Retail NaviGator

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!

August: Issue 3, 2013

In this issue:

2013 Retailing Smarter Conference

The Retailing Smarter 2013 Conference at the Peabody Orlando gathered the country’s largest retailers to share their expertise in all sectors of the industry. Retail partners covered topics from international retailing to talent acquisition with merchants.

In addition to the main conference speakers, eight breakout sessions were offered. Speakers for the breakout sessions included J. David Scheiner, the Former President and Chief Operating Officer of Macy’s Florida/ Puerto Rico, who talked about international expansion. Lary Sinewitz, the Executive Vice President of BrandsMart, discussed governmental affairs and their effect on retailers. Michael Patrick, the Founder and President of MOHR Retail, and Mary Beth Garcia, the Client Solutions Consultant of MOHR Retail, revealed the challenges involved with interdepartmental and interpersonal relationships. Brian Reaves, the Senior Vice President of Store Sales and Operations for Destination XL Retail Group, discussed how talent acquisition is vital to the success of a retailer. Nataliya Dragoman, the College Recruiter for Hess Corporation, and Brooks Renoll, the University Relations Recruiter for DICK’S Sporting Goods, talked about working with and hiring millenials. Jim Lewis, the CEO of Enhanced Retail Solutions, shared how retailing is moving toward omni-channel consumption, and how retailers need to adapt strategies to remain relevant. UF’s own Ginny Lawrimore, Social Media Manager of the Warrington College of Business Administration, shared updates on which retailers are successfully utilizing social media and how some are making mistakes. Finally, Steven Kirn, the Executive Director of the David F. Miller Center for Retailing Education and Research, covered the Great Recession and its impact on shopping habits, wealth distribution and business strategies.

What follows are brief summaries of the ballroom presentations provided by visiting University of Florida retail interns.

Retail Resilience: How to Stay Relevant as a Leader

By Diana Weng

Michelle Steitz, Vice President of Transformation Initiatives Talent Development at jcp, started in sales at JCPenney while still in school. She has 23 years of experience with JCPenney in several different roles. Her floor experience provided her with better decision-making skills for corporate decisions and as a buyer.

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She indicated three areas that have helped her succeed with "retail resilience:" Change, culture and leadership. Change is inevitable, and her adaptability has helped her succeed at jcp. At jcp, the culture is "people matter," which helps in a customer service perspective. Leadership at jcp is an opportunity, and one does not need to be at the management level to be a leader. For a company retailer to stay relevant, management leadership needs to know that the company needs the customer more than vice versa. Also, management leadership must differentiate between knowing how to lead and knowing how to manage; inspiration is important in leadership. Steitz emphasized "know yourself, get to know the business, and learn by contributing." When asked about staying competitive, Steitz mentioned that when one retailer makes a decision, others can easily get "sucked in" to similar behaviors and ideas. The challenge in retail is not only about keeping up, but staying ahead of the curve.

Musings of an International Retailer

By Kaleb Browning

David Berg, CEO of Z Wireless, grew up in Stillwater, Minnesota. He got his first job at the local butcher shop, and learned a few things in that job that have stuck with him for his entire career. For one, as a retailer, he learned to care deeply about the customer and the quality of the product. It is crucial to understand that customers have choices. They don’t have to choose you, so retailers need to stand up and earn the customer’s business. He also learned to treat the customer with respect. NEVER say no. And lastly, he learned that managers and associates should feel like they are a part of a team.

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CEO of Z Wireless - one of the largest Verizon Premium Retail Partners with over 250 stores in the US

  • Has over 3 million miles flying – has conducted business in over 50 countries including launching 3 retail brands in China (Best Buy, GNC and Outback Steakhouse
  • Was formerly with President of Bloomin Brands International, COO of GNC and and COO-International for Best Buy
  • David Berg, CEO of Z Wireless, grew up in Stillwater, Minnesota. He got his first job at the local butcher shop, and learned a few things in that job that have stuck with him for his entire career. For one, as a retailer, he learned to care deeply about the customer and the quality of the product. It is crucial to understand that customers have choices. They don’t have to choose you, so retailers need to stand up and earn the customer’s business. He also learned to treat the customer with respect. NEVER say no. And lastly, he learned that managers and associates should feel like they are a part of a team. At the butcher shop, the manager always had a beer with his associates every Saturday night to thank everyone for the hard work they put in for the week.

The lessons Berg learned in Minnesota helped him years later when he was developing the international expansion strategy for Best Buy. At the time, Best Buy had a decision to make: Should it build, buy or ally as it expanded outside North America? Eventually, the company decided to form a joint venture with 5 Star, a company that had over 180 stores in China. By choosing this option, Best Buy had the insights of an established company in the local market. There were some factors he attributed to the success of this venture.

  • They formed a family-feel culture that helped the company resolve problems quickly and easily. am fortunate that today I am able to achieve a good work-life balance. I’ve surrounded myself with great people that care a lot about what they do and it’s their professional purpose to make sure that I don’t worry too much about things that they are responsible for.
  • Spending the time to understand and develop relationships with the Chinese counterparts helped the growth of the investment especially when they accelerated the buyout of 5 Star a few years later.

Berg offered an acronym (C.L.I.E.N.T) to remember how the customer is the client of the business:

  • Choice= Not only do customers have choices, but employees do, too. Leaders should enable engagement for their associates focused on customers.
  • Listen= Not only should we focus on how we listen, but how we respond. As a leader, what you say is heard and it matters immensely to the team.
  • Interest= Showing interest is key. Berg had a program where store managers served as mentors to corporate executives. Everyone in a retail company needs to keep the customer at the forefront of their decision making.
  • Ethics= Ethics HAVE to be unwavering. They need to be very black and white. Sometimes you have to send this message bluntly and publicly.
  • No= Do not have “no” in your dictionary unless it is a response to something unethical. Positivity is huge!
  • Teamwork= We all have cheers and chores when it comes to work. We need to maximize the cheers and optimize the chores. Celebrate wins as a team.

Experience Per Sq. Ft.

By Dat Tran

Rachel Shechtman’s STORY is a retail store that not only sells products, but emotions. STORY is meant to be an experience.The only constant is the store location and the name.

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Every four to eight weeks, STORY undergoes a remodeling changing its merchandise and design to fit a new theme. Each story starts off with an idea and a story board is created around it. Sponsors are gathered based on that idea. An art team then sets out to bring the idea to life using materials from the sponsors. Those sponsors’ products are presented in the store as well as products from other large companies or young start-ups, as long as it fits the theme.

Once each story runs its course, the store closes down and construction begins on a new chapter. Shechtman likens her store to a magazine that changes themes every month. At the end of each story, she uses statistical technologies to track in-store as well as online visits. Interestingly, in-store traffic is tracked using thermo cameras. This lets her see which area of her store is most frequented during the story. Shechtman’s innovative retail perspective has given her a unique position in this new retail age.

What is Really Going On Here?

By Dana Sandoval

David Vanderpoel opened his speech by revisiting last year’s discourse where he spoke about social media and retailing through mobile devices. This year, he emphasized the importance of creating a seamless shopping experience. Retailers are no longer bound to a brick and mortar store; they now have multiple channels to reach consumers. Stores are often used as a showroom, where customers can feel, touch and test products, yet the purchases may be made from an online retailer that does not charge taxes or otherwise offers a lower price. Consumers have a demand for social proof, and use websites like Yelp to read what others have to say, and they also refer to their “Hierarchy of Trust”, relying on friends, family and even strangers for information about purchase decisions.

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Vanderpoel said we are in a period of dynamic and continuous demographic shifts, and retailers must be able to decipher who new consumer segments are and then adjust to their behaviors. Vanderpoel discussed different consumer patterns that have been identified, concluding that “Science is not a substitute for art. Technology is not a substitute for process.” His closing statements stressed it is essential to get retailers engaged in both quantitative and qualitative research in order to better understand customer psychology in this rapidly-changing marketplace.

Florida Blue’s Journey to Consumerism

By Sylva Kabuanseya

Craig Thomas is Senior Vice President of Government and Consumer Markets at Florida Blue, Florida’s Blue Cross Blue Shield plan, where he leads the Individual Under 65/Exchange, Medicaid and Medicare markets. His responsibilities included preparing the company to enter the Under 65/Exchange market, the Medicaid market and repositioning the company for greater success in the Medicare market. He is also responsible for the company’s operational performance in those segments as well as continuing to advance marketing and retail progress.

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Thomas presented Florida Blue’s Journey to Consumerism. He began his presentation with strategic context by providing details on the transformation drivers of affordability and health care reform that led Florida Blue on its consumerism journey. Due to a changing market environment (decline in employer markets and growth in individual market) there is greater need for affordable products (high out-of pocket plans) that requires more members’ health accountability. With the new Affordable Care Act, Thomas quantified that there is a lot that is going to change and fluctuate during the initiation of the Act. He believes that many new competitors will enter the market. Furthermore, he stated that there will be market disruption as many employers will not sponsor healthcare insurance plans resulting in their employees searching elsewhere for personal plans. To attract these new individuals, there will be extensive market communication from the government and the health plans.

Thomas said that Florida Blue is well-positioned for the new market environment. He highlighted some of the capabilities and services Florida Blue has developed over the years to meet the changing consumer needs including repositioning their brand to establishing Florida Blue Retail Centers across the state, developing member tools, the online Health Shop and continued innovation and new partnerships like Disney.

Thomas has a lot of hope and trust in Florida Blue’s future in the evolving consumer market.

35 Years on the Tips of My Toes

By Kennis Dees

Sam Edelman, a fashion world icon and the Nordstrom Partner of Excellence award winner for 2012, presented at the Annual Retailing Smarter Conference.

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Edelman began with equestrian fashion, which he thought was the next big thing. He started a small company called “Horseshoes” with his father, which caught the interest of Ralph Lauren. He began to build shoes for the Ralph Lauren Line. Later, he joined Kenneth Cole who had created the “candy slide” shoe considered the only shoe to wear with designer jeans in the 1970s. With very little money, he and Cole formed what would become Kenneth Cole Productions, Inc.

Edelman was asked to help Esprit enter the shoe business, and it became the No. 1 shoe business in the world. The experience led him to develop a partnership with his wife and started the “Sam & Libby” brand. Together, they introduced the ballet flat—complete with a bow. They sold 70 million pairs. The company was taken public at a value of $145 million. The stock jumped from $12 per share to $27.50 in two weeks.

Later, Edelman moved to Florida to focus on fashion and the design process. He wanted to develop “a company that was for the girl that really loves fashion.” He founded the Sam Edelman Company which became No. 1 in contemporary foot wear.

The CEO with Brown Shoe Company became the first investor into Sam Edelman Inc, and this year they launched their first campaign with model Kate Upton to showcase the shoes. He has also partnered with Target and brought back the Sam & Libby brand.

His advice to those just starting out is to have self-confidence, self-esteem and a good mentor. With those three things, you are set up for success

Online and Ecommerce Trends 3.0

By Stephanie Arnold

Neil Doshi, Lead Internet Analyst at CRT Capital, presented an overview of the latest trends in E-commerce. According to Doshi, E-commerce (eCom) is 10-11% of retail and is growing rapidly. He stated that four out of 10 people still perceive the economy as being poor, and that 63% of those people plan to do something about it. (i.e. spend less, use more coupons, etc.).

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Doshi drove home the fact that Amazon is the E-commerce “winner” and talked about some of the strategies they used to become successful such as low-cost leadership, operational excellence and process innovation, using different categories (i.e. Zappos, Fresh Diapers) and Prime.

He classified eCom 2.0 as the “mobile” eCom. He stated that eBay is embracing mCom. He also said that SMS messages to consumers are especially effective. Ninety-seven percent of SMS messages to consumers are opened within five seconds, and the click-thru rate is much higher than the e-mail click-thru rate. He stated that social commerce has not had much success and is better used to target specific markets. He also stated that the thrill of daily deals, such as Groupon, is gone.

Doshi finished by reviewing “what’s next.” He stated that flash sales are still growing, subscription commerce is growing (i.e. Beachmint, Julep, Birchbox), vertically integrated brands are growing (i.e. Warvy Parker, Bonobos), and same-day delivery is growing (although, currently doesn’t reach 90% of the population). Also, sales tax on eCom could occur soon and traditional retailers are starting to “price-match” with Amazon.

Retail Navigator

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!


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