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Podcast|October 12, 2021

Retail Innovation: What’s Working, and Not | Future Shop Podcast

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In this episode:

Wendy Liebmann and Candace Corlett walk – and talk – you through a virtual Retail Safari®. They share their latest observations of what’s working and not at retail – from department stores, drug stores, mass merchants, specialty beauty and more...

They discuss:

  • How department stores are winning and losing (yes, some are winning)
  • How retail partnerships -- the Power of Two – are creating reasons for digital-first shoppers to come back into the physical store
  • How creating a “human store” is key to creating a successful customer experience
  • How the idea of a Store of the Future only works if it can be delivered in more than one store

Don’t miss upcoming episodes, stay up-to-date by visiting the WSL Shopper Insights Library, or our Podcast page.


Podcast Transcript

Wendy  00:00

Hello, my name is Wendy Liebmann.

Candace  00:02

And my name is Candace Corlett.

Wendy  00:04

We're from WSL Strategic Retail and this is Future Shop. This is where we talk to innovators and disruptors about the future of retail. What's on Candace and my mind today is what's going on at retail, as we see it as shoppers, personally, but also, as our teams and scouts around the world have been immersed in walking the physical and digital aisles. So we'll share with you what we're seeing. But you should make sure you get out there too, or at least sign up for our Retail Safaris® so we can show you what's going on out there. Candace, in your last What's Up, our weekly newsletter, you talked about some interesting positive and negative retail experiences of late, especially in the department store channels. So vent dear girl.

Candace  00:53

It's the stark contrast. And as a shopper, you stop and say to yourself, why can one be so good and the other be so poor? And as a professional in this industry, you know, the answer, you know.  It starts at the top, it permeates the culture, it's reinforced on every work shift with every employee. This is who we are, this is what our company stands for. And this is how we live what we stand for.  Nordstroms had a strong reputation for shopper service since I even knew how to spell Nordstrom, many years ago. And they came to the east coast. And now they have their store on Broadway and 58th Street in New York City. And the most startling physical interaction is the place, it's all glass. And I never thought about how much natural light even on a cloudy rainy day, how much having nature in the store makes you feel better.  Nordstrom customer service, so I walk in the store, and I'm delighted when the security guard can point me in the right direction. You know, you're walking with low expectations. So I'll give it a shot. Maybe they'll know. And they knew exactly. And we're very explicit about the directions on how I was to get there to pick up an order. And I passed a mannequin that had an outfit that I thought was wonderful. And again, oh, I'll ask somebody. And the sales associate who was not in the department with this mannequin knew what brand it was on what floor it was on two floors up.  A wonderful experience, and then all the light. And you know, that's what encourages you to shop more.

Wendy  02:41

You know, it's interesting. And you'll remember, of course, just before everything shut down, and we had our Big Business of WELL symposium. And one of the speakers talking about wellness was the then head of store design and architecture for Nordstrom, Dawn Clark, who has now gone to Amazon, which is interesting, intriguing all by itself.  But she talked about one of the objectives for that store on 57th/58th street was to create a human store. by human she meant evaluating all those emotional and physical touch points, from light from clean air.  This is way before, three or four months before the pandemic hit about the interaction with people, the sort of generally transparent environment the touch points throughout the store and that's exactly what you're talking about right now. So they've delivered on that

Candace  03:36

someone in that organization has owned responsibility for having informed associates

Wendy  03:43

including the security guys, if you are in the store,

Candace  03:47

you are the face of Nordstrom to the shopper. And then you know you walk over to Macy's and, keep in mind you know, I'm a big fan of the Macy's parades and the flower shows. But if they could just want to store as well as they do those events because we went in for what was to be a happy day looking for bridal registry. No one on the first floor even knew if they had bridal registry anymore, suggested we check housewares on the ninth floor and any of you who have experienced the wonder of Macy's 34th street, it takes a long time to get up those clickety clack escalators till the ninth floor. And then we got there and they said oh no, we don't do it in store anymore. Just upload the app onto your phone and click the things you want.  Well, that takes the magic out of a registry.

Wendy  04:35

And even everyday shopping I've walked into not to just dump on Macy's because they're not the only one who does this but even just looking at the way product is merchandised, even their exclusive product. I mean, we are talking about this is supposed to be a special experience in a department store and certainly, and in other stores, not well thought through anymore. And you remember the work we did some years ago around: How do you improve the quality of the people who work for you in the retail environment? And people complained about oh, well, you know, we can't pay enough and the turnover. That's right. And yes, it's about what people are paid. But it's also about the value, it goes back to other things. We've talked about the value of the people in the organization.  We've talked about a company like Costco, where how they value their people as reflected in the level of service and the experience you have, even though it's a highly discount operation. So there's a lot to be unpacked in all of that. The other thing that we both talked about a lot, is these new retail partnerships that we're seeing whether it's Target with their Ulta, Disney, Apple partnerships, and I know you're really very positive about the Ulta and Target,

Candace  05:45

what we call the power of two. And we'll be releasing a report in a couple of weeks around the power of two retailers joining hands to a give the shopper who's doing curbside pickup or online delivery, a reason to go into the store, I give Target credit.  They have created a very disruptive presence for alter, but not physically intrusive, it's just the bright orange. So it's very well done. It's well with the beauty advisor knew the Ulta line, I don't know whether she was from Ulta or in Target. And it's so you forget that you could not get a Mac, lipstick at Target if Ulta was not there.  You couldn't get Tarte

Wendy  06:32

couldn't get Clinique

Candace

and they're all right there. They thought through the details. They took the best displays from Ulta, or the things that people associate with Ulta, the minis, and the Trending Now, and they made sure that they're very highly visible. The beauty advisor also has a little checkout stand. And just like in Sephora, she checks you out right at that little desk. And she will check out your whole cart,

Wendy

if we understand how the traditional in the store trip has been now disrupted. And it's so easy for us to just sit it out desks order online and drive up and have it put in the trunk. If we really want people to get back into the physical space, we have to ask the question, what is the physical space for?  Those kinds of examples of the power of two have to become really important, aside from customer experience, and people, unique merchandise all of those things that you can't necessarily get everywhere. So I think that's a really compelling learning. And actually, as Candace said, we will have one of our new Retail Safari® reports available on the power of two in the coming weeks. So again, go on to our website at  WSLstrategicretail.com and look at our Retail Safaris and send us an email quickly text us call us. And we'll be able to share with you what's available in our retail Retail Safari® work.  And then Candace, the last one that we've just looked at recently is the new Rite Aid test concept called RXevolution that's in Pennsylvania and New Hampshire. And that's a pretty impressive space right then and there. For those of you who have not yet seen it,

Candace  08:15

it is with no disrespect and all admiration for Rite Aid. They have really pulled this one off, it is beautiful. What's the first thing you notice? The natural light and Rite Aid has taken away some of the walls created a lot of natural light, a human store, just like Nordstrom, they don't let any display encroach upon the natural light. It's not like piling stuff up to the ceiling and blocking the light. The displays are 360. So you don't have to be standing right in front of it. You can approach it and access merchandise from anywhere around the display, which I think is a much more powerful way to create an endcap.  The pharmacy promising that the staff understands alternative medicine and traditional medicine. I didn't personally go and try to experience that. But that's a huge promise. What do you stand for? And are you delivering what you stand for? Hopefully they'll deliver that.

Wendy  09:16

Yeah, and what's really interesting in that that's very reflective. I mean, I know their focuses around millennials and Gen X in those concept stores. And that that's certainly what we've seen in all our How America Shops® research, you know, especially for younger, you know, looking at alternative care looking at natural remedies. It's also very tactile, which is very interesting in a day and age where you know, everybody's running around thinking about where technology fits, the technology doesn't feel like it's right in your face. It enables so much of what they're doing, but it does not in fact, overwhelm it. And actually products, experience light ,the greenery very interesting and compelling. You can see how they've taken some of the concepts they had worked on before in some of their stores, and brought them all together. I think the one thing for me, when you do it in three stores, and we get it, we get it. It's sort of this future of, the Store of the Future. The challenge there is with any kind of flagship concept is how do you get it out? How do you learn and understand, you've got to learn, you've got to figure out what works and what doesn't before you send it out for 3000 stores, you cannot afford not to do that, because these stores do not justify, as many flagships do not, the overall cost structure of the execution or the fit out or whatever. But that's the big challenge.

Candace  10:37

If I was voting on the elements, I would say, take down a lot of that concrete and just put up glass, that light and that having nature in your face while you're shopping in a store that supposed to be healthy is wonderful. They have taken the beauty department and it's like they had a great awakening that said, we don't have trained beauty advisors in a drugstore. So let's put signage that takes people through the steps. How do you capture the eye look you want. 1234?  And it's like, oh, and then the products are right there.

Wendy  11:11

But the other thing I love is they've created that environment where it shows you sort of the ingestibles for beauty. Yes, it's  skin deep. Right, exactly. And that piece, and then you get into more traditional beauty categories. I will say this, they very much curated the offer the merchandise mix, so they've been willing to kind of step back and not overload things. So even where you've got shelves and the usual gondolas, they don't feel like their so overloaded. So that's a bold step.

Candace  11:40

And there's a lot in this store, I liked your including, you know, they promise a spa, so they hang artificial greenery all over, that delivers a spa. And very simply. They promise integrated medicine advice, I'm not sure they can deliver that in 3000 stores, but the things that they can deliver, they need to take forward, everywhere.

Wendy  12:02

Yeah. And you know, the other thing I'll say about this, because this is really my hot spot at the moment, when people talk to me about Store of the Future, I get annoyed, because I do feel that you know, everyone puts it into sort of one concept that is sort of set in stone. And then has to  stay in stone for the next decade, because they can't afford to do anything else with it. But I think about what we've seen in the 711 Lab store in Dallas. And what's very clear about that is that they've got so many things going on there that you can see, they built that lab in a way that you can see what they're testing, and you can absolutely anticipate where it goes. And we saw the same in the Mecca, flagship beauty flagship store that opened in Sydney in Australia in November, that even though it's this 20,000, square foot temple to all things, beauty, there are so many components to that, including their live streaming, how they take sessions and makeup and artistry sessions in the flagship, and then send it out live streaming to their individual small format stores around the country, or even how they're now creating the localized team events in each store, where the team, the people who work in the teams, are actually inviting local shoppers, beauty shoppers in to or virtually to experience some of this. So the really smart retailers to me are already building that modular innovation strategy. So hopefully Rite Aid is doing the same thing.

Candace  13:29

And your comment around the edited curated merchandise, I have to say in both the Target and in this Rite Aid RXevolution, there is almost no inventory

Wendy  13:41

Intentionally?

Candace  13:42

No, I cannot believe it's intentionally. No. And that may be very flattering to give them credit for curating. But I think they need more than six pieces on a shelf on an endcap to make a statement.

Wendy  13:54

Yeah, well, and that is a whole other podcast about supply chain issues, and all of those things that are occurring.

Candace  14:00

Just one other comment on Rite Aid, they even carried it through to the back-to-school displays, because I was curious whether it would just be the backpacks, pens, pencils, but they are carrying a brand, that for every pencil you buy gives a pencil to a community where children can’t afford pencils. So they're against standing for something. And they found good ways to execute against what they stand for.

Wendy  14:25

Well, that's encouraging because it does say that there’s a retailer that's had its own struggles over the last five or even longer years, who are finding really compelling ways to innovate. So with all of the good news and the challenges, there's a lot of innovation that's going on at retail. So it's really exciting to our so if you want to know more about me and all of that, again, WSLstrategicretail.com look at our Retail Safari® portfolio, and you will be able to engage with us and see what we see around the world. So thank you again, Candace. Thank you, everyone. See you in the future.

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