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Learnings from IGDS World Department Store Forum 2017

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The Intercontinental Group of Department Stores (IGDS) held its World Department Store Forum earlier this month in Toronto. I was able to attend this conference, and as always, I found it inspiring and invigorating. There was an incredibly diverse lineup of speakers, each with a unique perspective on the state of the industry and on the ever-shifting mindset of today's consumer.

The big elephant in the room, sitting center stage, was the theme itself, “Digital and Bricks & Mortar – One Magic Experience.” The question was posited to many of the speakers, but my favorite response to "Is it digital or physical?" came from Susan Plagemann, chief business officer of Vogue/Condé Nast USA: "It's just Vogue." Her point was spot on: Department stores must become unique brands, provide a unique service, and understand that their competitive advantage over online businesses is the critical role of the human factor.

It was interesting to hear from Erik Nordstrom, who shared what Nordstrom was doing to address the aforementioned advice. With regard to the brand’s recent expansion into the Canadian market, he candidly shared that its original strategy was to focus on white space in the market, where their product offering differed from the local competition. But they listened to customer feedback, whose input validated that they were looking for the "Nordstrom experience" they got in the U.S. The message was clear: Be Nordstrom, not Nordstrom-lite nor Nordstrom Canada.

He went on to share Nordstrom's efforts to reconcile the difficulties for its staff with regard to lost commissions on sales conducted online after assistance was provided in store. In response, the retailer created a communication platform called Style Boards so sales associates can curate personalized looks with new products and send their picks directly to the customer via what is essentially a pre-populated cart. The customer can then choose all or some of the suggestions and then go straight to checkout, allowing the sales associate to earn the commission. This initiative seemed to pull together two other notable points of discussion: One, a successful retailer will be a direct user of Big Data; and two, training and investment must be key to educate, incentivize and empower sales associates.

This alludes to the biggest takeaway from the forum: Do not talk about channels – the consumer is the channel. And blissfully, the “M” word was less prevalent: It's all about Gen Z now. A featured speaker on this topic was Sandra Cortesi, director of youth and media at Harvard University’s Berkman Klein Center for Internet & Society. Her insights on this emerging consumer demographic were fascinating, and I saw my fellow boomer/Gen X peers taking copious notes. This was her advice: Better peer-to-peer communication; focus equally on offline experiences and online retail – it's all the same to them; give these shoppers venues to participate and co-create; keep it real, messy and unfiltered; stand for something; and finally, be transparent about how you, Mr. Retailer, are using their data.

Speaking of using data, a great tip offered on data collection came from the vp of intelligence at L2, Evan Neufeld. He emphasized that the cardinal sin is capturing data without using it. This alienates customers and disincentivizes further sharing. Successful brands don't collect, they deploy.

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Other speakers rallied the following battle cries: You cannot shrink your way to profit; shrug off the defensive mindset, and instead go on the offensive (if you're strong in a category, get stronger by shifting to a customer-based mindset); use online to the advantage of the whole, and don't focus on the individual parts; and lastly, collaborate.

Yes, collaborate. I think we all have seen the original version of the movie, “A Miracle on 34th Street.” (Please don't tell me if you haven't, just go and download it now.) In it there is the requisite scene of Mr. Gimble, and separately Mr. Macy, racking their brains in how to outmaneuver the other to win more consumers over the holiday shopping season. The mantra for this forum was soundly counter to this. From Erik Nordstrom to Donald Kingsborough, president of Westfield Retail Solutions, the message was clear: Retailers must collaborate for the good of the industry. The idea around development of a common platform was broached in several presentations as a way to collectively compete against Amazon.

But all of these insights aside, the most forward-looking of them all came from Richard Umbers, ceo and managing director of Myer, as he shared the Australian department store’s new brand positioning as "The Department of Stories." Personally, I think "Departments of Stories" is a more accurate descriptor, but the idea definitely had strong resonance nonetheless. His talk shared this "journey to the new Myer," in which it is striving to be less about where categories sit, and rather about how customers shop and how they use the products. The brand is using its new moniker as a vehicle to create newness and effect change. Some of their initiatives are focused on technology in service-to-service, identifying new hires for new business needs and personalization at scale.

In this period of negative press about the retail industry everywhere you turn, it was truly energizing to hear these speakers discuss the opportunities within the challenges to encourage embracing change and to offer each other their own strategies in the hopes that a rising tide lifts all boats. I, for one, was grateful to leave Toronto more optimistic than when I arrived.

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.

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