“If you don’t stand for something, then you stand for nothing,” asserts retail veteran and former FedEx-Kinko’s CEO Gary Kusin. Today’s sophisticated and highly informed customers demand more from the brands, product or services they buy.
Companies that offer higher purpose beyond profits are reshaping the future of retail. This theme was a recurring message of the 2011 Retailing Summit, a conference hosted in Dallas by Mays Business School’s Center for Retailing Studies. For two days, almost 300 retailers from 80 companies heard 11 retailing experts explore current trends.
John Mackey, co-CEO of Whole Foods Market is an ambassador for conscious capitalism. This group of CEOs practice “conscious leadership,” rejecting an exclusively profit-driven view of business. They seek win-win strategies that offer value in multiple dimensions for all stakeholders.
Whole Foods Market is a leader in the movement “Conscious Capitalism.” John Mackey, co-CEO, says “poverty, not wealth is the problem.” Capitalism is a mutually beneficial exchange system that has lifted billions of people out of abject hardship. Capitalist societies are freer, wealthier, healthier and happier. By abandoning outmoded operational structures that emphasize shareholder profits above all else, companies can generate emotional, social and financial value. His describes Whole Foods Market stakeholders as SPICEE (Society, Partners, Investors, Customers, Employees and Environment.)
Conscious Capitalism was co-founded by Mackey and Dr. Raj Sisodia of Bentley University, who also spoke. They advocate the embrace of free markets, competition, profits and trade. They recognize, however, that companies wield enormous power, and an obligation, to do good in the world. Sisodia says, “Southwest Airlines gives people the freedom to fly, REI connects families with nature, Google bridges the world with knowledge.”
Hitting bottom and rebounding
Between 2002 and 2006, Pier 1 Imports profits fell $400 million. That staggering plunge resulted when the world’s original source of unique, global dÃ©cor and furnishings lost its way. Alex Smith took the helm as CEO of the troubled retailer in 2007 refocusing on company management, merchandise assortment, supply chain effectiveness, real estate reductions and building customer loyalty.
Pier 1 Imports boosts profit margins by offering more inexpensive dÃ©cor merchandise. Summit attendees experienced a preview of holiday ornaments, candles, and gift ideas during CEO and Chairman Alex Smith’s Retailing Summit presentation.
However, the “Great Recession” of 2008-2009 made the turn-around even harder. Pier 1’s stock bottomed out at less than a $1 a share in 2008. To recover, the company created the “Our Compass” concept. Pier 1’s plan to return to profitability was communicated to every employee. While eliminating non-core businesses, such as Pier 1 Kids and its e-commerce site, the 1,000 store chain rediscovered its defining position: to connect customers with exotic, colorful, global treasures.
To convey the vitality the company exudes today, Smith — with the help of a speedy visual merchandising team — surprised and delighted conference attendees by transforming a plain speaker stage into an elegantly, whimsical holiday living room featuring metallic ornaments, scarlet pillows, and bejeweled vases. To further encourage conference attendees to shop Pier 1 Imports, each one received $25 gift cards.
Connecting with customers — and employees — through technology
Technology has fundamentally reshaped how consumers shop and buy. While information is power, it’s also overwhelming. Tom Lamb, SVP of Marketing at Lowe’s, revealed a new planning tool for the do-it-yourself consumer: MyLowes.com. The site tracks purchases, like paint color, sheen and brand; downloads product manuals; sends reminders about lawn fertilizing; and maintains project lists. The new service eliminates hassles like finding lost warranties or rebate notices. Via technology, it brings simplicity to the sometimes frustrating world of DIY home improvement. The company’s 42,000 employees will receive iPhone 4s, enabling them to take customer orders and answer questions.
Tom Nealon, who heads jcpenney’s $1.4 billion website jcp.com, advised “get rid of the idea of multichannel.” The shopping experience between store, web and mobile devices needs to be seamless as that is what customers expect. Like all other retailers, the Plano-based chain is constantly updating its digital platform, abandoning its long-iconic catalog business. Today, jcpenney aims to be a destination for “fast fashion,” whereby merchandise evolves from design concept to sales floor in ten weeks, a process that is usually XYZ.
Unique recruitment opportunity
While the Retailing Summit’s target audience is the seasoned retailing professional, 27 Mays students also participated. With Texas A&M University’s emphasis on high-value learning experiences, these top students can boast about rubbing elbows with CEOs. Half were graduate students enrolled in the MS in Marketing program and the others are M.B. Zale Leadership Scholars. All understood contacts made at this conference can lead to a job. In fact, H-E-B hired three students from the 2010 conference. Two other recent graduates joined as participants this year. Natalie Robinson ’10 recalled, “I met Billy Payton in line for coffee at the Summit. We simply struck up a conversation.” After finishing her bachelor’s and master’s degrees in marketing, she joined brierley+partners, a CRM consulting firm after graduation.