When statements made at the 2019 National Retail Federation Big Show are examined, a number of themes emerge. Leaders in retail are reflecting on similar topics, including direct-to-consumer efforts, social responsibility, diversity, the convergence of online and brick-and-mortar shopping, and customer experience.
NRF gives a broad section of the retail community a chance to ponder the direction of the industry. Here are some of the most notable quotes from this year's sessions made by executives. The statements illuminate strategy and give insight to what lies ahead for brands in the coming year.
Marvin Ellison, CEO of Lowe's
"It starts with retail fundamentals first. As the old saying goes: you can't put the icing before the cake."
Lowe's new creed might seem self-explanatory, but according to Ellison: "we've been serving a lot of icing lately." He's trying to scale back on Lowe's vision and make the retailer focus on getting the small things right before tackling more innovation. After that, it's all about taking market share and planting more of a stake in an industry with "$700 billion of opportunity," he said during a panel at NRF's Big Show. A favorable economic environment could help, but acing customer service and other retail basics is step one for Lowe's.
Rachel Shechtman, brand experience officer at Macy's
"What works in one 2,000 square-foot store is different than what's going to work at scale."
Macy's CEO Jeff Gennette is banking on a future that falls far from the department store tree. During a panel at NRF's Big Show, Gennette talked to the co-founder of b8ta, the founder of Marxent and Shechtman, who founded Story and before taking on her current role as Macy's brand experience officer, about each of their businesses and how they're contributing to Macy's. While Shechtman declined to say exactly when Story would be opening inside of Macy's, she discussed some of the challenges with scaling a concept that was intended for a small-format space and noted that the announcement will come soon.
Hubert Joly, CEO and chairman of Best Buy
"As a leader, irrespective of where you are at the company, you have to be aware of the seduction of power, fame, glory or money. If you're mainly driven by any one of these four, bad things happen."
Leadership is about more than just good business acumen, and according to Joly, it has a lot to do with how you treat your employees — and set them up to succeed. In a panel at NRF's Big Show, Joly talked about Best Buy's efforts to keep employees happy by fostering a healthy work-life balance. That's included giving them more parental leave and providing a childcare system employees can use as a backstop if their own childcare falls though.
J. Michael Evans, group president of Alibaba
"We're not building moats, we're building bridges. And our bridges are between our online business and the offline market in China. ... We believe the future of retail is all retail, online and offline."
In response to a question about comparisons between the Chinese e-commerce giant and Amazon, Evans was quick to push back. At the conference, Journalist Kara Swisher referenced the "moats" Amazon builds to both keep customers in its universe and keep competitors out. Evans objected, pivoting to a discussion of how Alibaba is bridging the online, offline gap. It's a strategy multiple retailers and experts referenced at NRF 2019: an agnostic approach to how and where they reach and serve customers. More retailers have evolved to recognize that consumers research and purchase across multiple channels and see no difference in those spaces — both physical and virtual. Alibaba has long been a retailer to watch as a bellwether for possible future retail iterations, including in this new phase that recognizes a more channel-inclusive, customer-centric strategy.
Chip Bergh, CEO of Levi Strauss
"Unfortunately, what had happened was we lost relevance with the young consumers. … Levi's wasn't even in their consideration."
Keeping a brand relevant over decades is a challenge for any retailer, and one Levi's CEO Bergh tackled head-on at NRF's Big Show. According to a story he told conference attendees, Levi's was once such an iconic brand that his jeans were stolen out of a hostel bathroom in Europe in lieu of his wallet. Yet, when his own children were growing up, Levi's was no longer part of the brand conversation. Bergh noted that the retailer had fallen out of touch with its customer base, essentially passing over a generation, and has been making renewed efforts as of late to get back into the cultural conversation.
Rose Marcario, CEO of Patagonia
"We've done a lot on building those supply chains and I think we all have to come to the reality that we are not going to have virgin supply chains forever because we are running out of resources."
Well-known for its efforts to support grassroots environmentalism, Patagonia is frequently looked to as a leader in values-based retailing. However, the focus during NRF's Big Show lay much heavier on tangible changes to the supply chain. Marcario discussed efforts by the outdoor retailer to have a carbon-neutral supply chain by 2025, noting that suppliers have so far been responsive to those changes. The retailer already works with recycled polyester, recycled cotton and recycled down, among other materials.
Tina Sharkey, CEO and co-founder of Brandless
"Direct-to-consumer isn't a channel, it's a relationship."
Sharkey, who launched the online consumer goods startup in 2017, doesn't think about those who buy her products as customers — they're community. "The thing that's so cool about having those relationships is that they literally tell us, either through their posts, their tags, their emails, their tweets, what they're looking for, and we respond in kind," Sharkey told Retail Dive in an interview. The key to making this message work is authenticity. One way her employees show that is by sending handwritten thank you notes to customers. Like many direct-to-consumer success stories, Brandless has succeeded with a model that cuts out inefficiencies, lowers prices and adapts based on direct feedback on social channels.
Tim Brown, co-CEO and co-founder of Allbirds
"I was craving not being a billboard."
Direct-to-consumer brand Allbirds was built to solve a problem Brown had with his apparel as a professional athlete: too many logos. He set out to design the simplest pair of shoes he could, at the same time prioritizing comfort and environmentally friendly materials. Now, just a short time after its founding, Brown is focused on brick-and-mortar growth and, further down the line, expanding product assortment. At NRF's Big Show, Brown talked about founding his business and how he doesn't see it selling on Amazon — at least not right now.
Christiane Pendarvis, senior vice president of e-commerce at FullBeauty Brands
"When you look at the number of female entrepreneurs that get funding — a fraction of what they should be. When you look at the number of female-led organizations that are able to raise capital — a fraction of what it should be. … If you don't have access to capital you can have a great idea — it will never see the light of day."
Only 2% of $85 billion invested by venture capital firms in 2017 went to female-founded businesses. It's a woeful disparity in financial backing that is only now starting to be discussed. Pendarvis and other panelists, during a session at NRF on female leaders, explained that the number of women entrepreneurs is growing, yet the money for launching those businesses often comes from the entrepreneur herself, while male counterparts are able to secure financing.
Aaron Sanandres, CEO and co-founder of Untuckit
"Retail continues to be an extremely important outlet for us as a company. I think most brands are coming to that conclusion, even brands that have said: 'offline never, we're only online forever.' I think it's somewhat short sighted to believe that."
Gone are the days of pureplay, Sanandres told Retail Dive in an interview. He imagines the men's apparel business, which he dedicated himself to full-time in 2014, will someday have "north of 200 stores." The company currently has 50 stores nationwide. Sanandres' mindset toward brick-and-mortar retail mirrors that of other digitally native brands, which have increasingly moved into physical spaces to grow their customer bases.
Kathy Doyle Thomas, chief strategy officer of Half Price Books
"A lot of the pureplays, the online businesses, they do things really well and they think outside the box all the time. We as old traditional retailers have to keep pushing that envelope to be better, be smarter, add better value for the customer. Everyone keeps saying the same thing — it's the experience, it's what's going to make someone get out of the house and go."
With nearly 30 years of experience at the third largest U.S. bookstore chain, Thomas has seen a lot of change, from the rise of Amazon to the fall of Borders. Rather than scare her, it motivates her to create a better, more relevant experience for today's book shoppers, she told Retail Dive in an interview. Coffee and books is old, she said, adding that brick-and-mortar retailers like hers need to think outside of the box if they want to survive. To start, that means smaller stores, more author talks and enhancing the treasure hunt appeal of Half Price Books. "When I look around at this energy at the show, it's like people want retail to be vibrant. They want it to work, and we all have to believe it's going to work."
Carolyn Tastad, group president of North America and executive sponsor of Gender Equality at Procter & Gamble
"We have to stop imposing one size fits all leadership stereotypes on women and on men. We need to shift our focus from fixing women to fixing the systems and behaviors that perpetuate bias in the workplace."
Diversity and inclusion efforts, especially related to promoting women in the workplace, have become a major topic of conversation in business. But that hasn't yet translated to more progress. During a keynote speech, Tastad told an audience of retail executives that businesses, including her own, need to give junior level women the kinds of responsibilities and experiences that will develop them as leaders. And current organization heads need to address the unconscious bias that affects their hiring and promotion decisions.