFIDtechnologytodigitallytrackitsproductsand,so,improvebusinessoperationsandthecustomerexperience.RialnotedthatInditexfacessomechallengesinmanagingitsstock.Thecompanyhaslowvolumesofeachsizeofproductineachstore,butmatchingleaninventorywithhighprofitscanbetough.Meanwhile,thedemandsofstoreoperationsincludemanaginginventoriesacrosssalesandreturns,fittingroomsandreplenishments.
InditexdecidedtodeployRFIDtechnologywithinthesecuritytagsthatareappliedtoproductsbysuppliers(otheroptionsincludedembeddingRFIDtagsinclothinglabelsoronpricetags).TheretailerdevelopedaproprietarytagwithsecuritytaggingfirmTyco.TheRFIDtagsareencodedenmasseinInditex’sdistributioncenters,andareremovedatthepointofpurchase,meaningtheycanbereturnedtosuppliersandthenattachedtonewgarments.
Inditex’sstorestrackwhethergarmentsareinthestockroomorontheshopfloor,andfloorstaffcommunicatewithstockroomstafftocheckavailabilityusingWhatsApp.ThetechnologyenablesInditextoreplenishstoresfasterandcollectmoreinformationonshrinkage.
Rialsummarizedthein-storebenefitsofRFIDasimprovingworkforstaffandprovidingbettershoppingexperiencesforcustomers.
CheapTechTechcanbe“cheapashell,”arguedEugeneRoman,EVPofDigitalExcellenceatCanadianTire,citingbotsthatcanbedevelopedforaslittleas$15,000.Retailisaslim-margin,nonrecurring-businesssector,andretailersshouldbuildmachinestohelpwithit,hesaid.Thoseinvestmentscanbe“peanuts”comparedwiththereturntheyprovide,Romansaid,notingthatretailersshouldaskthemselves,“Canwedothiscosteffectively?”
Anumberofyearsago,CanadianTiredecidedalgorithmicretailwasthefuture.Now,thefirmusesmorethan200activebotstohelprunthecompany.ItclaimsoneofthebestpatternanalysisteamsinCanadaandemploysacognitivescienceteam.
Source:CoresightResarch
4 DeborahWeinswig,CEOandFounder,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.
April 19, 2018
DIYGoesDigitalTakeawaysfromafiresidechatwithVéroniqueLaury,CEOofDIYretailerKingfisher,includethefollowing:
• Manyretailershaveunderestimatedthecostofdigitaloperations.Theyhavetomakerealisticchoices,andretailerssuchasKingfisherprobablywillnothavethesamenumberofemployeesincomingyears.
• Onemythabouthomeimprovementwasthatthecategorywouldnevergoonline.Thisisabsolutelynottrue,Laurysaid,notingthatKingfisher’sScrewfixbannersees28%ofitssalesgeneratedonline.
• Amazonspurseveryotherretailertogoalittlefasterandiseffectivelyshowingthewaytotherestofretail.
• Retailersmustdomorethanjustsell,Laurysaid,pointingtoZaraandDecathlonasstoresthatsuccessfully“retailtheoffer”ratherthansimplysellproduct.
KeepaneyeoutforourreportondaythreeofWorldRetailCongress2018.
5 DeborahWeinswig,CEOandFounder,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2018CoresightResearch.Allrightsreserved.
April 19, 2018
DeborahWeinswig,CPACEOandFounderCoresightResearchNewYork:917.655.6790 HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comJohnMercerSeniorAnalystHongKong:6/F,LiFungTower888CheungShaWanRoad,KowloonHongKongLondon:242–246MaryleboneRoadLondon,NW16JQUnitedKingdomNewYork:1359Broadway,18thFloorNewYork,NY10018Coresight.com