STORES BIG Show Wrapup 2010 - (Page 1)

BIG Show Wrapup For even more January 10–13, 2010 esigner Tory Burch, barefoot in an airport earlier this month, sent out a tweet asking if anyone else was “grossed out” by having to walk through security sans shoes. “Should I design a line of travel socks?” she asked. The response was fast and furious; according to a later tweet, it proved there was an “epidemic” of grossed-out travelers. But it also proved a point: Today’s luxury shopper expects to connect with brands on a whole new level. Burch, one of three panelists for the Tuesday morning Super Session, “The New Luxury Paradigm,” fully admits that “luxury means something different than it used to.” Instead of being about wealth or price, the group concluded, it’s now about personal choices, individualization and “touching” the brand — not to mention the designer. “People are not buying products,” said Marc Gobé, president, emotional branding. “They’re buying ideas. They’re not buying on the BIG Show go to retail’s BIG Blog http:/ / Redefining Luxury in a Post-recession Economy brands. They’re buying the culture behind these brands.” Gobé, a designer, filmmaker, photographer and author, was joined by Stephen Sadove, chairman and CEO, Saks. The panel was moderated by Dana Telsey, CEO, chief research officer, Telsey Advisory Group, who asked questions throughout rather than handing over the podium for lengthy commentary. They began by discussing how the recent downturn had changed the game: Sadove, for example, spoke of moving from “double-digit growth to a double-digit decline.” That meant a culture shift had to take place, he said, with the understanding that things will continue to improve, but not necessarily return to the way they once were. “There are four pillars to the way we do business,” he said. “Products, selling environment, cost structure and marketing. Every one of them has been redefined. In terms of products, people want value. emotional branding’s Marc Gobé Tory Burch That doesn’t necessarily mean price. They want to feel like whatever they’re buying, it’s worth it. So what we’re focused on is bringing that value with exclusivity differentiation. People want to go into Saks and get something that they can’t find anywhere else.” That doesn’t mean simply private See “Luxury” on page 2 Leadership, Loyalty, Transparency Tackling Tough Times he Super Session that closed NRF’s 99th Annual Convention & EXPO was a panel discussion that featured HSN CEO Mindy Grossman and Dunkin’ Brands executive chairman Jon Luther addressing the topic of “How Leadership Trumps Hardship.” Both companies have had occasion to require clear-headed leadership in recent years. Grossman came to the former Home Shopping Network in 2006 and led it through what she describes as a transformation, culminating in an initial public offering — in August 2008, just before the financial markets collapsed. “We came out at 12 [dollars per share],” Grossman said, “and for reasons having nothing whatsoever to do with the company itself, by December we were trading at $1.43. standing-room-only crowd thronged the Special Events Hall Tuesday morning to hear a presentation by Sir Terry Leahy, chief executive of Tesco. Leahy began his comments by noting that we are finally beginning to come out of the worst recession since the Great Depression. “As we emerge from the recession,” he said, “we all want to know what’s next. I don’t know the answer to that any more than you do. I want to go back to the last recession, in the early 1990s, and look at some management lessons we learned in coming out of that one.” Tesco’s credentials for discussing this topic are considerable. In 1992, there were two dominant retailers in the U.K., Marks & Spencer (clothing) and Sainsbury’s (food); each of them was then the world’s most profitable retailer in its category, and each had T Tesco’s Sir Terry Leahy market capitalization of around £5 billion. At the time, Tesco was struggling to establish its identity, was significantly less profitable and had a market cap of around £2.5 billion. Nearly two decades later, Marks & Spencer and Sainsbury’s are still about the same size while Tesco is now the world’s third-largest retailer, with a market cap of approximately £35 billion. Leahy presented some of the principles Tesco followed See “Leadership” on page 2 Our market cap was less than our receivables balance.” About the only responses to a situation like that are not to panic, stick to business and keep moving forward as best you can. This is exactly what Grossman and her team did. “We focused on three things,” she said. “One was culture; we kept the employee base as whole as we could. The second was customers. We’re a direct-to-consumer business, and we have to act like one at all times. The third was improvements and execution. You need to do things well, and you need to explain, all the time, what you’re doing and why. Our employees were fearful, and it was essential that they understand our reasoning and our decisions. They may not always See “Tough Times” on page 15

Table of Contents for the Digital Edition of STORES BIG Show Wrapup 2010

Stores BIG Show 2010 - Post Conference
Redefining Luxury in a Post-recession Economy
Leadership, Loyalty, Transparency
To Recast Retail, Focus on Customers, Adaptability
Retail CIOs Talk Innovation, Differentiation
Online Retailing “Better Suited” to Times of Stress
Sustainability, from Small Scale to Large
Keeping Them Happy: Studying Shopper ROI
The Reinvention of Category Management
Tackling Tough Times

STORES BIG Show Wrapup 2010