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CMOs chart new direction at GRMA event

BY CSA STAFF

Thought-provoking presentations and forward-looking exchanges dominated the annual gathering of the Global Retail Marketing Association’s (GMRA) Executive Leadership Forum at the Don Cesar resort on St. Petersburg Beach, Fla.

More than 125 senior executives from 60 retail companies gathered at the exclusive event to contemplate the future of brands and shoppers, the evolving role of technology and marketing and even larger planetary considerations. They heard from an eclectic mix of thought leaders from diverse backgrounds, including GRMA’s president and CEO Stephanie Fischer. She has served as the organization’s president and CEO for the past 10 years and during that time has observed a noteworthy shift.

“Today’s retail CMO is at the right place and the right time to change not only their company, but the society that the retail industry operates in as well,” Fischer said. “The CMO’s job is evolving and the journey is different based on the culture of each company and how the position is viewed by the CEO and the other C-suite executives. The concept of running your organization through the prism of how the customer sees you regardless of how she “touches” you, is more easily said than totally embraced by the senior management team right down to the front line associate at the register or iPad.”

Fischer contends that many CEOs are caught up in the demands of running a business in an environment of unprecedented financial scrutiny that is not always conducive for more long-term customer views and sustainable satisfaction metrics. It falls to the CMO to cut through the organizational silos and develop structured customer platforms and processes that stay focused on a culture of a higher purpose while helping to deliver relevant, impactful and authentic messaging to drive short term profitable sales, according to Fischer.

There were some familiar themes evident at the event — the importance of culture, the need to embrace experimentation and authenticity — but where things really got interesting is when several of the speakers from non-marketing backgrounds weighed in on industry challenges.

For example, Michael Schrage serves as a research fellow at the MIT Sloan School’s Center for Digital Business and isn’t a household name in retail circles. Nevertheless, he shared some unconventional insights and intrigued attendees with the statement, “making shoppers better makes better shoppers.”

The cryptic statement was given some context when Schrage outlined three organizing principles for omnichannel innovation. For example, organizations need to address how they are investing in new and novel shopping capabilities, ways to productively experiment with inexpensive experimentation and organizational alignment that feeds delivery of a superior shopping experience. Schrage suggested the emphasis on new products and new experiences should be supplemented by an emphasis on redesigning customers. That is something the like of Henry Ford, Larry Page, Sam Walton and Jeff Bezos did when they developed cars, search engines, everyday low price retailing and in Bezos’ case, an online entity that helps customers make decisions.

The challenge of the CMO is how to align the question of what ‘business are we in?’ with ‘what do we want our customers to become?’ according to Schrage.

The most unconventional speaker at the GRMA event was Benjamin Zander, conductor of the Boston Philharmonic Orchestra, who addressed the topic of “the art of possibility.”

“The premise is that many of the circumstances that seem to block us in our daily lives may only appear to do so based on a framework of assumptions we carry,” Zander said. “Drawing a different framework around the same set of circumstances can lead to new possibilities. ‘What assumption am I making that I don’t know I am making?’ Once you have that answer, then ask yourself ‘what am I inventing that I did not know I was inventing that would give me other choices?’”

Shifting the framework allows for a different way of looking at something and enables a person to move into a new universe of possibilities, according to Zander.

Possibilities was also a theme address by Joshua Cooper Ramo, vice chairman of Kissinger Associations. He approached the issue from a different perspective, informed by the organization’s global perspective, and addressed the topic of “Age of the Unthinkable.”

The world is changing rapidly with what he called “explosions” in the number of actors, choices and networks. For example, there are more individuals on the planet, grouping together in new and disruptive ways. There are more urban residents, hedge funds and terror groups. Mass urbanization creates new groupings, new markets, new products. And it creates a situation where innovation becomes inevitable. Innovation emerges because of the newness taking place and coming together in urban areas. The world is also more networked than ever before. Take the example of the Arab Spring, a leaderless rebellion, organized through Twitter or from reaction to events posted on YouTube, according to Ramo.

The result is what Ramo called the postmodern identity, where people constantly have to change identity, change roles and change jobs. In the postmodern world people have complex identities and in this age everyone does not want to be American or Westernized, but rather find their own identities.

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Under Armour, New York City

BY CSA STAFF
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The athletic performance-wear giant known for its commitment to innovation goes big in Manhattan, opening its newest and largest “brand house” location to date. With 10,000 sq. ft. of selling space, the store immerses customers in the Under Armour mystique and houses its most comprehensive assortment of men’s, women’s and children’s apparel, footwear and equipment in the country. (The “brand house” designation is given to Under Armour’s full-line retail stores, with innovation, specialization and personalization the defining elements, as opposed to its larger network of outlet stores.)

Entering the store, customers are greeted by a huge video wall, made up of over two million LED lights, that plays a 22-minute continuous loop of video highlighting products and Under Armour-affiliated athletes engaging in sporting activities. Bold, oversized photos drive home the brand’s performance positioning.

The first floor houses men’s and women’s non-running apparel. Each of the fitting rooms is modeled after a different court or stadium, and each has a name that reflects a locale where the brand has a presence. Large murals of cities cover the walls.

The lower level is home to the children’s area and men’s and women’s running merchandise. It also houses the company’s first Rowhouse Basement shop (the name is a reference to the company’s founding in the basement of the Georgetown home of CEO Kevin Plank’s grandmother). It’s designed to serve as a VIP area where staff provide private consultations to athletes and celebrity clientele in an intimate setting.

With five U.S. locations to date, Under Armour’s “brand house” model was not created for mass roll out. Instead, the company intends to focus on “key markets where we can be strategic,” CEO Plank told investors in a recent conference call.

Creative advisory services for store layout and design: a + 1 design corp., New York City


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Express stumbles in Q1; closing 50 stores, ramping up outlet-store expansion

BY Marianne Wilson

Columbus, Ohio — Express Inc. said on Thursday that its fiscal first-quarter profit fell to $5.08 million, from $32.4 million a year earlier. The company also announced it will close approximately 50 stores during the next 36 months, primarily at the end of their leases, even as it ramps up expansion of its of its new outlet-store concept. Express debuted its outlet format this past April.

“I am also delighted to note that the 17 Express Factory Outlet Stores now in operation are exceeding our plans and being met with great enthusiasm. We expect them to contribute to a stronger second half. In light of this performance, we are accelerating future outlet store openings,” said Michael Weiss, chairman and CEO, Express.

Express sales fell to $460.7 million, from $509.4 million. Same-store sales plunged 11%.

"We had anticipated a very challenging first quarter, but our actual results were weaker than planned,” Weiss said. “Our business strengthened in April, but not to the degree that we anticipated when we formulated our first quarter guidance. While external challenges contributed to the decline in our first quarter performance, we also did not execute as well as we could have."

Express said its 50 store closures are expected to result in profit improvement of $5 to $8 million once all locations are closed. The closings are expected to start at the end of its current fiscal year or the beginning of the next fiscal year.

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