The fourth annual NRF Foundation Gala took place in New York City on Jan. 14, featuring an awards program and formal dinner that included both silent and live auctions. The event raised more than $2.8 million to support the Foundation’s programs, including educational and inspirational initiatives and student scholarships — and it also showcased a preview of things to come in 2018.
Terry Lundgren, the former CEO of Macy’s, as well as CEOs from major retailers including Neiman Marcus, Petco, 1-800-FLOWERS.com and BJ’s Wholesale Club, shared their insights on the coming year from the event’s exclusive red carpet. One common theme emanated from the execs: Personalization initiatives will determine the success of retail customer experiences going forward.
Here’s what some of the top executives in retail had to say about top trends, technologies and expectations leading into 2018:
Terry Lundgren, former CEO of Macy’s: “The biggest trend is that comparable store sales are positive, and for me that’s the start. The base has been laid, and the hard work that has been taking place the last couple of years has started to pay off. The supply and demand of physical inventory in stores is coming back in line again, and these are all very positive signs for launching positive sales in 2018.
The whole concept of personalization is just on steroids right now, and it’s all about you in this moment in time. Anything we can do for the consumer to connect directly with services, and making things convenient for you, is what it’s all about.
With the growth of buy online/pick up in-store, you’re going to need physical stores. Physical stores are not going away. Customers are still going to want that convenience…they can try on jeans so they don’t have to buy three pairs in three different sizes. This convenience makes that transaction stick when they enter the store. They’re going to buy more than just those jeans.”
Karen Katz, outgoing CEO of Neiman Marcus: “We have a hit industry buzzword. It was ‘transformation’ last year and it’s ‘experience’ this year. Everybody’s trying to figure out how to develop that experience in a much more personalized and intimate way. The people that use technology personalization with a human touch are those who will be successful in 2018.
I don’t think it’s any one particular technology, but it’s a combination of a number of different things that bring together a highly personalized experience. That’s why I think Neiman Marcus and Bergdorf Goodman can win, because we understand that personal touch.”
Christopher Baldwin, CEO of BJ’s Wholesale Club: “We continue to believe that value retailing is going to be a big part of the American economy for a long time to come. We’re using technology to make the trip more convenient, whether it’s the ability to do an express scan or the ability to share coupons on your phone.
Because we’re a membership club, our ability to be very targeted and have what consumers want is critically important for our company, so we’re continually investing in personalization going forward. We have unique insight into what people actually buy. You can’t buy an item in our clubs without a membership card. Therefore we know everything anybody’s bought in our club for a long time, and were using that data to develop marketing programs to help them come back more.”
Mitchell Modell, CEO of Modell’s Sporting Goods: “We’re going through our vendor base in 2018 and shrinking it down considerably. We want to be important to fewer players, the players that invest in their own business as well as ours. The relationships now with the manufacturers have completely changed — we all have to be in sync. There’s less retailers out there so you really have to have a strong working partnership that works for both of you. We got rid of all our tertiary vendors, and we’ve given all that business to our top vendors.”
Christopher McCann, CEO of 1-800-FLOWERS.com: “The use of AI will lead to making the experience more personalized. It’s about utilizing AI capabilities or chatbots, all built on Big Data and deeper analytics. And now with voice integrated into this technology, it’s bringing us back to our very first flower shop — 1:1 relationships. We can now have that same kind of 1:1 relationship on a massive scale.
It’s a product of the entrepreneurial side of our company, which we’ve been able to develop as a culture of innovation. Everybody knows their job is to change how they do their job today. The customer changes it for us. So every time the consumer embraces new technology, our job is to get involved early, and learn right along with them.”
Brad Weston, CEO of Petco: “It’s all about personalization and customization. That’s obviously nothing new, but the bar keeps going up on the level of engagement the consumers see. Retail brands are going to have to do more than just sell products. You have to create an environment where consumers want to do things outside of just purchasing a product. Engage them in the brand in a more holistic way.”
Jane Elfers, CEO of The Children’s Place: “A lot of retailers have announced better results in Q4, and the fundamentals are still the same. Those retailers that were doing poorly before Q4 are going to continue to do poorly because of those fundamentals, while retailers that are strong will continue to be strong. I think we’ll still see a lot more bankruptcies and store closures. I think we’ll see a lot of malls close, which I think is healthy for the industry. It will be better to stabilize the traffic, and the sooner that happens the better.
Depending on the brand, I think you’ll see a big move towards personalization, with more companies rolling out BOPIS or ship-from-store options. In 2018, we’re rolling out a ’Save The Sale,’ where we expose one pool of inventory, and we think that will be a game changer for us for our top and bottom line. Our core customer is a 28-year-old Millennial mom, and digital is growing leaps and bounds. When I first started as CEO in 2010, digital was 9% of our business, but it’s going to end 2017 at 23%.”
James Rhee, CEO of Ashley Stewart: “We’re running a strong women’s influencer platform. My job as the CEO of this company is to encourage her and to give her the tools to be more of an advocate for herself. That influences our entire business. We have to expand beyond retail, and there’s now a convergence of retail and media technology where you have to be a little bit of everything.
We’re expanding our influence to have opinions on non-apparel purchasing decisions. We’ve partnered with Fox Searchlight to help them sell movie tickets, we’ve had our own concert in Brooklyn and we’ve sold tickets, and we’re in discussion with TV and movie production companies to amplify our message. It’s not about clothes, it’s about a lifestyle.”
More than 800 retail CEOs and senior executives, industry insiders, celebrities and students attended the Gala. In addition, four-time NBA champion Shaquille O’Neal presented NRF’s “The Visionary” award to Doug McMillon, President and CEO of Walmart, a recognition for an inspiring leader with a record of spearheading change in the industry.