With the 2015 back-to-school season all but wrapped up, retailers have turned their attention to upcoming holidays, concerned about the state of consumer confidence in the wake of the recent stock market downturn. Indeed, back-to-school sales were tame, but shoppers were less guarded about their digital enthusiasm, clearly taking advantage of omnichannel shopping opportunities.
As the head of the NRF CMO Council, retail veteran Kelly Gilmore sees the effect of those consumer attitudes up-close. The advisory group, which was started in 2013 to focus on enhancing the value of marketing to retailers, has increasingly homed in on the role of digital channels and their integration with the brick-and-mortar store.
Just ahead of the annual Shop.org Digital Summit on retail and technology, CMO.com spoke to Gilmore about marketing strategies, how marketers are preparing for the coming holiday season, and when it's OK to chase the shiny new object.
CMO.com: You oversee the NRF’s network of CMOs. What are some of the issues that are top of mind with them?
Gilmore: A lot of the retail marketers are looking at back to school and how consumers are using technology, what a lot of the behaviors are around technology, so they can understand as they develop their holiday programs. They can learn from what they have seen in back to school.
They are definitely going to be testing and learning. Technology is changing at an amazing pace. Mobile is a hot topic still; retail marketers want to understand how the customers are using the device in-store, what they are doing with it. They also want to understand attribution [of sales] on the back side. On wearables and other issues, they are exploring. I see them attending sessions with startups and learning about it.
But they definitely need to make sure that they are in step with the customer and what the customer is doing. Because really, in the end, the customer is king.
CMO.com: What are some common mistakes they make, especially taking omnichannel into account? As they adapt, what’s your advice?
Gilmore: They definitely need to look at the overall experience that they’re delivering to the customer. It may be great for someone who’s got a very young [customer] base to be working on Snapchat and through the other social channels, or testing and learning there, but it may not be appropriate for a brand that has an older-skewed audience.
They need to understand what the customer wants and avoid chasing a shiny object because “everybody else has it, so we need to have that.” That is one of the things we tell retailers: Make sure it’s the right thing for your brand because not everything is the right thing for the brand.
I want retailers to make mistakes because that means they are fostering an environment that allows for taking risk; that is a must with all the disruption out there. With the speed of technology and the access that today’s consumer has to information, retailers need to test and learn. Smart retailers learn from mistakes and move on.
CMO.com: It has been around 15 years since e-commerce began in earnest, but retailers seem to still be struggling with the integration. What issues are challenging them? Legacy systems? Cultural issues?
Gilmore: I think you hit two of them on the head. It’s definitely the integration of existing systems and understanding how it all works together. Not every system works for every company. There’s no one-size-fits-all approach, and that’s what they’re trying to figure out.
I was talking with our chairman the other day about challenges and how, as we move to the omnichannel view and are incorporating e-commerce and technology, the internal structure of retail organizations is changing and adapting. How they work together is very different, and there’s a lot of change.
Understanding that is understanding how it’s not only impacting the customer, but also how it’s impacting the organization, the employees—to get everybody on the same page, moving in the same direction. That was her quote to me: “Kelly, really, this takes time to do.” That might be one of the issues facing the integration.
CMO.com: So how do you reconcile the drive to move at digital speed but not just chase the shiny object?
Gilmore: I think that’s a huge challenge for the retail marketer. Some of the people who are winning are realizing that … instead of taking it all at once, they are being able to take some stuff and test it in a lab or situation and implement it in a few stores or certain region of the country before you roll things out. It’s one way they can help move forward.
CMO.com: Some concepts for testing, such as pop-up shops and loyalty programs, seem to have lost some of their novelty. How are CMOs compensating?
Gilmore: What they should do is to be open to new ideas and new concepts that come in from their staffs and their customers. We need to allow room for creativity.
In loyalty, you’re seeing some different things happening on that front, like Macy’s new Plenti program, where they’re bringing in additional partners. We’ll see how that works. Retailers are also combining mobile and loyalty to help personalize and add convenience for the customer and the shopping experience. Starbucks has completely changed the game, though, and I think we’ll continue to see more companies look toward mobile loyalty programs as they try to both acquire new customers and keep their current, loyal ones happy.
CMO.com: What are some learnings from the back-to-school season in terms of how consumer attitudes are shaping up? How are marketers facing those challenges?
Gilmore: People are trying things in the digital space, like the haul YouTube videos, where they have teens talking about what they got and what they hauled in. More than ever, kids are influencing parents on what they buy, and they definitely talk to their friends. It’s so easy for them to use social networks to talk to their friends—even while they’re in the store with their parents—and say, “What do you think about this?”
Retailers are watching that and making sure they are in the social channels, that their platforms can provide ways to share, so that the kids can share, but also trying to be sensitive to the parent because they are the ones with the wallets. They’re making sure that they see value and that they see this is the right thing for what they need.
CMO.com: That’s a fine line to walk. Does data help? Are retailers, who have great sources of data, using it to keep up with consumers?
Gilmore: They have, more than ever, more access to data than they know what to do with. You’ve got it from your channels. You know what device they’re on, what operating system they’re on, if they’re abandoning carts, how long they stay with you, how long they’re researching.
There’s a lot of data out there. Those retailers that can figure out how to apply the learnings and put then to work the right way are going to win. There is definitely a lot of data they can use, and, hopefully, they can use the right data points to adjust their marketing plans.
CMO.com: Consumer expectations seem to change so quickly. Are retailers able to keep up?
Gilmore: The past couple of years have been such a data-driven environment; I think they’re feeling better about all the data out there and being able to use it. You definitely see people figuring out, “We see this from the data, so let’s make an adjustment here.”
It’s interesting to watch on the customer side what they’re willing to share data-wise--where that creep factor is, when does the customer get something that’s, “Oh, that makes me uncomfortable. I didn’t know they knew that much about me.
You also see there are other people who are willing to give all their information to get a deal, an update, or have products served to them that they think are the most relevant, or things that are curated for what that person wants. We’re talking about personalized experiences: “I’m willing to give you more data about me if I can get a more curated, personalized experience when I come to your online store, or if your associate knows that in the store and can deliver better service, bring products that I want to see or wear or try on.” The exchange of data for a better service experience seems to be where customers get comfortable.
CMO.com: What’s the next marketing frontier for retailers: virtual-reality shopping, wearable technology, or something simpler, like better associate training?
Gilmore: It is definitely what the customers are looking at. We’re going to be talking about a lot of this stuff in the Shop.org summit. We’re going to get into some of what we call the must-haves of marketing as we go into the last-quarter holiday season. We’re going to look into things like user-generated content and how retailers are using that as far as sharing.
One of the brands that are speaking is Giggle. They are doing some interesting things. It’s a children’s site; they have all the baby stuff and people send pictures of their kids and babies with their products. They have done a nice job on their website. When you go over the actual product, it’s not just information; it shows a picture of someone’s baby.
We’ll talk about videos, how people are using videos in email, and how email marketing is still being used. It’s something we still need to address and talk about. We’ll talk about viable pins. We’ll have someone from Pinterest. They see a lot of trends about what people are pinning and what they’re doing. We can learn from these other channels and apply it.
When you’re shopping, you don’t say, “Now, I’m looking on this channel.” It’s just the brand and the store. So how do I make it easy and convenient for my shopper to get what she wants when she wants it at a reasonable price?
Retail is a fast-paced industry that demands innovation, and retail marketers are always looking ahead; their company depends on it. There is talk about the impact of the Internet of Things, wearables, and even robots in-store, but retailers have to get the basics right first, and customer service and experience are at the forefront.
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