From August 4th-5th, the Retail Reinvention conference took place at McCormick Place in downtown Chicago. The show was hosted by PYMNTS.com and ACI Universal Payments and Euromonitor was pleased to attend both days. Talks revolved around the relationship between the retail environment and consumer payments, with an underlying theme of what it means to reinvent and why retailers need to consider doing so. The host, Karen Webster, CEO of PYMTS.com, outlined in her welcoming remarks that reinvention is important because you need to see the hidden trends to stay ahead of the curve. Just because things are going well does not mean that it is not time to change.
Marcus Lemonis impresses as keynote
Authenticity and relevance were on display in the first hours of the conference thanks to the talented speaker and retail mogul, Marcus Lemonis, the host of CNBC’s The Profit. He warned retailers to be wary of thinking they know the customer better than they actually do, underlining the importance of catering to the customer’s needs and desires. People largely know how they like to shop. When retailers look to reinvention, they need to accurately assess what they are doing right and wrong in order to solve real problems. Does society really need a new way to buy milk? Catering to customers was the only winning strategy in his book because according to his philosophy, it is people, not products or spreadsheets, that really grow a business.
Online companies stress the need to be consumer obsessed
The following presentation by Amazon and a panel by a number of online companies (Trunk Club, Dominos, Barkbox, Threadless, and Amazon) proved to be very interesting as well from a retail perspective. Amazon noted that their business works backwards, making the customer the centre of all decisions, despite how counterintuitive the solutions may seem. Hosting a marketplace platform for smaller retailers, essentially allowing competitors onto Amazon’s own website, might not have been an obvious solution back in the year 2000, but it served shoppers by increasing selection and has done so ever since. According to Amazon’s own study, 64% of online consumers now use marketplaces as a primary avenue for online shopping, compared to a 40% utilization rate for search engines. Marketplaces are coming of age thanks to their ability to meet consumer demand in a more egalitarian way. Even the CEO of Threadless took the time to point out that they were about to roll out a marketplace for artists, an interesting development considering that marketplaces have not yet become tailored to more specific markets.
Being customer obsessed prompted a different counterintutive move for Trunk Club. Trunk Club’s VP of marketing explained that the company’s model, while based online, relies on 1-to-1 interaction between stylists and customers to personalize the relationship and build brand trust in a more human way. To strengthen the relationship, Trunk Club moved from an online only presence to opening its own stores. The physical presence allows customers to meet their stylists in person and share a drink with them while trying on clothes, making the experience all the more engaging. Omnichannel to them was about creating one seamless experience across the digital and physical realms that served the customer in whatever way possible.
Technology driven changes must not overwhelm
It is the technological developments of the past few decades that have brought forth the emergence of omnichannel retail and will continue to drive retail reinvention. Talk for the rest of the day shifted to a more technical perspective. Making good use of data to inform rewards programs, being vigilant in the fight against fraud, and looking at opportunities for cross-border commerce were all topics that were discussed in depth. The most interesting highlights were the consensus that the most undervalued engagement strategy is still basic human connection (but one that is more informed by technology), the exploration of the potential of purchase data from fraud teams to inform marketing campaigns, and the fact that marketplaces are taking off even faster in places like Asia because they promote easier cross border trade.
Payments and technology were the underlying threads here, but many discussed the need for technology to blend into the background. Once new technology begins to feel invasive or overwhelming, shoppers will revert to a smoother or more trusted experience.
For a recap of the second day of the conference, please refer to Michelle Malison’s “Retail Reinvention Day 2 Recap: Changes in Technology Leads Changes in Retail”.