For retail brands new or old, consumers' expectations keep raising the bar. And these days, that bar--largely influenced by Amazon--is convenient, frictionless e-commerce and free, impossibly fast shipping.
Getting shoppers to leave their homes? That's a whole other challenge. Even the most well-known brands are learning that getting shoppers into stores requires offering them an experience they can't get elsewhere.
According to three retail executives onstage Sunday at this year's National Retail Federation's annual conference and expo, that seemingly impossible task doesn't have to be so hard. Below, they offer three tips on how any company can get ahead in today's experience economy.
1. Create partnerships that make you uncomfortable.
Just because her company has been around for 58 years, it doesn't mean the next 58 are guaranteed, explained Neela Montgomery, CEO of Crate & Barrel's parent company Crate & Barrel Holdings. So the company has been experimenting with new ways to bring in customers to the furniture and home goods chain. Last year, Crate & Barrel partnered with Cornerstone Restaurant Group to launch a restaurant inside one of its stores. Montgomery told the audience the effort resulted in "double-digit growth and traffic to the store."
She also said that by letting go of the idea that Crate & Barrel should operate its own wedding registries and instead allow its products to be added to third-party registry company Zola's lists, the company was able to get its products on more customers' wish lists than if it had kept things only in-house.
"I would really encourage you to seek out partnerships that respond to customer trends that make you uncomfortable," Montgomery said. "It challenges your thinking ... Those are all very healthy things for any retailer."
2. Don't promise perfection to customers.
Rental clothing company Rent the Runway ran into trouble last fall, when operational changes led to supply chain issues that meant customers weren't getting their rented clothes on time. Angry customers flooded social media complaining about the problem, and co-founder and CEO Jennifer Hyman even responded directly on Twitter.
I am present and doing all I can. Currently I'm doing customer service instead of playing with my 2 young babies on a Saturday so I appreciate your vocalness to improve things but please understand that we are all working hard and giving 110%-- Jennifer Hyman (@Jenn_RTR) September 14, 2019
Onstage on Sunday, Hyman explained the hiccup as a way to illustrate that the dynamic between brands and customers has changed. "We took the decision to be entirely transparent with our customers as to what was happening" and compensate affected customers, she said.
"I think that there's this new relationship that companies need to have with their customers. And that relationship is one where ... we don't promise perfection," she said.
3. Invest in the future--not in what your competitors are doing.
When customers see something that's copied, they immediately discount it, said Ron Johnson, CEO and co-founder of Enjoy. One example he brought up was Microsoft's opening of retail shops eerily similar to those of Apple, often setting up shop right next door or across the street. Before founding his company, which sends sales associates to customers' homes to help explain and set up tech products like phones, Johnson was the CEO of JCPenney, and he helped create and lead Apple Stores between 2000 and 2012.
Johnson argued that most retailers spend their money on things that aren't leading edge or won't set them up for the next decade.
"When I went to Apple, Steve said something pretty interesting," Johnson shared onstage, referencing Steve Jobs. "And Steve would say, 'How do I spend [Apple's revenue] differently? How do I spend that better?' I think that's a lesson, for all of us who run large companies, of every dollar we spend that's variable could be invested in something new, or next, versus now."