Retail's Next Frontier: Back-to-Basics Strategy and Customer Value Creation
FSW explores key takeaways from The 2024 Lead Summit in NYC and what they mean for the future of brands and content.
Insights
The retail business landscape is tough, but there are opportunities to leverage.
Omnichannel is about differentiation, not ubiquitousness.
Since the luxury industry is going through a “tech reckoning,” brands should work to build internal capabilities and look for the right partnerships.
To get ahead, brands should remember their core brand “why,” invest in content strategy, and focus on customer experience.
“Loyalty comes from non-transactional customer value.” - Linda Li Steiner, Head of Customer Activation & Marketing, H&M Americas
This week the Fashion Strategy Weekly (FSW) team was on-site at The Lead Summit in New York City. We heard many interesting discussions about retail commerce, branding, content, and customer experience and how technology impacts the web of the brand-consumer relationship.
Deciphering a single theme for a conference like The Lead Summit is nearly impossible. Held over two jam-packed days in New York, The Lead Summit is one of retail’s most popular conferences. This year’s version did not disappoint and was full of enriching panel discussions, seminars, workshops, and meetings.
Areas of focus for conference sessions ranged from timely conversations about retail in the age of TikTok and the current state of e-commerce to AI and the evolution of the retail-technology relationship.
After two days of deep diving with retail experts and brands, it is clear that the future of retail continues to be buffeted by many challenges but new opportunities. Brands have a lot of work to do to avoid obsolescence and to stay relevant in an age where consumers increasingly expect tailored content-driven experiences.
Here are some highlights from our favorite sessions.
Omnichannel Means Differentiation, not Sameness
Not surprisingly, omnichannel and e-commerce were the topics of several sessions.
On Tuesday, Linda Li Steiner, Head of Customer Activation & Marketing, H&M Americas spoke at length with Danny Parisi of Glossy about “reimaging stores” for today’s omnichannel consumers.
Steiner distinguished between “omnichannel” as a brand philosophy and what it means in practice, particularly in building synergies between in-store and online experiences. “Omnichannel doesn’t mean only,” she noted, emphasizing that when it comes to content brands need to differentiate approaches and embrace each channel’s individuality.
“When it comes to omnichannel,” Steiner continued, “[S]o many brands say ‘yes this is what we should do. We need to do this differently.’ Yet executing that is hard.”
As Steiner and Parisi discussed, many brands think they’re doing omnichannel when in reality critical business functions like product, content, and even supply chain are unintegrated and not tethered by a common strategy. This often results in disconnected experiences for customers and can be disincentivizing for employees.
When it comes to customer shopping experience and habits, Steiner underscored that “Every single journey looks different. Most journeys start in the store…. [But t]he journey can start and stop in so many different ways.”
To track customer behavior and learn from these different journeys, she pointed out, brands first should “[m]ake the most of what your tools and data can do,” before investing in new solutions.
Retail decision-making should stem from a core strategy that allows the brand to plan but react quickly, when necessary. Steiner noted, “What’s super interesting about shopping now is … trends move so fast…. All of a sudden as a brand do I stick with the plan I had or react quickly and employ new tactics?”
Of course, this type of strategizing can be harder for big brands like H&M because it’s simply harder to be agile and reactive.
Retail Needs Content Strategy
Content was also a huge topic at The Lead Summit. When it came to content, discussions centered either around high-level strategic approaches to content concerning corporate vision and brand strategy or deeper practice-led workshops on content marketing tactics and creative case studies.
In conversation with Christine Russo of Retail Creative and Consulting Agency, Scott Lux, Global EVP of E-commerce, Technology, and Innovation, Esprit, noted three pillars to which retailers should pay attention:
Focus on why do we exist
Focus on our content strategy
Get back to customer experience
He further emphasized that a lack of integrated strategy for content produces reactive, tactical decision-making across channels that are likely counter-productive for a brand's retail future. Siloed teams can result in siloed, unauthentic content and too much tech all over the place that may be a waste of time and resources.
In a different session, Melissa Worth, SVP, Americas, New Balance chatted with Jill Manoff, Editor in Chief, Glossy about how “flipping the funnel” and taking a consumer-led approach to brand, product, and content “was a game changer.” Being known as the brand of the “dad shoe,” her teams has been making progress in climate the steep hill attracting younger consumers without turning away their base audience.
Two important changes New Balance made with content were to “bring everything [marketing] all under one roof” and to focus on one audience at a time, rather than four different audiences simultaneously.
Of course, as Worth noted, determining the current state of their brand DNA and what it means for their overall content strategy remains an active conversation and they still have more work to do.
Luxury D2C Needs Strategy and Infrastructure
One of the most intriguing sub-themes of the conference concerned the need to re-evaluate retail’s relationship with tech.
Citing AI fatigue, many brands talked about a desire to streamline tech and tech spend. Tech-focused sessions centered around practical discussions about specific use cases and focused case studies on what brand teams learned to more esoteric discussions about how to determine what tech teams need to get the job done and how to build better, more profitable relationships with tech vendors.
Scott Lux of Esprit noted, “[T]here’s too much slapping of AI onto solutions” for questionable results. He also commented that vendors and brands “need to be friends” to make the brand-tech equation truly work.
In a session focused on the future of luxury shopping, Leila Jalai, SVP Global Planning and Inventory, David Yurman, had fascinating insights on luxury’s path forward in D2C. She discussed at length how before the pandemic, luxury was in a comfort zone with wholesale and their back-end systems were unprepared for the radical shift to online.
As this session explored, the fall of Farfetch and Matchesfashion recently should be a wakeup call for luxury, particularly with very real threats from fast fashion and the D2C model as a whole. Jalai emphasized that brands need to adjust systems to handle scale and manage high but changing demand and they need to be cloud-based, investing in basics like CRM and warehouse management.
Jalai discussed the need for better data strategy and forecasting in luxury. Luxury brands have more control over brand and customer experience with D2C than wholesale, which should make it easier to keep up and learn trends. But to do so you need robust inventory management, planning, and forecasting, capabilities that are underdeveloped within many brands.
Also, Jalai noted that both customer experience and personalization need to be upgraded to build seamless experiences across touchpoints and to provide more integrated customer support. Further, she highlighted that since luxury is not about speed but craftsmanship, brands should introduce AI and other technologies purposefully with attention to putting humans and tech together.
Of course, as with all digital transformation, change management is key to long-term, meaningful adoption to ensure that technologies are integrated well into a brand’s culture and organizational processes. Unfortunately, Jalai notes, luxury is really challenged when it comes to change management. So, the goal with luxury tech should be to focus on improving systems without impacting craftsmanship or creative vision.
Based on everything we heard at The Lead Summit, retail isn’t in dire straits by any means. Yet brands need to keep taking a test-and-learn approach to stay focused and nimble.
As Scott Lux of Esprit noted, "Retail is really really hard, especially with technology and e-commerce."
Brands cannot rest on their laurels doing things the way they always have and expect to stay strong and relevant in today's constantly changing, content-driven commerce landscape.