Major Themes from the LIMA Retail Symposium
Big data. Digital Marketing. The ongoing transformation of retail, and its implications for brand owners and suppliers. Tips on selling into retail.
These and a host of other topics took center stage at LIMA’s 2nd Annual Retail Symposium, presented in association with the Terry J. Lundgren Center for Retailing at the University of Arizona. The eight sessions offered a variety of strategic insights and tactical advice for the licensing community, all centered around the challenge of “How to Collaborate in the New Retail Environment.”
Here are some of the major themes of the Symposium:
The quantity, range and quality of consumer and sales data being generated in the retail and marketing business today is unprecedented. As keynote speaker Paco Underhill, CEO of Envirosell, noted, “Retailers across the world are overwhelmed with information. There is too much data and not enough creativity or processing ability.”
Or, as Raymond Nadeau of Living Brands Living Media Communications, put it, data is by definition old, because it has to be collected. Observing subjective trends can add a different perspective than data, because people who are observing can be better suited to evaluate the situation because they aren’t busy collecting data.
The nature of the information is changing – or, rather, growing — with traditional hard sales data being augmented by “soft” data such as consumer comments and brand interactions on social media. “Everyone is trying to harness Big Data,” said Carol Spieckerman, President of retail consultancy newmarketbuilders. They’re moving “away from POS and transaction analysis [looking in the rearview mirror]… toward understanding intentions, interests and connections… that are a better indicator of what people are going to buy in the future.”
As retailers gather information on their own shoppers – culled from POS as well as from their websites and mobile apps – they won’t necessarily be as willing to automatically share their insights with their suppliers. One reason: the growing importance of their own private brands.
Mary Rachide, who until earlier this year led private label efforts at Family Dollar, said that with insights from their private brand business, “the retailer is uniquely positioned now more than ever before that they might now know more about their shopper than [national brand owners] do. And because they know more than you do, they can turn that into opportunities to increase sales, to drive margin and to become a more important destination for their shoppers.”
The Evolution of Digital Marketing
In his opening discussion on the licensing business from multiple perspectives, former Mattel Brands and Toys R Us President Neil Friedman said the constant evolution of the media landscape – with so many media options and so many properties trying to make their way onto the market — “how you reach the consumer is going to become, ultimately, the biggest issue, because if you just do what you used to do, next year it’s not going to work…. If you’re not digitally savvy, you’re not going to succeed in this business anymore.”
It’s a theme that popped up regularly throughout the day. When Macy’s Chief Marketing Officer Martine Reardon gave a case study presentation revolving around the company’s all-encompassing Brasil promotion, a healthy portion was devoted to both instore platforms – specifically augmented reality (AR) technology that let customers access Brazil-related programming and information on their smartphones in the store — and the way that the Macy’s mobile applications integrated with the rest of the promotion.
Reardon says there’s been a steady increase over the past two years in the number of customers who use the AR technology for “going straight to Macy’s.com to actually click to buy. It’s showing me that customer adoption is there now; they know what it is and they like it.” Those using it tend to skew younger, and are using it “more for entertainment and less [for] product knowledge.”
But those kinds of non-purchase interactions have their own value, said Spieckerman. The insights gleaned from consumer interactions on retailers’ websites – or for that matter, the websites of brand owners and manufacturers — are gold, “even if they’re not all purchasers,” she said. Brand owners and retailers need to understand that they’re not just in the brand business, but also in the consumer engagement business. In the digital realm, they need to have content to entice potential purchasers; “A lot of this environment is about upselling from free,” she said.
Bill Cross, VP of Broad Street Licensing Group, pointed to his own Millennial kids as object lessons in how marketers needs to re-examine their practices. “In terms of actually impacting the way consumers buy products, digital is very much here to stay,” he said. “Millennials don’t read physical newspapers, so an FSI means nothing to them. They won’t take a physical coupon, but they will load up their customer loyalty cards with digital discounts.”
Do the Research
Sometimes it’s the simplest advice that means the most. On more than one occasion, Symposium presenters spoke to the value of basic research.
Cross told licensors to “get off your pedestal. Get off your high horse. Go into a retailer and know their business. I find a lot of people in the licensing business do not have a very deep understanding of how grocery really works. Do you know about slotting fees? Do you know who charges slotting fees and who doesn’t? Do you know about promotional dollars? Do you know which retailer needs them a lot, and who is interested in just pricing? A lot of licensors don’t take the time to really understand the food business, and I think that’s a real failing on their part.”
Underhill approached the same subject in a more understated way as he summed up his core professional beliefs. Holding aloft one of his shoes, he said that “I believe fervently in rubber-soled shoes. As a researcher in the world of retail for almost 30 years, I’ve seen the finest ideas fail for the stupidest of reasons, because someone didn’t go out on the floor to take a look.”
In a future posting, we’ll examine other major topics from the Symposium.