Andrew Vernon, October 22nd, 2018
The Center for Retailing Studies of Mays Business School hosted its annual Retailing Summit on Oct. 11-12 at the Westin Galleria in Dallas.
The conference featured keynotes from Blue Bell, Dunkin’ Brands, Walmart, Sephora, JCPenney, REI, YETI, Orangetheory, Citi, Mattress Firm, Root Inc., and Brierley+Partners.
Key themes for the 2018 Retailing Summit included:
- Inspiring retail stories
Creating meaningful customer experiences
- Brand authenticity
- Adapting to meet the needs of consumers
- Dealing with change
“At Mays Business School, we are committed to developing transformational leaders who challenge the status quo and inspire others,” says Kelli Hollinger, Director of the Center for Retailing Studies. “Through the proceeds from this conference, we are able to support the next generation of retail leadership.”
How JCPenney is sizing up its men’s business to meet BIG expectations
Kicking off the 2018 Retailing Summit was James Starke ’97, Senior Vice President and Head of Merchandising at JCPenney – a graduate of Mays Business School.
Starke described how JCPenney has become the department store leader in the “big and tall” category of men’s clothing, explaining that the population of men that fit into the “big and tall” category is growing rapidly as the average size of men in America continues to increase. Despite the fact that 34 percent of the men’s population fits into the “big and tall” category, “big and tall” clothing only represents about 8 percent of apparel carried in the menswear business. Recognizing the need for accessible “big and tall” clothing, JCPenney stepped in to serve the underrepresented population while effectively growing their customer base. Taking into account that men are very brand loyal, JCPenney created a selection in which over 50 percent of their “big and tall” clothing was nationally branded.
Starke showed campaign videos from JCPenney’s collaboration with Shaquille O’Neal for their “big and tall” selection. The audience of the summit loved them, and it was clear how successful this partnership was for both Shaq and JCPenney. Not only is Shaq passionate about making “big and tall” clothing accessible to the average middle-class American, his likeable personality, charm, and fit for the brand was impeccable. Perhaps the most memorable of the videos featured Shaq as the best summer intern at JCPenney.
Special sizing has grown to be a huge market in America and is projected to continue to grow. Retailers would do well to learn from JCPenney to grow their customers by serving neglected consumer groups. For JCPenney, inclusivity has brought immense success.
A different kind of company: How REI creates connections and uses purpose to lead a business
Rachel Ligtenberg, Vice President of Retail at Recreational Equipment Inc., Co-Op, spoke about how the company creates purposeful connections with consumers. The key differentiator between REI and other outdoor companies is popularly coined as their “quadruple bottom line”: business, employees, members, and society at large. Last year REI brought in over $2.6 billion in revenue and runs all of their facilities and operations on one hundred percent renewable energy. With over 12,000 partners, they have contributed over $56 million in profit sharing and other incentives for their employees. Additionally, REI partners with 400 nonprofits, reflective of their commitment to the community.
In 2016, REI launched a campaign hoping to inspire vision and courage during a divisive time in national politics. From their belief that nature can be an aligning and convening place they launched a campaign centered around the slogan, “Left side, right side, united outside,” to promote bipartisan legislature that ensures access to high-quality outdoor programming for all, regardless of political affiliation. More recently, REI has taken on the mission to empower women, particularly in the outdoor industry. One area of the company that brought this issue to light is the disproportionate representation of women on staff in technical roles. Their latest campaign, #forceofnature, aims to encourage women to step out of fear of what society says they “should be” and embrace who they want to be. REI believes that their people are the engine and soul of what drives their vision – women being a vibrant and vital part of that vision.
One of the cornerstones of keeping their stores focused on keeping people as a priority are community events such as group camping, wilderness certifications, and even an Adventure Craft Club. To conclude her keynote, Ligtenberg cited the poet Mary Oliver, asking “ What is it you plan to do with your one wild and precious life?” as a charge to the 25 young business students in the audience. Rachel Ligtenberg demonstrates how REI has leveraged connection and people to lead a different kind of company that prioritizes purpose over profits. Now that’s an inspiration.
Making the ordinary extraordinary
Mattress Firm is facing bankruptcy, leading everyone to wonder how the company will react. Sunni Goodman, Mattress Firm SVP of Communications & CX, explained that their solution is not something new and outstanding.
Goodman explained the first step of turning the typical into tremendous is value. When mattress sales slowed, Mattress Firm decided to run a special featuring a free adjustable base and cheaper mattresses. When the advertisement was released, sales skyrocketed with lines of people trying to get a new mattress. But with this huge success, the company realized they created too much value. Most customers were content on having either the adjustable base or cheaper mattress and the extra was lost profit for Mattress Firm. However, Goodman says this opportunity helped the company build better relationships and gain insight on customers that couldn’t have been dreamed up.
The second step of turning the regular into remarkable is people. Goodman states Mattress Firm focuses on giving everyone a voice, even local workers on the floor. The company creates opportunities to foster creativity and voice through million-dollar idea contests, national employee chat boards, and annual “Bedtalks” (Mattress Firm’s version of Tedtalks) for all its employees. She shared an example of an idea that improved mattress shopping that came from a floor worker. They suggested color coordinating the levels of mattress softness, a simple idea that made the shopping experience more seamless and boosted sales. By always having a channel for associates to talk, Mattress Firm can capitalize on strokes of genius and enhance employee morale.
The last step of flipping the everyday into exceptional is viewpoint. Traditionally, mattress selling isn’t glamorous, however, Mattress Firm looked to change that perception. To create more buzz, Goodman explains they decided to make boring things fun. When hiring a new intern, Mattress Firm wanted candidates to be excited to apply. The solution: the Snooztern, “the internship where they pay you to sleep.” They required applicants to send in a video on why they should have the position and then posted them on social media for people to vote. It went viral and was featured in the news as they were picking the winner. By creating a more interesting story, Mattress Firm attracted quality candidates and marketing that was nothing to snooze on.
Goodman ended with a quote that summed up Mattress Firm’s motto when it comes to everyday business: “It’s the ordinary moments that make life extraordinary.” Because finding the right mattress shouldn’t put anyone to sleep.
Kirk Zambetti, SVP of Sales for YETI, spoke on the importance of authenticity, a concept that can often be lost in translation for retailers experiencing growth. He posed two questions to audience members, regarding their respective companies, “…you have to answer, who are you? [And] what will the customer allow or want you to be?” The tone in this presentation was set with YETI’s “never settle” attitude, which has transformed them from a small family company founded in 2006, into becoming an inspirational brand with a nationwide presence.
Zambetti mentions that in order for a brand to remain sustainable, it must be authentic in the marketplace place, which is often driven by consumer faith in the product. The YETI brand focus emerged from being product focused, so quality and problem solving remain central to what they stand for. YETI continues to seek “opportunity to find frustration and create a solution,” according to Zambetti. A direct example of such product quality is YETI’s classic Tundra cooler. The product itself remains the same as it was in 2008, yet sales continue to grow year after year.
In addition to product value, the company also focuses on hiring employees and brand ambassadors that make YETI a “DNA-driven” organization. The company continues to reap the benefits of having sales people, or “Yetizens,” who “passionately convey the YETI story in a way that’s authentic, premium, and inclusive” as stated by Zambetti. YETI also leads in authenticity through their interactions with brand ambassadors. Instead of using these individuals to increase brand awareness, the company is more focused on remaining relevant among each of their communities. YETI partners with professionals in a variety of outdoor sports and activities, such as fishing, hunting, barbequing, and ranch handling. YETI’s goal in bringing new ambassadors to the team is simply to be used in their “pursuit.” YETI supports each ambassador’s journey in a way that coincides with the company purpose to find solutions for their customers.
The company’s following has grown to include people coming from all walks of life, which is driving the brand to be the connection between inspiration and aspiration in the outdoors space of retail. YETI’s redefined brand pillars include “restlessness, togetherness, toughness, and playfulness,” and encompass what the company has set out to be, and how they will remain authentic in the marketplace.
Change starts here
Back by popular demand, this marked Gary Magenta’s second appearance at the Retailing Summit. Senior Vice President and Chief Change Architect for Root, Magenta always brings high energy and helpful growth strategies that retailers can apply to their businesses. This year, Magenta’s keynote revolved around change. More specifically, how to change, how to communicate change, and the secrets to making change within an organization stick.
“Change fails 70 percent of the time because it isn’t easy, it’s actually really hard,” Magenta explained. The biggest reason change fails? People. Within the 70 percent of change that fails, 90 percent of the time it is due to front line employees and managers. However, it is not their fault. They have not been given the proper tools to understand what, why, and how to change.
Magenta provided examples of several corporations that have successfully changed to help us define “what” change is; from Apple’s development of its first computer to the Apple Watch, Pepsi’s roots as an elixir business, and Tiffany’s starting as a stationary company. However, Starbucks was his biggest example of change. Starbucks’ beloved Frappuccino started as an idea from a store manager. The idea worked its way up, and continues to be a large portion of Starbucks’ business. According to Magenta, it serves as a great example of how a company should utilize front line employees to drive change. Discussing a case study of Pepsi, he explained how the company foresaw carbonated beverage sales decreasing and created new strategies to ensure the company would continue to grow and be successful. The change Pepsi needed would never have happened if they didn’t explain the “why” behind the change.
Magenta closed with advice on how to create lasting change. “Change is a marathon not a destination,” he emphasized. Companies must equip managers and invest in front-line employees to get people excited to buy into the change. In this way, the change won’t just be managed but taken care of. His last thought, that people don’t resist change but resist being forced to change. This lesson is one companies can learn from as a whole and something each individual can apply to their own lives.
Aggie Entrepreneur Showcase
For the second year in a row, student entrepreneurs from Texas A&M University presented their products before attendees at the Retailing Summit.
Andy Ellwood ’04, President and Co-Founder of Basket, presented in last year’s entrepreneur showcase. This year he returned to moderate the session. A new feature this year included a live poll vote that gave attendees the opportunity to choose a winner after each student presented. The 2018 Aggie Entrepreneur Showcase included:
Ben Omonira ’20 – Chemical Engineering
After conducting more than 100 interviews, Ben Omonira discovered that first responders are actively seeking methods to neutralize criminal threats with non-lethal force. As a result, Ben seeks to provide another mode of threat neutralization through bullet-like projectiles that are designed to minimize bleeding out. The use of Lazarus by police, border security, or federal agents may help preserve life in the aftermath of a gunshot.
Gavin Lynch ’20 – Management
SlapEyewear has designed an innovative pair of sunglasses using the Slap Band technology from 1990s to create shades that slap to your wrists and stay on your head. SlapEyewear provides you with an affordable, polarized, and innovative pair of shades that go where you go so you can focus on the adventure.
Bailey Glenewinkel ’16 – Agricultural Economics, MS Business `17
SKNZ Studios created and markets 3.5-inch silicone sleeves with a raised honeycomb grip. They are reusable and interchangeable, allowing them to be used on many different tumblers, bottles and cups. The silicone allows the sleeves to stretch to fit larger drinkware. They help make drinkware easily identifiable and help the user more easily grip tumblers that are hot, cold, or slippery. SKNZ sleeves are perfect for displaying logos for businesses, organizations, and events, and are a great marketing tool.
Alfredo Costilla Reyes ’19 – Electrical Engineering
Alfredo Costilla Reyes is a graduate student in electrical and computer engineering at Texas A&M University and the founder of BitGrange. A system for urban farming, BitGrange evaluates environmental variables, such as temperature and light, in real time and notifies growers through BitGrange’s app to take necessary actions, such as adding more water or plant food. Through its four-step process of “Plant-Connect-Sync-Play”, BitGrange aims to gamify agriculture for a new generation of farmers, encouraging and engaging youth to participate in food production
The winner was Ben Omonira of Lazarus.
Leveraging financial strength for profitable growth
Michael Dastugue ’86, Executive Vice President and Chief Financial Officer for Walmart U.S. and Mays Business School graduate, sat down with CRS Research Director Venky Shankar and Ted Vaughan, Assurance Office Managing Partner at BDO.
Dastugue described the key action items necessary to achieve profit with a financially strong entity like Walmart. In the discussion, Dastugue explained that Walmart is beginning to change, and continues to stay flexible in order to match the needs of industry.
He left the audience with two key points he attributes to their profitable growth and financial strength. The first was investing in associates by providing a better and more comfortable environment, and equipping them with the tools to excel at their job. He strongly believes happy employees create value that is unparalleled. His second key point was giving value to customers. Dastugue is set on relentlessly providing the best experience for the customer by making sure everything is low priced. Dastugue and his team are relentless when it comes to identifying competitive pricing strategies. Through the idea of serving the customer, Dastugue has incorporated customer-face and associate-face technologies for better communication, productivity, and minimal expenses. In order to leverage financial strength, Dastugue discussed how Walmart is incorporating technology to rival and surpass competitors like Amazon by developing new app features.
More than just ice cream
One of the most impactful sessions came at the end of the first day from Blue Bell President Ricky Dickson. His topic centered around leadership and passion, providing three characteristics of a leader: vision, discipline, and servant leadership. These characteristics are engrained in the culture and reputation of Blue Bell.
The first characteristic Dickson discussed was vision. Leading with vision “essentially means focus on what matters the most, this will lead you to the type of leader that you want to be”, he explained. Being a leader requires having vision for the future and what you want to make of yourself and your team. When talking about the past Dickson said, “Being rooted in your past can pull you back. If you are rooted in the future, you will move forward and deliver the product you are expecting.” He shared the story of a woman who wrote him a letter about her grandfather who had recently passed. He was a huge fan of Blue Bell, and some of her fondest memories were sharing a bowl of ice cream with him. As the years went on, her grandfather developed dementia and his mind began to deteriorate – but when they gave him a bowl of Blue Bell’s homemade vanilla, his eyes would light up. She thanked Blue Bell for giving them some of their grandfather back.
Dickson turned the focus to discipline, and how it relates to change. “If you really wanted to, you would do something about the problem you’re facing,” he explained. Dickson briefly alluded to the listeria outbreak that caused them to shut down production for a time, emphasizing Blue Bell’s desire to make things right, move forward, and stay true to who they are as a company. According to Dickson, leadership is about listening. Being a servant leader is instrumental in his leadership style, and that is reflected through the Blue Bell brand. He explained that Blue Bell is about family, and family is about serving and loving others.
Passion was the final point of Dickson’s keynote, and he delivered one of the most impactful points of the conference. He referenced an article that talked about how people can often get derailed by their passion because it can lead to failure. He refuted this idea by giving the example of Rudy, the walk-on player at Notre Dame who never gave up on his passion to make the football team – despite all of the failures and challenges he met along the way. Dickson closed by saying, “God places a passion in us like Rudy. Passion represents why we do what we do at Blue Bell.”
Where do you find your challenge? The key to productive change and practical innovation
Nigel Travis, Executive Chairman at Dunkin’ Brands, kicked off the second day of the Retailing Summit. Attendees were treated to Dunkin’ donuts for breakfast. Travis been on the forefront of change with Blockbuster, Papa Johns, and Dunkin’ Brands, which is the parent brand to both Dunkin’ and Baskin Robins. He is currently promoting his new book The Challenge Culture: Why the Most Successful Organizations Run on Pushback, in which he writes about changing the status quo and the ability to challenge a company from all angles.
Travis opened his keynote by declaring, “The power of anticipation is the ingredient for the next 10 years.” Organizations need to think about where they want to go first, then work towards that end goal. And one of the important stepping stones in achieving that end goal is curating a “culture that counts.” Travis perfectly explained this through his experience with Dunkin’. Being a franchised company, it is important that Dunkin’ remains a “franchisor of choice.” He stated that not only is it important to stay on top of the numbers and to think about who your successor will be, but that it is passion that “keeps America running on Dunkin’.”
The success of Dunkin’ comes from making this front line happy. Travis explained how he created a culture that starts in stores because it is important to “serve the people who serve the people,” making sure his employees spend at least 90 percent of their time on their people. He added that the average amount of time we spend on others is between 30 to 40 percent.
“If we can double that human interaction time, we can double our bottom line,” Travis concluded.
Using research to build digital experiences
Head of Global Cards Customer Experience Digital and Journey Strategy at Citi, Rebecca Wooters ’93, began her keynote by applauded the transformation technology has on the banking industry, explains how she was able to fly to New York without a wallet.
With the rise of cardless ATMs and mobile wallets, Wooters’ job becomes increasingly critical. “People are connected all of the time,” she says. In fact, the most common place people do banking is in the bathroom.
Customers expect a polished user experience, and in the banking industry, this can equate to reducing stress. Citi’s process of delivering a seamless app experience has four phases: discovery, design, development, and monitor/improve. Wooters focused on the discovery portion of the process, which is explains how to find the target customer, and exploring what he or she wants.
Discovery begins with journey analytics, or the sequence of a events a customer experiences when using a product or service. Although Wooters oversees the customer’s journey through the app, she realizes that a customer’s journey may not start there. For instance, if a Citi customer loses a credit card, they may call the bank first. That customer’s journey started with picking up the phone. This poses challenges for Wooters, as she has no control over the customer-support experience. Journey analytics is also about understanding customer behavior, and what activities successfully initiate customers to stay in the digital space. Wooters also mentioned first touch resolution, or the ability for customers to accomplish their needs on their first attempt.
Wooters’ job is primarily to integrate technology to create a seamless core experience for Citi customers’, and she recognizes that human connection is an integral part of a good customer experience. Wooters works to balance the humanistic qualities of a customer’s journey with Citi, while maintaining the convenience that technology provides.
Plug into the emotional power of loyalty
Don Smith, Senior Managing Director and Chief Analytics Officer at Brierley+Partners, designs customer relationship management systems and implements company loyalty programs.
He mentioned that although consumers are largely satisfied with the loyalty programs that they are currently a part of, this satisfaction does not necessarily make them more loyal to the company. In fact, less than half of consumers enrolled in retail and travel loyalty programs agree that the programs make them feel special. Smith and his company saw this as an opportunity to increase the customer experience through improving loyalty programs. This could prove to be a challenge considering “a sales associate only has an average of seven seconds to convince a customer to enroll in a loyalty program,” according to Smith.
Smith shared his company’s strategy to increase customer loyalty. They start by finding the places where a customer “stubs their toe” or has difficulties with a brand. In order to cultivate emotional loyalty, Brierley+Partners anticipates the customers’ needs, proactively provides post-purchase support, introduces surprise and excitement, curates exclusivity, implements gamification, rewards customers for engagement, and recognizes the customer for their individual enrollment and loyalty. Each of these tactics ties a customer more deeply to a brand or company, thus increasing a stronger loyalty base.
Furthermore, Brierley+Partners helps companies introduce reward choice for customers, optimize their tier structure, encourage customer engagement, propagate soft benefits, and balance their value exchange by forging a symbiotic relationship between vendors and brands.
Inspire more life
Mike Metter is the Senior Vice President of Development at Orangetheory Fitness, which is the fastest growing company to one-thousand global units in franchise history. They have more than $1 billion in revenue and 800,000 members at 986 U.S. locations. The company has never closed a studio since opening in 2010 – which they have achieved through being intensely selective when opening franchises.
Orangetheory is an industry disruptor. Their entire business model is based around a 1-hour, full body workout. The class is set up with half endurance training and half strength and power training. The high-intensity interval training (HIIT) is proven to burn more calories post-workout. Heart rate monitors show real-time results on studio TVs, keeping members in five heart rate zones. Members work to stay in the “orange zone” at 80 percent capacity.
“Orangetheory is a science-backed, technology-tracked, coach-inspired group workout designed to produce results from the inside out, giving people a longer, more vibrant life,” Mettler explained.
He added that Orangetheory is not just another fitness company, it is about “changing lives, one member at a time.” Their current goal is to broaden the reach of the company, making fitness more accessible for everyone. The brand purpose is to give people a longer, more vibrant life. Everyone involved must aspire to “deliver more life” every day, in every aspect of the company. From their corporate office to their trainers, alignment and purpose is vital for the company. Orangetheory is about impact; impact on its members, on the community, and the industry.
Mettler believes that people need to “look through a lens of competing against yourself not others, trying to become the best version of yourself.” Orangetheory values a sense of community, and fostering these relationships encourage customers to keep coming back. They do not want people to just hold a membership and never use it, like many traditional fitness companies do.
Orangetheory partners with Buxton to help learn where to locate studios, making sure they stay on the cutting edge. The company has studios in a variety of types of markets, from rural to urban. Trade areas are defined by drive time, looking where customers are in proximity to the studios, including home, workplace, traffic, and competition. Mettler closed by emphasizing that Orangetheory is a great co-tenant with multiple real estate options, and they’re looking for more future locations to continue expansion.
Celebrating beauty: How Sephora personalizes shopping experiences across all channels
The closing keynote came from Amy Eschilman, Senior Vice President of eCommerce at Sephora. She discussed how the vision of the iconic brand is to be the most loved beauty community by creating experiential retail through Teach, Inspire, and Play, and across Stores, Digital, and Home.
Sephora’s core belief is that “beauty is yours to define and ours to celebrate.” This vision shapes their overarching personalization strategies, community omni innovations, and tactics to personalize shopping experiences. Before creating their strategy, Sephora identified key trends that would affect their overarching strategy and tactics. These trends included: personalized shopping experiences, customizable products, and increased mobile content. The trends steered Sephora toward strategies to increase investment in personal messages based on clients’ behavior and lifecycle, and personalized omnichannel experiences.
To improve their omnichannel experience, Sephora aims to roll out an update to their app which includes the ability for customers to snap a photo of their face and simulate what products would look like. This new technology enables potential consumers to utilize their device, experience the store in a new way, and share their opinions with others. To further involve the consumer, Sephora has engaged in omni innovations such as product tagging and crowdsourcing, a program where community members can weigh in on packaging and formulation. These innovations allow Sephora to provide feedback to brands to better their products as well as to make their consumers feel like Sephora as a company values their input. As the retail industry continues to rapidly change, Sephora is showing a strong ability to adapt with the consumer.
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