Report from the National Retail Federation's Big Show
Posted by Rick Segel on Mon, Jan 18, 2010 @ 01:58 PM
Last week I traveled to New York City to attend the National Retail Federation's 99th annual trade show and conference. Retailers came from around the world came to see the latest and greatest technology, trends, ideas, and tools. Let me share my impressions and some of the tools of the future that are available today.
On many occasions in this column I have explained why I have been more bullish about retail business than some. That reason is that when I attend a conference and I do my unscientific survey of asking people how business is, I generally get a response such as, "not bad". The reason for that is the majority of the conferences I attend are specifically designed for independent specialty businesses who have fared much better during this recession. Couple that with the fact that the people who generally attend these conferences are the cream of the crop--the people who are always looking for an edge or an idea that will improve their business. In short, it's the winners who attend the conferences that I go to.
This show was different. It is the conference that primarily large stores attend. Their businesses had definitely experienced the recession and did not fare as well as their smaller colleagues did. So independents give yourself a pat on the back! Along with that observation, there was a theme that was repeated again and again and many of the sessions. That theme pertains to the concept of being "customer centric." Speaker after speaker talked about the importance on focusing on the customer more so than ever before. Duh? I don't get it. What were they focusing on before?
I suppose it seems silly to me because specialty businesses have always had to focus on the needs and wants of the customer. We have never been in a position to dictate to a customer in the way a larger business could. It's not that the larger stores ignored the wants of the customer but they just did not address them in the same way that an independent addresses the wants and needs.
One of the biggest trends that will be affecting all of us shortly is what is now called M. commerce, Mobile commerce or the use of the cell phone. The amount of applications using cell phones was staggering. I think the application that impressed me the most was the use of text messaging in ways that were both effective and cost conscious. Here is one application of text messaging that we all will be doing shortly. You walk by a store, receive an e-mail, or even read an ad in the newspaper, and you read a line that says TEXT 34553 and type in "specials" and within seconds you will receive all of the stores specials, featured products, or sale items sitting right on your cell phone. You can even get pictures and full descriptions.
Think about what happens when someone responds: you have just attracted a new customer that has opted in to your customer database list. Think how simple, seamless, and effective this tool can be. I can't think of another form of marketing/advertising that creates interest and captures customer data instantly. Obviously this tool should never be abused and the process to opt out must be as simple as possible, otherwise we run the risk of killing the goose that laid the golden egg. Remember texting is working now because we have already abused emails.
Some of the other applications that cell phones are being used for are as mini GPS devices in stores to help the customer find the department or items they are looking for. Obviously this is designed for larger businesses.
Cell phones are also now being used as remote credit card terminals. You can have a device attached to your cell phone that will allow you to swipe a credit card through. The implications of this technology are endless. You can eliminate long lines in the cash counter; you can close the sale much faster and eliminate that indecision time for customers who might be on the fence.
The other interesting use of a cell phone which can be used both by customers and store personnel is a barcode reading feature. From the retailer's point of view, a simple scan can unlock lots of information that can be useful in a sales presentation. From the customer's perspective, there are apps for the iPhone and Blackberry that allow you to scan a barcode and send you a report of stores and/or websites that sell the same product and report the various prices. This takes competitive shopping down to the size of your phone. That's scary and the reason why private labels are becoming more important than ever before.
The last cell phone application that is bursting onto the new retail horizon is the use of coupons delivered to your cell phone and used from your cell phone. Talk about saving paper! This is a powerhouse. Instead of carrying around an envelope with all the coupons, they are stored on your cell phone. Then you simply scan it from your phone into their computer system. If you happen to have a profile posted to the store's database system, that simple scan can process the sale using the credit card on file. Are you starting to get the picture that the cash counter of the future might start to look little different?
The next biggest WOW and trend that many of us will be adopting this year is the use of the flatscreen monitor for digital signage. The price of these screens is dropping to a point where they have become affordable to almost every size store. They can be used in so many different ways, from welcoming the customer into the store, to showing merchandise that you don't have a stock but it is deliverable within a day or so are. As powerful as this application is you might consider waiting before you jump in here. The reason for that is I believe vendors will start to see how powerful this tool could be to help promote their lines in stores and will start creating programs that will offer free flat screens to show their images and messages within your store. It's like years ago when manufactures would supply stores with fixtures. I haven't seen it yet but it's just too great an opportunity for any vendor to pass up.
I have to report about one display that everybody was talking about. It was a unique use of projected images that just WOWs you. The name of the company that created all of this is Potion. As you can see in the first picture, there is a table/platform that is a shoe display. It has spotlights above that highlight this but it appears to be nothing out of the ordinary. 
However, when you pick up the shoe, information about the shoe is now projected onto the platform as you can see in the second image. Of course if someone puts the shoe back in the wrong spot, the display won't work. But talk about signage that doesn't clutter your store! The third image just shows the way the camera is mounted above.
Potion has many different applications for this technology and I could go on and on but this was breathtaking.
There was one other interesting thing that happened during the Retailer Awards Luncheon. There is an annual People's choice awards for the stores with the best customer service. Out of the 10 best stores selected by over 80,000 shoppers, five of those businesses are online businesses. The winners were:
10th Place Tie-Nordstrom's & Kohl's
9th Place-- JCPenney's
8th Place-Lands' End
7th Place-- Home Shopping Network
6th Place--Coldwater Creek
5th Place--QVC
4th Place--Amazon
3rd Place-Zappo's
2nd Place-- Overstock.com
1st Place-- L.L. Bean
When you look at this list, you realize that there are only four traditional retailers: Nordstrom's, Kohl's, JCPenney, and Coldwater Creek. The world is changing.
Zappo's also won the award for the most Creative Retailer of the year and the Retailer of the Year went to Ralph Lauren. That's interesting in the fact that Ralph Lauren is a manufacturer that sells to retailers and also has hundreds of his own stores, in all different varieties around the world. There was a time that any vendor selling to retailers and competing with retailers would never even be considered for an award. The times, they are a-changing.
Needless to say, the show was inundated with sessions pertaining to social media and its many uses. The conversation focused primarily around Twitter and Facebook. I finally saw the power of Twitter in the example of when a customer complained about Saks on Twitter. Within six minutes, the complaint was handled and the customer was satisfied. Twitter is starting to find its home.
There were many applications for Facebook but the one takeaway was that Facebook is not a one-sided conversation. Stores that look at it as traditional advertising are making a big mistake. It is social media and it must be interactive.
Let me just end with the line that I heard from the CEO of Saks. It's been a rough year but let's not waste a good recession. We have all learned some very valuable lessons from the economic climate we have lived and are living through. We have learned to do more with less. Those values will make us stronger and better in 2010 and beyond. They are right-- it is about the customer and no one understands it better than the independent. We have a lot to look forward to!