Article written by Anthony ‘Macka’ Wilson, Wilson Retail

It’s amazing when you step out of the bubble how things seem clearer. After 6 days of taking in the retail scene of the fine city of New York, including 3 massive days at the “NRF Big Show” (the world’s biggest retail trade show and conference), as part of the Australian Retailers Association/Deloitte Study Tour, that’s certainly what happened to yours truly. 

This was my first “Big Show”, and yep. It’s big. For the most part my eyes were bugging out and the little hard drive in my head was suffering from system overload! How big? 40,000 attendees from 99 countries representing 16,000 retailers big! Spread over 3 levels of the Javits Centre, the conference element had 200+ sessions on 10 stages. The expo was mind boggling; 800+ exhibitors, from the biggest tech companies, like Microsoft and Intel, to the newest start up. It’s impossible to get around and see it all. 

This was no junket, the trip was funded by my lil business so I was determined to get the most value out of it I could. Pages and pages of notes later, a camera roll full of photos and a head full of ideas, I think I achieved that goal. In hindsight it would have been good to go with a fellow surf retailer (or two) just to bounce ideas around. If anyone wants to shout me next year I’ll happily show you round!

There were a lot of recurring themes and some great sound bites from a variety of different speakers, including; Retailers that are winning have a clear point of view & point of difference. Personalisation was a big talking point as was technology needing to be an enabler to help people do a better job. Sustainability in all forms; from materials, ethical sourcing of product, over production & waste were big recurring themes. There’s a real focus by retailers on being good corporate citizens, as employers, ethically & environmentally. That said, there is still a lot of work to do on diversity and equality. 

The biggest theme was just how disrupted retail is:

“We are in a redefining era” – Eric Nordstrom, Nordstrom.

After all the carnage and store closures in the US, there is still a view that brands and retailers that have failed to innovate won’t survive. The US has had a couple of years of growth so it was surprising how many vacant shops there were in prime locations. My sense is that Australian retail is about 4 years behind the US. Yes, per person the US had double the retail space of Australia, even if what is to come for Australia is half of what the US went through we have quite a lot more pain and shakeout to come. 

As I digested the learnings and challenged my own thinking and my own approach to business, it also got me thinking about our industry, our issues and our opportunities. For the record, the views and commentary below are mine and not the views of the SBIA Board. I’m writing this in the hope that it stimulates thought and conversation on how we may serve our collective consumer better, and also still be here 10 years from now. 

Anthony ‘Macka’ Wilson & Rowan Hodge (ARA President) At NRF Big Show 2020

“80% of people believe the role of a corporation is to create social and shared value” – John Furner, Walmart CEO.

A key theme from the Big Show is the shift from business just being economic drivers for stakeholders, to being good corporate citizens; environmentally, ethically and as employers.

As an industry that is so connected and reliant on weather and our natural surroundings, we should have the environment and sustainability at the forefront of what we do. While some brands are ahead of the curve product wise, retailers should have stopped using plastic shop bags years ago and brands really need to come up with an alternative to the horrifying amount of soft plastic that’s used in delivering products to retailers/store. But that’s really only the tip of the iceberg.

The apparel industry, as one of the heaviest polluters, will be at the forefront of the consumer shift. Transparency of the supply chain, sourcing better, more environmentally friendly materials plus overproduction and waste will all come into sharper focus. A 2019 article by Jessica Baron in Forbes has loads of information, facts and figures if you’d like more background. To quote the article; “The ugly side of fashion is becoming clearer to consumers, and brands that don’t make a real effort to reform risk damaging their reputations in a world undergoing a climate crisis.” 

Interestingly consumers are starting to use apps to assist with buying decisions. If you’ve not seen the app “Good On You” it’s worth checking out. It rates brands across Labour, Environment and Animal. 

While there has been a gap between what we, as consumers, say and do the growing climate crisis seems to be changing that. The “conscious consumer” is real, there is a shift from fast fashion to slow fashion. Looking into the crystal ball, consumers will be buying less, but better. As an industry we need to focus on better. 

“I believe that beloved brands can be a unifying force [in a fragmented world], but we have to think differently about what it means to be a beloved brand,” Rick Gomez, Target.

As a sport, if that’s what you want to call it, the future of surfing has never looked more exciting. Participation rates are at an all time high, the 2020 Olympics are set to take surfing to the masses and we stand at the dawn of the era of wave pools. Yet the “surf industry”, as a sector, has been in recession for the past decade. Even if you disagree with the statement you will surely acknowledge business hasn’t kept pace with the number of people in the water or on land for that matter.

Why so? My view. We’re becoming commoditised. Our message is all too often about discounts or deals. Too many “2 for $X” or “3 for $Y” deals. There has been too much yanking on the price lever, too many store wide / site wide sales. As an industry we are a branded value proposition, not a volume play. Chasing inflated sales numbers with little or no margin is a big part of the issues facing the broader Australian apparel retail category.

Like our physical environment, our industry is an ecosystem that everyone needs to play their part. The market is finite, it needs nurturing, not loading it up with product in the hope it might sell or hit an inflated sales budget. There is only so much money in the discretionary bucket to go round at any given point, only so many consumers wanting to buy. Pulling the price lever over and over and over only making us less appealing, particularly to younger consumers. In turn there is little or no “heat” in the industry, which segways into my next point…

“We’re in a time when you have to think differently. That’s exciting.” – Michelle Gass, Kohl’s

At the NRF Big Show there was a real sense of change. I can’t remember who said it but it went like “the winners are winning and the laggards are well…” I think we need to go back to the drawing board and reimagine how we go about business as an industry. 

The “4 seasons” hasn’t worked. I think we need to come up with a different go to market strategy, the calendar needs an overhaul. As a minimum the delivery calendar needs to click forward a month to put the freshest product in at the appropriate time; Autumn/Winter needs to start in March, Spring needs to start in August and Summer in November to February. Over the top of the indent model there needs to be true quick to market product (kudos to the brands already on it). While I’m on a roll. We should be targeting 30% of stock as stockline product that’s never out of stock. We need to flip from the “push model” to the “pull model”. Let’s feed the market not drown it.

“Stores need to be more experiential and not just about picking up an item” – Eric Nordstrom, Nordstrom’s 

By all accounts, online and omnichannel have been high on the agenda for the past few NRF’s as retailers played catch up in the space. Let’s not rip the bandaid off the untapped opportunity for a multi brand national/online retailer to be the online fulfilment partner for independent retail. This year there was lots of talk about the importance of the physical store as online can’t deliver the experience and the brand promise the same way a store can. Interestingly many pureplay online retailers are opening physical stores. 

Obviously the days of “rack em high, watch em fly” are long gone. Physical retail has got to be curated for the brand values and local market and delivered with exceptional and knowledgeable customer service. It’s got to be an immersive experience. While many of the good industry retailers are doing much of this already there’s a lot more we could be doing collectively. 

How so? Well, another key theme of this, and recent NRF’s was personalisation and customisation. Stores need to become experience centres, where consumers can come and design their custom board shorts, even better if they are co branded with retailer and brand. Where thongs can be custom built across a range of colour straps and footbeds and sunglasses components can be assembled in store.

Nope, it’s not a new concept for some of our industry brands. Maybe they were ahead of their time, whatever the reason, the few brands that played in the space no longer do and the opportunity is now.

But what about before the store? I think another piece of the puzzle that has gone missing is bringing the experience to life with “athletes” and activations. I still have people talk about when Tony Hawk and the Airwalk team toured the east coast stopping in my shitty little store in the early 90’s, or when Mike Stewart did a coaching clinic in ‘95. Or the Freeway Tour when Layne, Occy, Parko, Taj, Luke Egan and co came in 2003. 

If we’re not about the experience we’re no different to the rest of the mid market apparel category. 

“There are two things Starbucks attempts to do: Number one is to have the wisdom to know what to honor and preserve from the past: the mission, the values and the importance of human connection … . And we have to boldly dream about the future.” Kevin Johnson, Starbucks 

We need to dream boldly about the future. I think we’re at a crossroads; we can’t keep doing the same thing and hope for a different result. Hope isn’t a strategy. 

Agree or disagree with any or all of the above, the fact is the 4th Industrial Revolution is changing the shape of retail, and in turn our industry, forever. The new generation of consumers are digitally native and environmentally focussed. The “conscious consumer” is real. We all have a smartphone in our pocket, product information and price transparency is at our fingertips. Anything that is remotely commoditised will become more so. Collectively we need to do more meaningful business, not race to the bottom. I’ll leave the final say to possibly the best quote from the Big Show:

“What we are seeing in retail is a collapse of the middle. A lot of retailers are standing close to the edge and without making a lot of changes they are going to be in trouble. They are drowning in a sea of sameness. Boring retail is dead. My advice is to choose remarkable retail and inspire customers to spread your story.” – Steve Dennis, President & Founder, SageBerry Consulting

Let’s not be boring and let’s not be in the middle.