The Retail NaviGator - our communication to you about our research on retailing issues and the activities of the David F. Miller Center. This ongoing media change creates a direct connection to the retailing community in a way that keeps information current, direct and GREEN!
In this issue:
- 21st Annual "Retail Smarter" Conference
- Retail Outlook: It really is "all about the economy!"
- After the Turnaround: Innovating for Growth at Foot Locker
- Inspiration from Food: From Chinese Take-Out to Origami Audio
- Going Gaga Over Retail Brand-Building
- Economic Value of a Brand: Signs and Sales
- It All Started With a Juice Stand: the Lilly Pulitzer Story
- Beyond Home Shopping: "Boundary-less Retail"
21st Annual "Retail Smarter" Conference
Over 200 people participated in the 21st Annual "Retail Smarter" Conference in Orlando, June 21 and 22, 2012. With the theme "Get Social", attendees presenters from a wide range of backgrounds, with topics ranging from the impact of the internet and social media on branding -- from the Lady Gaga saga to the HSN shopping empire. Other speakers and interactive breakout sessions considered ways to create compelling in-store customer experiences that are hard to replicate on-line, the power of effective product placement, values and beliefs in HR management, the impact of the broader economic environment, and the engaging story of Lilly Pulitzer, her apparel designs, -- and her Juice-stand beginnings!
The event was held at the Caribe Royale Resort in Orlando, and included industry, academic and student attendees. Each June, the program features top speakers and engaging breakout sessions, combining up-to-date information about current retail developments and numerous opportunities for dialogue and participation. Summaries of the general session speaker presentations, prepared by student participants, are shown below.
As in past years, the program included presentations focusing on in-depth descriptions of corporate strategies, such as that of Ken Hicks, CEO of Foot Locker, who has led a very successful and innovative turnaround effort to position Foot Locker as a leading retailer of athletic footwear and apparel. (Ed. Note: Since the conference, Hicks was featured in a major article in the August 1 issue of Forbes magazine. Read it here: http://www.forbes.com/sites/hannahelliott/2012/08/01/running-man-foot-locker-chief-leading-a-rare-retail-turnaround/
The program kicked off with a presentation by Chris Oakley of the Atlanta Federal Reserve Bank, setting the economic context for current retail performance, challenges and prospects. Jason Lukash of OrigAudio shared an exciting story of innovation and creativity – and the hurdles faced in new product development, including raising venture capital funds, with no prior experience.
Ron Culp, director of the Graduate Program for Public Relations and Advertising (PRAD) at DePaul University offered in-depth information about the spread and impact of social media, including a "revealing" look at how Lady Gaga has built her personal "brand".
On Friday, Rich Gottwald of the American Sign Association, demonstrated the substantial and measurable impact of retail signage on brand identity and retail performance. His presentation was followed by a very personal and engaging story by Janie Schoenborn, design Director of Lilly Pulitzer, about how a unique brand grew from simple beginnings to legendary status. Finally, Mindy Grossman, CEO of HSN, Inc. closed the program with a compelling accounting of her leadership of HSN into an innovative, multi-channel retail powerhouse.
The concurrent sessions gave participants chances for focused attention to a range of topics, in smaller, interactive sessions:
- Jim Lewis, CEO of Enhanced Retail Solutions LLC, demonstrated ways to use data and technology to improve productivity
- David Vanderpoel, Principal with North Highland considered how "big data" and other sources can help restore marketing effectiveness
- A true hands-on demonstration of how selecting the "right" product – and consumer-friendly shelf placement – can drive success was presented by Chip Lane of Sealane Marketing
- "Love" – and specifically values and beliefs – were the focus of Terry Kabachnick's session on ways to get smarter about the human side of business
- Steven Metivier of Wells Fargo Retail Finance led a session on the importance of customer service in client retention
- "Don't un-friend the store" was the focus of John Wilkins, VP Strategic Client Development at Miller Zell, using many example to show how retailers can create compelling, in-store experiences
- John Mullen, VP North American Operations for Office Depot also dealt with the them of how to create a transformation of the in-store customer experience
- And finally, Tawnya Means, from the Warrington School at UF, led a session on the use of social media to enhance retail business and marketing
It was a great program! Mark your calendar now for next year's conference at the elegant and newly-remodeled Peabody Hotel in Orlando, June 20-21, 2013
Retail Outlook: It really is "all about the economy!"
By Lindsey Sanders
Mr. Oakley is the Vice President and Regional Executive of the Jacksonville Branch of the Federal Reserve Bank of Atlanta. He spoke at the retailing conference about the connections between the Bank's research studies and the effects of the economy on the retail industry. Mr. Oakley noted that the economy has been slowly picking up since the last recession and that we have seen an increase in consumer confidence with a recent plateau. Consumers seem to be wary about what may happen with the economy/jobs, international events, tax policies, and the "fiscal cliff". Sales in the retail industry have improved over the recent months but are expected to slow in the next few months primarily due to incomes not keeping up with spending. Even though unemployment figures as a whole have gone down, unemployment in retail/wholesale remains elevated. Feedback indicates that retail industries are increasing the hiring of temps, part time, and contract workers instead of full time positions due to the uncertainty of the economy. Real durable goods, such as those produced by the automobile industry, have actually seen an uptick and are predicted to keep performing at a positive rate. The markets for clothing, gas, building, and electronics are not as lucky and have seen a recent decline. Mr. Oakley mentioned that declining prices of commodity goods may help support consumer confidence and provide resources for other spending. Mr. Oakley presented many different studies and explained how the Federal Reserve conducts these studies as often as possible in order to provide retailers and other constituents with a regional and nationwide view of various economic conditions through the REIN (Regional Economic Information Network) system. The REIN system allows the Federal Reserve to have a "Main Street Connection" to economic forecasting. He concluded with a question and answer session and encouraged participants to remain informed about factors influencing the economy and their businesses.
After the Turnaround: Innovating for Growth at Foot Locker
By Kathy Keeter
Ken C. Hicks, the chairman and CEO of Foot Locker, Inc., walked on to the stage at this year's Retail Smarter Conference with a smile on his face and a pair of tennis shoes on his feet. Hicks spoke regarding his experience as a fresh-to-the-company CEO of a major retailing chain during the recent economic downturn. His presentation, entitled "After the Turnaround: Innovating for Growth," began with a brief overview of the company he represents.
Foot Locker, Inc. encompasses not only Foot Locker and Lady/Kids Foot Locker stores, but also Champs Sports, Footaction, Eastbay, and CCS shoe companies. The aggregate of these various companies results in $5.6 billion in sales each year across 23 countries; the corporation purports to sell over 220 pairs of shoes every minute. The company is currently celebrating its 100th anniversary on the New York Stock Exchange (NYSE), though it began its history with the NYSE as the five-and-dime store chain, Woolworths.
Upon joining the company, Hicks immediately developed a strategy to keep his business above water despite a flat economy. That strategy began with a vision: To be the leading global retailer of athletically-inspired shoes and apparel. With his vision in mind, Hicks implemented six strategies – including increasing productivity and redesigning stores – which were designed to result in specific goals, such as improving overall sales. Hicks discussed several key actions taken during this process, ranging from a total website redesign to simply "putting the purple shirt with the purple shoes" in stores. Hicks concluded by demonstrating how his swift and drastic actions accounted for the retail chain's positive results, evidenced by Foot Locker, Inc.'s improved sales and stock price. In fact, he and his team recently set new goals for the business, as they had already exceeded all of their original expectations.
Hicks ended his speech with a look at the future of retailing, suggesting that innovations in product, customer engagement, store design, conceptual advertising, and technology would be the best ways to innovate for growth in the retail sector in the years to come.
Inspiration from Food: From Chinese Take-Out to Origami Audio
By Jason Olivieri
Have you ever been inspired to invent something, but never pursued the venture, because you thought it seemed silly or virtually impossible? I remember being in elementary school, watching television and thinking it would have been cool to pause, rewind, and record live T.V. I envisioned recording my favorite cartoons and watching them when I finished my homework or when I got home from football practice. I often thought about the idea, but assumed it was a ridiculous and figured it could never happen. Over ten years later, in 1999, ReplayTV and TIVO launched the consumer digital video recorder (DVR) at the Consumer Electronics Show in Las Vegas, Nevada. Today, millions of people have some type of DVR in their home and I can only imagine what might have been.
Entrepreneurial ideas are derived every day, but it takes a special type of individual who's willing to take the necessary risks to get their idea to market. A great example of this is OrigAudio, a company founded in 2009 by Jason Lucash and Mike Syzmcak. Early in their careers, Jason and Mike had jobs that entailed a lot of traveling. They were both music enthusiasts and wished they possessed a portable device that would enable them to listen to music while on the go. One day, while eating Chinese food, they found their inspiration from a take-out-box. It was the perfect concept. The box was foldable, easily compactable, and recyclable. It was at that moment that the "origami of audio" was born.
A major concern that OrigAudio faced was launching a startup in a terrible economy. This did not deter Jason and Mike, so they took their idea to China to have their speakers produced. Their first product was called the "Fold n' Play" and were foldable speakers made from recycled materials and required zero external power. Jason and Mike took all their savings and had 6,000 speakers made. They didn't quit their jobs and relied on the site Freelancer.com to find someone to generate a website for a reasonable cost, allowing them to distribute their product. Approximately, three months after launching OrigAudio, Time Magazine recognized their speakers as one of the "50 Best Inventions of 2009." Luckily, that led to appearances on the Today Show and ABC's hit start-up business show "Shark Tank." The rest is history.
Today, OrigAudio has established numerous partnerships and can be found in over 4,000 stores in 38 countries. The company is based out of Costa Mesa, California and valued at $4 million. They released a second product called the "Rock-It," which utilizes vibration sequences to turn any object into a speaker. The product has been a huge hit and was recognized by the New York Post as a top gadget to look for in 2010. Most recently, the company has listened to their customers and designed the "Doodle," which allows customers to design the graphics on their own speakers. OrigAudio is a prime example of what anyone can accomplish in business. A valuable lesson to be learned is that inspiration is everywhere, you just need to capture it!
Going Gaga Over Retail Brand-Building
By Patricia Botero
Ron Culp started his entrepreneur spirit at the age of 11 by promoting his own greeting cards through his own neighborhood newspaper and radio station. He continued this spirit when he later bought the Zionsville (Ind.) Times Sentinel. By 1976 he opened "The Daily Grind", his own high-end coffee shop—all while hold down full-time jobs. After working in senior-level PR jobs at four Fortune 500 corporations, Mr. Culp now serves as a Public Relations Consultant and Professional Director of the Graduate PR and Advertising Program at De Paul University in. Through his entire presentation he enforced how important is social media in order to maintain a successful business. According to Mr. Culp, 90 times per week the average person mentions a brand by name to his friends, family members or social media. Engagement leads to results and followers are brand advocates he stated. The best way to maintain your followers and friends engaged you need to follow three basic steps. First, you should build momentum with elements of surprise along the way. Secondly, you should integrate all marketing channels in order to promote a single brand. He strongly recommended that we should treat all channels as an individual channel in order to keep that customer engaged. For example, have the same brand personality in all channels but don't post the same thing on Twitter, Facebook, LinkedIn. And lastly, use fans as a marketing asset, engage them and use them as a form of advertising. One of his major examples was Lady Gaga; he stated that retailers and business should take her as a social media role model because she is touchable, she stands for her beliefs, she creates a community and she is authentic. Furthermore he made it very clear that we only have 10-15 seconds to catch attention in our posts that is why titles are everything. In conclusion, in order to improve results and engage your target audience you should constantly maintain two-way communication, designate a team for social media, and build an authentic brand personality.
Economic Value of a Brand: Signs and Sales
By Jonathan Mayen
As the Executive Vice President of the International Sign Association (ISA), Rich Gottwald is responsible for overseeing regulatory, legislative, and technology challenges and leading affiliated businesses to embark on new opportunities with on-premise signage. Rich is also responsible for promoting and growing the International Sign Academy which educates, trains and partners with retail users of signs. Rich presented on the importance of signs and policies to retailers in the industry. The economic value of signs is simple: research shows that an effective sign increases a company's business; that business results in taxable revenue for the local government which in turn allows the local government to fund schools, police and fire departments, etc.
The economic value of signs is also the extension of a brand that any company is trying to promote. The University of Cincinnati conducted a survey that demonstrated that 34% of shoppers associate sign quality with store and product quality. Rich explained that a sign must be as equally as important as product quality since it promotes your brand, creates an emotional link to shoppers and adds value to a product. The emotional link creates an association with a brand and in effect shoppers become less price sensitive to products in the market. Three marketing functions of signage consist of the ABC theory:
- A –Attract attention
- B – Brand site
- C – Create an impulse
The positive effect to this is that increases in awareness contribute to brand identity and leads to increases in business. Rich discussed several case studies conducted by the ISA that involved the cost effect of the usage of trans media such as print, radio, TV, and signage and how they affected business. One case study involved a hotel company that was researching the effects of placing prices on their signage. They had a 19% increase in occupancy and $30,000 in tax revenue by placing prices on their signs.
The following are some key findings by the ISA:
- Signs do work
- The larger the size of the sign, the larger the increase per transaction
- Retailers found that effective signage reinforces brand
Rich Gottwald concluded that signs not only help businesses, but also the community. Signs should engage and enrich the community in a positive and supportive way. Also, motion full animation has a significant impact on viewership and it was found that they do not distract drivers on the road. Despite social media, signs are still the number one way of advertising. Rich Gottwald holds a Bachelor of Science in Engineering from the University of Massachusetts at Lowell and is a certified Association Executive. Rich has hold senior management positions in several trade associations before he joined ISA.
It All Started With a Juice Stand: the Lilly Pulitzer Story
By Rachel Morse
Conference goers, CEO's, advisors and students alike waited eagerly for Janie Schoenborn to take the stage. Many young students were in awe of the name Lilly Pulitzer and were anxious to see who was speaking on behalf of this retail giant. Janie Schoenborn was second to last to speak at the Retailing Smarter 2012 Conference in Orlando, FL on June 22nd. Her enthusiasm captivated the crowd as she shared the personal life story of designer Lilly Pulitzer as well as her own. She spoke of the beginnings of the brand, which included the phrase "It all started with a juice stand". The story of Lilly Pulitzer stems from humble beginnings in Palm Beach, FL as a juice stand. The company would then grow in something much more. Lilly Pulitzer's vision was simple, she wanted a simple shift dress that hid her belly and also blended her juice stains. Lilly Pulitzer is a special culture that children, young women and grandmothers can share with each other. Lilly Pulitzer will always remain timeless and appropriate for any age. Janie Schoenborn shared her beginnings as a Lilly lover and showed a picture of her at a young age wearing Lilly. She explained to the audience that she didn't go to school for design, this was a good reinforcement for the students in the audience, that all a successful career takes is passion. Janie Schoenborn has a passion for Lilly Pulitzer and it radiates from every inch of her body. After she was done telling the most intimate details of the brand, it was safe to say everyone in the audience was ready to fill out applications for Lilly Pulitzer. Janie had many questions at the end of her presentation such as students inquiring about the new "sorority print" from the company (which was a huge boost to the company this past fall), to CEO's asking what were the company's plans on expansion. Young students as well as adults lined up at the end of the presentation just to grab a minute of Janie's time. Janie Schoenborn was the perfect presentation to wrap up the end of a fabulous two-day conference; she made everyone feel proactive about his or her own retailing work.
Beyond Home Shopping: "Boundary-less Retail"
By Jonathan Mayen
Mindy Grossman finds change exhilarating and the application of three opportunities: reinvention, imagination and reenergizing. The way that HSN, Inc. manages change is by creating a differentiation experience to all their viewers and leveraging the community and commerce. HSN, Inc. is all about "boundary-less retail". It is the ability to be flexible, adaptive, and responsive to change that makes the difference. The exchange of information and ideas, the collaboration and strategic alliances, and the leverage of technology and innovation create a unique experience. HSN, Inc. inspires consumers to have a unique experience with their diversification of brands, products and channels of distribution. HSN, Inc. possesses a portfolio of lifestyle brands and a curated assortment of exclusive products and top brand names that support this endeavor.
Mindy Grossman started with the company six years ago. She had no television experience. Prior to HSN, Inc. Ms. Grossman served as Global Vice President for Nike, Inc. and led Nike's 4 billion dollar apparel business from 2000 to 2006. Also, Ms. Grossman served as the President and CEO of Polo Jeans Company from 1995 to 2000 and Vice President of New Business Development at Polo Ralph Lauren Corporation from 1994 to 1995. As Ms. Grossman joined HSN, Inc. she worked to create an emotional experience for the customer and saw an opportunity to bring brands to life. At the time, it was not about making connections. Instead it was about much HSN can sell in a short period of time. Ms. Grossman created engagement to its customers by transforming HSN into a lifestyle network, diversifying its portfolio of brands and personalities, and directing efforts to evolve the linear network into a multiplatform business.
Ms. Grossman discusses on how HSN digital network offers a unique differentiated experience, which includes social interaction, engagement, excitement, enthusiasm and technology. HSN, Inc. focuses on being consumer centric and embodies a culture of collaboration and energy. Ms. Grossman explains that her main focus at work every day is to make sure HSN has the right talent and possesses a culture of energy and transparency. Each day, Mindy Grossman asks her team, "Have we invested enough value to bring value to our stakeholders?" Today, Mindy Grossman is considered to be one of the most powerful and innovative businesswomen in the world.
This electronic newsletter from The David F. Miller Center for Retailing Education and Research is issued throughout the year to provide updates on what is happening in retailing at the University of Florida. Information regarding student outreach, jobs, internships, research and retailing connections throughout the country will be included. We hope you enjoy seeing what Gators are doing in the retail industry!