CONFERENCE REPORT
implications for retailing around the world. In 2017 in the US, people were talking about the retail apocalypse, because so many stores closed – more stores closed in 2017 than ever before – and this was on top of a bad year in 2016. 2018 was a little bit better but 2019 there were tons more physical stores closing and [global financial firm] UBS predicted that 75,000 stores would close across North America from now until 2026. “So, what I tried to do when
I wrote this book was try to put structure on how retail is changing. A lot of people talk about how retail is dead. I do not think physical stores are dead but I do think bad retail is dead. “Retail is changing and there is
an opportunity to look for what’s winning and what’s doing well, and change in a positive direction and move away from the things that aren’t working as well in this new environment. My goal is to come up with a strategic framework, so that people can think about how they can plot their business and look to make a strategy that will work in this new age,” she explains.
Customer-focused marketing “In 2017 when I started this book, Macey’s – which is the biggest department store in the US – was closing a lot of stores. Now, it’s not going out of business, it’s still doing a whole lot of retail but it was closing stores. My question was ‘where was the traffic going that was leaving Macey’s?’ and the one place [the customers] were going was Sephora. Beauty and cosmetics is a big business; they put a lot of floor space in department stores for beauty, it’s got a big margin and it also has frequency. Now, what’s the difference between the way Macey’s used to sell cosmetics and the way Sephora sells cosmetics? Barbara clarifies: “If you came in to
buy cosmetics at Macey’s you would go to the counter and there would be a sales person on commission and you would ask that person to get cosmetics for you from behind the counter and you would have to do everything through that one person. If you go into Sephora, the cosmetics are all over the place, the salespeople are not on commission.
If you want to go into Sephora and put on make-up and go on a date and not buy anything…that’s ok with Sephora! You come in and you play with cosmetics because Sephora knows the way we buy product is by trying it on, playing, talking to your friends. What happens is, women flock to Sephora. I’ve stood in front of the Sephora in Philadelphia, where I’m from, and it was closed – I saw someone literally crying that they missed the doors. “Sephora is doing really well
and what I’m going to call that is ‘customer-focused marketing’.”
Digitally native vertical brands Gillette shavers lost significant market share in the US, as did a lot of the other consumer packaging companies, because the retail industry is changing so radically. So what’s stealing share from Gillette in the US and why? Barbara says: “Do you know
Dollar Shave Club? It’s what’s called the digitally native vertical brand – that means it started online and went direct. Direct to the end user. That business is also a subscription
business, and it was stealing shares from Gillette because it was selling completely differently and Gillette, with sophisticated brand marketing, still lost shares to a 26 year old that started a direct to consumer business – now that’s pretty shocking.” She continues: “What’s
interesting about these brands is that they are now going direct to the consumer, and brands never did that before, they used to sell through wholesalers, and the data stopped at the retailer. Now the brands are getting the data direct to the end user and this subscription model builds loyalty – so it’s a very different way of doing business and it’s significantly affecting very big and sophisticated brands in the US.” Barbara gives another example:
“GAP is closing lots of stores too. And where is the business going? To Zara. Zara is customer focused in the same way as Sephora. First of all, Zara is direct, so it goes directly to the end user and, second of all, in Zara all its sales associates were trained to watch what their customers wore coming into the store.” Barbara says the employees were
Retailers, are you doing something exciting in any of these product areas?
Have you grown sales as a result of new initiatives?
We want to hear your story. Contact the DIY Week editorial team at
diyweeknews@datateam.co.uk
Upcoming features in DIY Week: • 9th August Merchandising & POS • 23rd August Decorating then Glee Preview
Suppliers, send your product news to Ed Waugh -
ewaugh@datateam.co.uk 18 DIY WEEK 19 JULY 2019
www.diyweek.net
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