SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019

 
SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019
SATISFYING THE
CONSUMER WHO
HAS EVERYTHING
(BUT WANTS MORE)
Judith A. Russell
NILIT
Global Marketing Strategist

Performance Days Munich
November 13, 2019
SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019
Our Journey Today
              •External Factors:
               Economic, Technological,
               Geopolitical
              •Changing Retail and
               Media Models
              •Why the Demanding
               Consumer?
              •Brands That Are Winning
               and Why
              •What You Can Do to
               Thrive
SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019
Economic Backdrop: Positive
                         • Global economies
                           stable to growing
                         • EU enjoying
                           seventh straight
                           year of growth
                         • US GDP growth
                           strong
                         • Corporate profits
                           healthy, financial
                           markets at record
                           levels
                         • China, India, stars
                           among the BRICs
SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019
We’re Doing Okay!
• US economy at
  full employment
• Income
  inequality
  growing in US
• EU has the
  least serious
  income
  inequality
• 400MM people
  in China and
  375MM in India
  now middle
  class
SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019
Technology Rules
             • Consumers are more connected, informed,
               and empowered than ever before
             • Provides price transparency,
               unlimited/immediate access to product,
               information, media, engagement
             • Data analytics software
             • Streamlined supply chain
             • Physical stores as mini-warehouses
             • 5G is here, will accelerate trends and open
               up new technological possibilities
             • Next wave of digital commerce focusing on
               AI, VR, voice and visual discovery, IoT
SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019
The World is Flat
                    • Globalization driving down costs
                      of goods, increased access to
                      markets, products
                    • Cheap sourcing, oversupply
                    • Amazon now has sites in 20
                      countries, delivers in 100+
                    • Retailers, brands expanding
                      across borders - Zara, H&M,
                      Primark, Calzedonia, Nike,
                      Under Armour, Levi’s, Tommy
                      Hilfiger, Polo
                    • People traveling outside their
                      home country
                    • Nationalism (Xenophobia)
                      prevails
SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019
Exporting Global Fashion

                    Fila          Tommy Hilfiger
                    Champion      Moncler
                    Aigle         Pinko
                    Marc O’Polo   Salomon
                    Descente
SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019
This Has Caused RETAIL DISRUPTION
                  • Retail industry undergoing
                    major transformation
                  • Traditional players in crisis
                    mode: sales and earnings
                    declines, oversupply, falling
                    foot traffic, price erosion
                  • Mainstream brands maturing,
                    losing share to online and
                    rapidly growing next-gen
                    players
                  • So far this year in US, US
                    retailers have
                    announced 8,600 store
                    closures and 3,500 store
                    openings. This compares
                    to 5,800 closures
                    and 3,200 openings for the full
                    year 2018.
SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019
The Shift Online
                    US online apparel
                     sales expected to
                     grow by nearly 20%
                     annually over the
                     next 4 years, add
                     another $50BB in
                     sales
                    That is the
                     equivalent of
                     Macy’s, Nordstrom
                     and Kohl’s
                     combined
                    Amazon will benefit
                     most from this in the
                     US
SATISFYING THE CONSUMER WHO HAS EVERYTHING (BUT WANTS MORE) - Judith A. Russell NILIT Performance Days Munich November 13, 2019
Europe
                       Ecommerce expected
                        to generate over $620
                        billion in sales in
                        Europe in 2020
                       Western Europe
                        primary
                       Fashion is the number
                        one category

 Amazon, Otto,
  Tesco, Zalando,
  Asos, La Redoute,
  Argos, M&S, John
  Lewis
China
         Monday was
          Single’s Day in
          China, $38 billion
          in sales
         30% of China
          population has
          moved into the
          middle class in past
          decade; avid
          consumer economy
         285 billionaires in
          China, compared to
          600 in the U.S.,
          560 in Europe
Apparel Market Situation
                      • Massive power shift from Those
                       Who Make to Those Who Buy,
                       from Producers to Consumers
                      • Want what they want when they
                       want it where they want it (37.5
                       Materials Pop-Up in Boulder)
                      • Producers facing rising costs and
                       price pressure
                      • Supply chain very focused on
                       reducing cost of goods,
                      • If you reduce quality, consumers
                       will lose interest
                      • Must rise above the rampant
                       discounting, have a new
                       conversation
The Premium Market Getting Stronger
High Price, Consumer Relevant
                                Luxury Brands
                                Premium Specialty
                                Brands
                                Next-Gen Digital
                                Brands

Low Price, Consumer Relevant                        13
The Value Brands Evolving
High Price

                        Discounters, Off-Pricers
                        Pure-play Marketplace
                        Giants, Volume Fashion
                        players

Low Price                                          14
Middle Market Under Pressure
High Price

                   Mid-Tier Department
                   Stores
                   Mall-Based Specialty

Low Price                                 15
Selling Less of More: The Long Tail

   Sales

                 Number of Brands

   Read Chris Anderson’s book!!
   Hundreds of small, new brands with compelling brand stories will
    dominate, (technology-enabled front and back end)
   These players are more quality-conscious, less price-sensitive, add up to
    significant volume
Disruption in Media
A Global Platform
What Do Consumers Want?

                We Want it All
                We Want it All
                …And We Want
                it NOW
Demographic Shifts
                 • Millennials and GenZs buying
                   and thinking and living
                   differently than older
                   demographic segments
                 • Value-conscious, came of age
                   in recession, wary of big
                   corporations (except Apple
                   and Starbucks), want to live
                   a different dream
                 • Bypassing traditional retailers
                   and channels of distribution,
                 • First social media generation,
                   want to figure out and express
                   their personal style or “brand”
                 • Most traveled generation in
                   history
What They Want
• Brands and products that offer:
   •   Comfort
   •   Convenience
   •   Value
   •   Transparency/authenticity
   •   Sustainability
   •   Quality
• Multitasking clothing that does more
 that just look nice
• An elevated experience
• These demands drive all the key
  trends from athleisure to recycled to
  wearables
• If you’re not delivering on at least 4 of
  these, you’d better rethink your
  strategy
Convenience, Selection, Service

                 22
Customized Just for Me
Style with Speed

 Number of Annual Shopper Visits

            Everyone
              Else

    17         4
A New Concept of Time
                  Reduced lead times
                  Shorter and more
                   frequent cycles, blurring
                   of seasons
                  Future is impossible to
                   predict, can’t plan, so
                   must react faster
                  Inditex, others have set
                   new standard for speed
                   to market
  17
                  DTC vs. wholesale model
                  Buy now, wear now
Excellent Product
Collaboration
Marketing to Consumer Values
Shared Concern for the Planet

             Huge push for sustainability in fashion
             Copenhagen, Amsterdam, Berlin, London, NY,
              Portland
             Upcycling, closed loop
             Fiber alternatives – cellulosics, bamboo, hemp
             Recycled fibers and textiles – North Face, H&M,
              Macy’s others offering money or discounts to
              customers who bring in used clothing
             Slow fashion: Longer-lasting garments that don’t
              clog up landfills
             Issues are: greenwashing, lack of standards, how
              to certify/validate claims
Innovative Sustainability
Ethical Fashion
Pricing Integrity and Value
Skillful Curation
Elevated Customer Experience
Experience 2.0
Less is More
Compelling Brand Story
Celebrity Connection
Challenges and Opportunities
     • The disruption will continue: you must adapt or become
       extinct
     • Must be consumer focused – really talk to customers
       and engage them, they are your North Star
     • Continuous innovation – disrupt yourself
     • Invite everyone’s ideas
     • Work more closely with your supply chain partners to
       differentiate, innovate, improve quality, value, speed to
       market, responsiveness, delivery
     • THE WINNERS will be either low-cost players or
       upscale brands offering compelling proposition for
       premium but understandable price
     • Get rid of silos - COLLABORATE

39
Working in retail today is like trying
to change an engine while it’s
running. But you have no choice - if
you’re not trying new things every
day, you’re dying.

- Managing Director, XRC Labs, (Retail
Technology Incubator)
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