One of the key themes of this year’s NRF Big Show centered around the idea that retailers are not merely in the business of selling merchandise, but are stewards of their customers’ lifestyle.
It’s not nearly enough to have great products, service, competitive prices, a unified multi-channel presence and great technology, although all that is certainly hard enough. Now, retailers and brands must articulate their “brand purpose,” be “authentic,” and clearly communicate and abide by the values for which they stand.
The concept was hammered home again and again at the Big Show. Ryan Watchorn, chief marketing and strategy officer at the outdoor brand Cabela’s, said his company’s success has been driven not by selling stuff, but by its purpose to “strengthen the bond between customers and the outdoors.” He further added that selling outdoor apparel and gear “is who we are, not what we do.”
Bruce Cohen, Senior Partner with the consultancy Kurt Salmon, said the best brands have a “deep emotional connection to their customers,” which, he stressed, includes having shared values.
But how does a brand learn about its customers’ values?
Mike Mauler, Executive Vice President and President at GameStop International, said the company uses its 50 million-strong global loyalty program not so much as a way to drive sales but to continually survey customers to see what they want – information that helps prioritize its investments.
“The power of a strong loyalty program is using data to really know your customers,” he said.
Retailers have long known that competing on price is a losing proposition, so they have to offer customers something worth more than a discount.
When larger retailers started selling similar products, Vitamin Shoppe responded not by undercutting on price but “going from selling pills and powders to becoming a trusted partner on our customers’ wellness journey,” says Colin Watts, CEO and Chief Health Enthusiast. That includes reinventing and remodeling its stores to increase engagement with shoppers, helping its customers establish and reach wellness goals, and educating them about supplements and overall health.
Watts’ title, Chief Health Enthusiast, is reflective of another trend – that is, to convince consumers of a brand’s authenticity by bestowing its employees with titles showing they live by its credo. That’s why store associates at Kate Spade are known as “muses” and those at Cabela’s are called “outfitters.”
Martin Newman, executive chairman at Practicology, a multichannel retail consultancy, says this sea change in the way retailers engage with consumers will also drive a shift in the C-suite in the coming years.
“The people landing CEO roles, new people coming up, will absolutely have a background that is customer-facing, because fundamentally retailers need to become service providers, in addition to getting the all the basics of 21st century retail right.”