On the second day of the NRF, post the amazing Colin Powell talk, there was the NRF Annual Retail Awards. One of the best sessions of the conference – you hear from leading retailers, on exactly what they’re doing. So here’s the list of winners and a bit of a snip-it from their interviews…
1. Retail Innovator of the Year: Walgreens (Boots Alliance).
It’s evident Walgreens has had uplift through it’s merger with UK based Boot’s Alliance. The president of Walgreens, Alex Gourlay, a Scotsman accepted the award. He was quick to espouse that their successful inovation was contingent on 3 elements:
1. Employees being proud of working for Walgreens
2. Ideas coming from across the organisation (have a platform to do this)
3. The ability to scale those ideas – for employees to see them come to life.
Out of these elements they have created a couple of cool innovations:
1. Re-fill by Scan: The ability to scan a prescription bottle’s barcode in order to refill it through Walgreens online;
2. Pill Reminders: $300B is the cost of medication that is recommended but the person doesn’t take. This technology not just helps people remember to take their medication but also understand it.
3. Transfer by Scan: Allows a customer to transfer their prescription from their existing drug store to Walgreens by scanning the prescription’s barcode.
All of this was driven by their purpose – that ‘Everyone’s right to be happy and healthy’.
2. International Retailer of the Year: Eataly
What an amazing concept. Eataly is a story of passion before profits (with profit obviously following).
The awards was accepted by the founders son, Nicola Farrinetti. The dream of Eataly was to make high quality Italian food available around the world – to ‘eat, shop and learn about the Dolce Vita’. The dream came about from Nicola’s father, who use to sell electronic but after visiting a Bazaar in Istanbul believed that his country could do that with food.
They’re focused on working with local farmers – although it’s Italian, with 35 locations around the world they don’t import everything, but use locals for fresh produce.They mix and match products to every market they’re in but making sure they’re true to the Italian culture.
Given the complexity inherent in the business model, it took them 5 years to develop the business. ‘It’s very special because it’s very difficult – we do everything marketing, school, food’ said Farrinetti. And being Italian ‘we’re creative and not the good at logistics’. That said the formula was a success from day 1.
So where is Eataly headed? Their dream is to be in every country in the world – 198 stores. They have a second NYC store due to open in the World Trade Centre site, then Boston, LA, Copenhagen, Paris, Stockholm…then onto India and China.
Such an amazing business and even more than that the passion that sits behind it.
3. Gold Metal Award: Myron E Ullman III – JC Penney
JC. Penney continues to be the cautionary retail tale of what happens when you jump too far from your customer. A video celebrating Myron Ullman, recipient of the NRF’s highest award, was quick to point out ‘many retailers – coming into new companies – try to recreate their last place of work – but that’s not what he (Myron) does’. He’s renown as a CEO who’s always in store, and he was quick to add ‘you couldn’t understand JC Penney if you kept yourself closeted in the comfort of the CEO’s office’.
So, here’s a couple of his words of wisdom on leadership in retail:
1. Long-term purpose: ‘The purpose of business is to improve the community – it’s not a monolithic opportunity where there’s a transaction and you make money – you have to understand the importance in the long-term and of being an important part of the world’.
2. Know your customer: ‘Knowing the customer is number one. The CEO of any of the LVMH brands (his previous role) knew their customer. They knew what they would like and what they wouldn’t like… We’re a value-driven department store – our customers have too little time, too little money – you can’t forget what the customer wants. We do business with the middle two quartiles of Americans’.
3. Listen to the staff: ‘The associate will tell you what the customer wants and what they want out of their business career. The common thing is that they want to be successful – to have something better tomorrow. If it’s going to get worse (the business) they might as well go somewhere else’.
4. It’s not about you: I’t’s about them (the company) – if it’s about you it will split the organisation… The staff are most often the customer. They want to be proud to represent the company. Retail is a team sport (a ‘contact sport’) – if you get you get everyone on board with the same vision there is almost no limit to what you can do’.
So how is JC Penney and Ullman addressing a new future?
Ullman accepts that the store will change. He quoted a study that said, 75% of millennial consider the store the centrepiece of their experience – but went online beforehand. He said ‘So, in the future they may not come in as much as they use to, they might be more knowledgeable before they come in – but I’m not pessimistic about the store. It means you might not need as many locations – you don’t want duplicates in catchments. The problem (for most companies) is that they do not understand the purpose of the store’.
So how are JC Penney adjusting their footprint?
They’re closing 7 stores this year. They’re choosing where to close based on a couple of tenants, ‘in some places the populations have moved, or we didn’t invest enough or the customer has told us that it’s not where they want to shop’. He went on ‘some retailers have over expanded, and we’re guilty of that…It’s not about walking away from the business but about knowing where the customer wants to shop’.
‘Conventional wisdom is to get rid of the small stores – but you are the store in that town! So we don’t use that logic. It’s normally if the town or population has migrated that’s when you have to look at it’ he said.