Retail represents a big chunk of the US economy. It contributes $2.5 trillion to the nation's annual gross domestic product, according to the National Retail Federation. So it's no surprise that there's so much interest in the quickly evolving, multichannel retail climate, as evidenced by events like the First Annual Symposium on Omni Retailing.
Held last week at the Fashion Institute of Technology in New York City, the symposium examined how fashion retailers are creating seamless customer experiences across channels. Organizers described it as "a forum and think tank" for retail business leaders to discuss best practices for future implementation of omnichannel retailing strategies.
Peter Nordstrom, executive vice president and president of merchandising at Nordstrom, presented a compelling keynote that addressed cross-channel convergence from his company’s perspective. Additional Speakers included Jean-Marc Bellaiche, senior partner and managing director at The Boston Consulting Group; David Cox, a global business manager for Microsoft's relationship with Bank of America, and Katia Beauchamp, one of the three co-founders and co-CEO of online retailer Birchbox.
"We help consumers discover products they didn't even know they wanted," Beauchamp said.
Nordstrom was an anomaly: he rarely speaks at conferences and his upscale chain of department stores, until recently, depended largely on word-of-mouth advertising. He talked about a four-box ecosystem: in store and online, full and off-price — and noted that the first Nordstrom store in Manhattan, coming in 2018, will be housed on the first seven floors of the second-tallest building in the city.
I asked him about the Nordstrom Innovation Lab, "a team of techies, designers, entrepreneurs, statisticians, researchers, and artists, all trying to discover the future of retail."
Since it was founded in Seattle in 1901, Nordstrom has pledged to "offer the customer the best possible service, selection, quality and value." The Innovation Lab attempts to move customer experience into the digital age by capitalizing on new technology, operations, products, business models and store management.
He noted that members of the lab are free to examine new ways to improve retail, with full access to all of Nordstrom’s data, which can be loaded to create simulations for new ideas and approaches to retail. The goal, he suggested, is to deliver data-driven products to inform business decisions internally and to enhance customer experience externally.
Bellaiche stressed that omnichannel retailing is a game-changer. He said Amazon’s aggressive online retailing has forced other retailers to reexamine their business models and become more inventive, ultimately to the benefit of the customer.
While he remained neutral on which retail business models would ultimately succeed or fail in coming years, he noted that the benefits of e-commerce extend far beyond the boundaries of the Internet. Companies like Amazon are forcing traditional offline retailers like Nordstrom to reinvent themselves — a challenge many are meeting successfully.
Beauchamp told attendees her online beauty retail company has achieve phenomenal growth in less than four years since it was founded. Birchbox partners with brands to help customers discover new products, a win-win for everyone involved.
Now the online retailer is gaining a physical presence, with plans to open a brick-and-mortar retail store in the next year or so. The news confirms the message that the most successful retailers are taking steps to meet their customers wherever they are, on- and off-line.
Microsoft's Cox put it all in perspective when he noted that technology is actually forcing retailers to reformulate their business models and redefine the ways they engage with customers. It's an obvious but important message that begs retailers to answer the question: What are you doing to connect with users on multiple channels and touch points simultaneously or even interchangeably?