NRF show buzzes with new tech, big brand leaders
The National Retail Federation's annual show at Jacob Javits Convention Center in Manhattan was a gathering of big name retailers talking about multichannel branding and marketing.
The Jan. 14-17 conference included 16,000 pre-registered attendees from 51 countries, and the floor included 500 exhibitors. Tim Lindner, manager of professional services sales at Sony, was publicizing his firm's retail management system that has quietly been on the market for five years.
"We are there to develop relationships with retailers and to meet with potential clients for integration," Mr. Lindner said.
Sony's retail products included a systems tool that Mr. Lindner compared with Tom Cruise shopping in the film "Minority Report." It tracks and measures customer behavior in the store, much like most e-commerce sites do.
It scans the customer's entrance into the store through a loyalty badge or a credit card. When the system recognizes that a customer is in the store, it points him to offers and sales based on previous purchases. For example, a grocery store might give a customer a discount on Diet Coke because of the customer's buying history, thus doing away with coupon clipping.
Brian Dean, vice president of strategy and marketing at Escalate Retail, was at the show to display cutting-edge retail experience systems. Escalate's latest merchandising software lets retailers contact customers when a product the customers may like enters a store's inventory system.
It sends e-mail to the sales associate's customer about new products. In addition to the add-to-cart feature, the e-mail lets customers make an appointment with their personal shopper. At the appointment, the associate can create a virtual closet based on past purchases and select new products that might fit into such a wardrobe.
Session speakers from well-known brands discussed success stories and future opportunities. Mark Giresi, executive vice president at Limited Brands Inc., shared the secret to Victoria's Secret's art and science of converting customers.
"While product is critical to our growth, it's only one part of the equation," he said. "It's more than just quality of product. We think of this as the value equation, which is combining quality with service, with experience and keeping a competitive price."
One Victoria's Secret store manager boosted sales by focusing on customer service rather than on the size of transactions. Because she increased staff during busy hours, she increased transactions. Daily sales rose by $124,000. Mr. Giresi attributed this to her focus on conversion rather than on dollars per transaction.
But building a solid brand is not just a science, he said. Retail is also an art form. Victoria's Secret focuses on the customer's emotional response through merchandising the stores and making them inviting. The lingerie brand designed its stores with a pink theme to appeal to its core demographic: the sexy, sophisticated woman.
Netflix founder/CEO Reed Hastings was honored by the NRF as Innovator of the Year for his firm's online movie rental business. Mr. Hastings said at a luncheon Jan. 16 that though video is experiencing a tumultuous time with online, downloads and DVDs, the key to surviving is to know the segment. He broke the emerging online viewing channels into three segments. The first is ad-supported networks like Yahoo and Google, which he compared to television. The second is the digital purchase model where Apple and Amazon fit in, and then finally the digital rental model which includes Netflix.
Netflix targets the over-30 market with DVDs and the under-30 market with alternatives like download-to-own, he said, as the younger audience is growing up with the PC-as-entertainment-center in mind.
"Our challenge over the next 10 years is to address the number of growing screens like cell phones, computers and TVs," Mr. Hastings said.