Recap: World Department Store Forum 2015

I had the opportunity to attend the 2015 World Department Store Forum, April 23-24, in Rome, organized by the Intercontinental Group of Department Stores (IGDS) and GruppoCoin. The conference’s theme was “Strengthening Emotional Bonds with Customers.”  The speakers were an impressive assemblage of C-Suite-level executives from some of the world’s leading department stores and lifestyle brands along with a few tangential industry experts to round out the agenda. I’ve attended this conference for years, and the level of collegial information sharing that occurs during the course of it continually impresses me.

One of the peripheral speakers was Richard Walker, senior research associate for the Blue Brain Project, a brain mapping research effort by École Polytechnique Fédérale de Lausanne, currently underway in Switzerland. He spoke about how emotions are fundamental to our intelligence, and that memorable and/or pleasurable experiences chemically alter the brain by imprinting an emotional response. I began to think of the movie “The Terminator” as he spoke of the future implications of “putting the brain” into technology, but as he discussed the predication capabilities that will be possible as the mapping of the brain nears completion (in about 10 years), I realized the power of the brain, coupled with technology and Big Data, to fuel targeted and personalized marketing that could predict individual consumer desires and entice them to purchase – long before they know they need or want a product. 

Another peripheral speaker was Ajaz Ahmed, founder and ceo of AKQA (San Francisco), one of the world’s leading digital advertising agencies. His presentation highlighted entrepreneurial corporate cultures. One of his most notable statements during the presentation was in reference to service, and how talking to is not the same as having a conversation with” someone. This became a recurring theme throughout the conference, as other department store execs discussed the need for direct communication with customers and the ultimate ramification of this shift – if you engage in a conversation, you must respond. John Talbott, Fossil’s former vp of marketing and vp of apparel, and current director of research at Kelley School of Business at Indiana University (Bloomington, Ind.), referenced a statement by Coca-Cola’s marketing team: “On a very good day, we’re part of the conversation” – emphasizing that this humility with regard to engaging its consumer base comes from one of the world’s most successful corporations.

The question remained, however: How do retailers move from conversation to conversion? Emotional engagement appeared to be key in most of the examples given. Maserati (Italy) CEO, Harald Wester, presented a video clip of a new advertising campaign that brought half the audience to tears. The video told the story of two young brothers – the younger brother apparently deaf from birth. The video links the deaf child’s ability to feel the vibrations of the Maserati engine as it drove past their building to his later inspiration to pursue music. The video clip ends with a triumphant solo performance as a young adult at a premium concert hall.

Woolworths (South Africa) CEO, Ian Moir, shared their temporary employment of the Soweto Gospel Choir in their grocery department, which broke out into an a cappella performance of a nationalist song the morning after Nelson Mandela’s death. The amount of YouTube postings and subsequent hits for this impromptu happening was through the roof.

Patrice Wagner, chair and ceo of Le Bon Marché, gave an excellent presentation about owning your market – in their case, Paris. To represent the best of their local culture and exemplify the “Rive Gauche” sensibility has become their mission. Similarly, the chair of Eataly (Monticello d'Alba, Italy), Oscar Farinetti, expounded on their mission of bringing the essence of Italy with every Eataly opened, but balancing the local with the imported and maintaining that storytelling component was paramount.

It was interesting that all the presentations considered technology integration a given, exhibiting that retailers now understand shoppers are engaging with brands across all available touchpoints. Several interesting facets of today’s consumers were brought out during the speeches.

While everyone has been focused on delivering to millennials, John Talbott cautioned that they’re not all created equally – two distinct groups exist: The older subset roughly aged 27 to 34, and the younger, ages 18 to 26. What they have in common is their high self-actualization and high self-esteem; and they are well connected both locally and globally. And the biggest differences are their shopping habits and preferences.

Again, the emphasis on cultivating data was reiterated, and the ability to personalize the invitation to shop must be developed by retailers to thrive.

Some surprising statistics were presented by Nathalie Remy, a partner at McKinsey & Co. (New York). It would appear, based on their research, all affluent shoppers are now digital; and when comparing the number of mobile devices, weekly time spent on the Internet, and weekly social media usage, the statistics are remarkably close.

Further, she spoke about how cities – not countries – will drive growth, and how tourists spend four times as much as locals, but that store productivity continues to decline, and players like Amazon continue to introduce significant disruption in the industry. Remy advocated that department stores become strong brands themselves, and evolve from a positioning of being a “house of brands,” finally asserting that a strong brand combines both rational and emotional components.

After the last Friday session, I headed out to squeeze in a quick excursion to complement my brief trip: the Chiostro del Bramante. There was a Marc Chagall exhibition on display entitled “Love and Life” that I was anxious to see. Utilizing the map application on my iPhone, I made my way through the streets north and west of Piazza Navona until I found it. The space was small, but the exhibit was amazing. It contained sketches from books he illustrated, both of his own authorship and for his wife Bella, as well as unpublished prints.

The pieces on display were very moving, as they revolved around his love for his hometown in Russia, his religion, and his wife and family. Given my own imminent return to home and family, and the homesickness that started setting in, it struck such a strong chord that I was determined to obtain a souvenir from the exhibit. I didn’t think twice buying the catalog in the bookstore (conveniently located at the exit, of course), despite loathing the idea of dragging the tome all that way … and it being written in Italian. It didn’t matter – I had to have it.

Now, that is an emotional connection.

Kathleen Jordan, AIA, CID, LEED AP, is a principal in Gensler’s New York office, and a leader of its retail practice with over 24 years of experience across the United States and internationally. Jordan has led a broad range of retail design projects as both an outside consultant and as an in-house designer. She has led projects from merchandising and design development all the way through construction documentation and administration, and many of her projects have earned national and international design awards. Contact her at kathleen_jordan@gensler.com.