WORLDRETAIL CONGRESS2018WHERE GREAT PEOPLETELL GREAT STORIES

A review of the 2018 Congress with key takeaways, speakers and analysis.

CHAIRMAN’SREVIEW

INTRODUCTIONRetailing has been facing multiple challenges for some years now but none greater than the disruption of the entire industry that has been brought about by the digital revolution. We have heard at recent meetings of the World Retail Congress how technology is the key driver of change and that retailers have to grasp the need to transform their businesses if they are to survive in the face of new competitors and new channels. Those continue to be the themes that are front of mind across retailing.

But in building and researching for the 2018 Congress programme there seemed to be another important question and that is around how retailers can create a point of difference to win customers and beat their competitors. Which is why this year’s Congress theme was: “Innovate to Win”.

We wanted the Congress to focus on how retailers can create that edge that sets them apart and that means being different. This can only happen by encouraging fresh new thinking and a new approach to all aspects of the business: from product, to service, to the way the stores and website function and engage right through to a new business structure.

Across the three days of the Congress, over 170 speakers addressed this theme and shared their thoughts and insights as well as practical examples of how they are innovating to win. It helped create a vibrant and positive meeting of the World Retail Congress.

This important report seeks to bring together as much of the content, the interviews, presentations, reports and studies to put some shape around the key takeaways. We hope you find it useful. On behalf of the whole Congress team, thank you for everyone’s contribution and we look forward to welcoming you to the 2019 meeting in Amsterdam.

WORLD RETAIL CONGRESS

1. INNOVATE TO WIN!The Congress theme reinforced a message that came across loud and clear from so many sessions. Today’s retail world means that the long-established ideas and models are being swept away.

AVERY BAKER LAURA ALBER

Avery Baker

Avery Baker

Chief Brand Officer President & CEOTommy Hilfiger Williams-Sonoma, Inc.

What was the real message and importance around the focus on innovation? For many speakers, it meant a need for urgency and a sense that everything needs to be reviewed and in many cases ripped up to start again. The old retail ways are no longer relevant and in that, retailers shouldn’t be afraid, but should embrace this new approach.

One of the most open and honest presentations heard at the Congress was delivered by Avery Baker, the Chief Brand Officer for Tommy Hilfiger who said that the senior team had come to realise that the brand was facing multiple challenges, not least being that it had an ageing

customer base and needed to win new, younger customers at a time when it was clear that today’s consumers want instant gratification. The team then gathered to write the brand obituary to force themselves to be brutally clear about the challenges. But from that they were able to build a new strategy and culture which led to the creation of “see now, buy now” from the runway collections.

Giving focus to the challenge for retailers, Dr Barbara Kahn, the Chaired Professor of Marketing at The Wharton School, said that: “Retail is so competitive now, you

have to be the best at something, and then leverage your leadership ability to be the best at something else”.

And reinforcing this need for a new way of thinking in retail, H.E. Mohammed Alabbar, Chairman of Emaar, one of the biggest retail and property groups in the UAE, said in his fireside chat session on day one of the Congress: “One of the greatest things I personally learned when starting an ecommerce venture with the young team that I have is that I realised that my normal way of doing business is obsolete. I don’t think it has a chance to survive.”

For Laura Alber, President and CEO of Williams-Sonoma, “retailing is always about great product, marketing and sales but at every level it has to be

RETAIL IS SO COMPETITIVE NOW, YOU HAVE TO BE THE BEST AT SOMETHING AND (...) AT SOMETHING ELSE

DR BARBARA KAHN

HE MOHAMMED ALABBAR

Chaired Professor of Marketing

Chairman

The Wharton School

Emaar

WORLD RETAIL CONGRESS

2. SPEED IS EVERYTHINGIt is not just change that is creating so much disruption but it is the pace of change. How retailers react to the need for speed will define tomorrow’s winner and losers.

Avery BakerClick here to see an exclusive interview from WPP The Store’s exclusive programming at the World Retail Congress. WPP’s David Roth, CEO of EMEA and Asia interviews Olaf Koch, CEO of Metro Group

Technology waves are coming ever faster. Consumers are adopting new technologies just as quickly and as a result are unforgiving of those retailers and service providers that don’t keep up with the latest ideas. As Martijn Bertisen, Google’s UK Director of Retail and Technology put it: “if you’re not obsessing about speed, you’re probably obsessing about the wrong things”.

According to Dan O’Connor, who heads the Managing the Future of Work Initiative at Harvard Business School, the stage of economic development we are now in (“the algorithmic economy”) means that everything is accelerating. “Speed to scale has shortened” he said.

Retail strategy now has to be built around the assumption that the latest trends and ideas won’t remain for long. It means that you have to accept that change is constant and it has to be built into the way or the speed with which decisions are taken within the business.

Olaf Koch, the CEO of METRO AG shared the approach taken by the group. Not only did it decide to split the business into the food service and cash and carry business, Metro and the consumer electronics business, MediaMarktSaturn, but it has pushed greater autonomy down the business to give countries, regions and stores greater decision making in order to respond quickly to their customers.

IF YOU’RE NOT OBSESSING ABOUT SPEED, YOU’RE PROBABLY OBSESSING ABOUT THE WRONG THINGS

MARTIJN BERTISENUK Director of Retail and TechnologyGoogle

DAN O’CONNORManaging the Future of Work InitiativeHarvard Business School

WORLD RETAIL CONGRESS

3.ROBOT WARSAutomation, Artificial Intelligence and robotics will be the drivers of greater productivity - and efficiency and as we heard at the Congress, their effects are already being felt.

Avery BakerClick here to see an exclusive interview from WPP The Store’s exclusive programming at the World Retail Congress. WPP’s David Roth, CEO of EMEA and Asia interviews Richard Liu, Founder, Chairman and CEO of JD.COM

“Sooner or later our entire industry will be operated by AI and robots, not by human beings like today anymore.” So said Richard Liu, Founder, Chairman & CEO of JD.COM. It might sound like a nightmare vision for many but not for Richard Liu. As founder of JD.COM, he told the Congress that the driving premise of his business from its creation to today is to be able to deliver to customers faster and more efficiently. With 500 distribution centres and plans for 800 over the next five years, he says at the speed customers demand their goods, it is impossible for humans to process the information and logistics fast enough when robots and AI can.

The core driver for the adoption of AI technology though is the increasing volume and power of data which requires highly sophisticated and fast analysis to be able to interpret and respond to. “Data...retail”, Google’s Martijn Bertisen.

But asked if the growing and inevitable use of robots would remove staff completely from stores, Veronique Laury, the Group CEO of Kingfisher, said that in her view, stores in the future will only exist if there is a human interaction between the customer and a member of staff.

SOONER OR LATER OUR ENTIRE INDUSTRY WILL BE OPERATED BY AI AND ROBOTS, NOT BY HUMAN BEINGS LIKE TODAY ANYMORE

VÉRONIQUE LAURYGroup CEOKingfisher

WORLD RETAIL CONGRESS

4.GET READY FOR TOMORROW’S CUSTOMERS The millennial consumer may be re-shaping retail and business, but as we heard at this year’s Congress, we now need to get ready for Generation Z.

Avery BakerManaging DirectorWGSN

CARLA BUZASI

Retailers should never stop focussing on their customers but that has never been more important with traditional consumer classifications changing. One of the outstanding presentations at the Congress was delivered by Carla Buzasi, the Managing Director of trend and fashion forecaster, WGSN. In revealing the findings of a new and extensive global study of Generation Z – those born between the mid-1990s and the early 2000s – Carla showed that this important group that already makes up two billion people globally is set to change the way that they interact with brands and retailers.

The important starting point is that we might define them as Gen Z, but as Carla said, don’t ever tell them that. And

the reason is that they see themselves as individuals long before they would ever want to be identified as belonging to a group. This is a generation that is completely digitally native having never know anything other than a mobile world. Their drive for individuality means that they want brands that respect that. WGSN’s research also calls this Generation, Generation Me. Equally, they are not motivated so much by products as by services or convenience that deliver to their lifestyle and needs such as Uber.

This is already shaping up to be the next big challenge for retailers.

Take a look at the Gen Me & Gen We whitepaper by WGSN now.

RETAILERS SHOULD NEVER STOP FOCUSSING ON THEIR CUSTOMERS

WORLD RETAIL CONGRESS

5.CHINA LEADS THE WORLDThere could not have been a more powerful symbol of the growing importance of China than the presence of its two titans of retail: Alibaba Group/Tmall and JD.COM. It brought to life the reality that if you want to see the future of retail, look East.

JET JING

Avery BakerPresidentTmall

The future is mobile, the future is in online marketplaces, the future is in AI and robotics and in superfast delivery and it is about stores of the future that blend services, technology and product. These are all being trialled and talked about around the world. But as we heard at the Congress, these aren’t so much as experiments but are already reality in China.

Dan O’Connor from Harvard Business School said there is a new benchmark for speed in this retail world and that is China.

Jet Jing, President of Tmall described this transition as moving from “Made in China” to “Consume in China” as the Government encourages the establishment of a consumer economy - and all that means for a growing appetite for brands from around the world.

But China isn’t just about the huge opportunities that it offers as a market. Why it is so important is that it is quickly developing a new retail model that is unencumbered by legacies of big store portfolios or systems. Chinese retailers led by Alibaba and JD.COM are able to imagine then bring to life a radical approach to retail that is driven by data, fast logistics and a fully connected eco-system.

With entrepreneurs like Richard Liu at JD.COM and Jack Ma at Alibaba they display a willingness to be bold, take risks and to drive constant change. As Richard Liu said: “As retailers, if you stop changing, even for a year, you will lose the game. You have to think about tomorrow every day, we have to make a lot of innovation every day, and never stop.”

THERE IS A NEW BENCHMARK FOR SPEED IN THIS RETAIL WORLD AND THAT IS CHINA

WORLD RETAIL CONGRESS

RICHARD LIUFounder & ChairmanJD.COM

6.UNLEASHING TALENTIf the importance of change, innovation and transformation ran throughout the Congress the biggest discussion was around how this can be implemented. The key factor is that nothing can be implemented without having the right talent on the Board and throughout the business which means diversity in all its definitions.

WORLD RETAIL CONGRESS

Diversity of talent and people is the catalyst for change. That was the clear message across many sessions. Retail is locked in a structure that has existed for generations that is command and control and male-dominated. In a retail world that is being radically transformed by empowered consumers, many of them millennials, retailers need fresh thinking and fresh ideas. If established businesses are ever going to be able to compete culturally with disruptors then the corporate structure needs to change. The Board room needs new job titles and a new way of working that makes decision-making quicker and more open to risk.

As Magnus Brehmer, Market Economist and retail consultant said in his talk on “Where are the Boards?”, the importance is to: “Select the board members both based upon unique competencies, good personalities and networks, age and gender and also a passionate interest for the business you are in”.

In the powerful panel discussion on the importance of gender balance within retail, Veronika Pountcheva, Global Director, Corporate Responsibility at METRO AG said: “The face of our workforce and customers in increasingly defined as young, female and Asian. If this is not reflected somehow in the bodies that make the most important decisions – country or corporate boards – we are going to suffer. We see this notion coming from three sides: governance, customers and investors”.

Many also argued that retailers need to be bold and brave about attracting different kinds of people with new skills and knowledge that are fit for today’s world but which might clash with the old way of working. As Véronique Laury, Group CEO of Kingfisher said: “I’m looking for people with a different point of view, for people that have different experience”.

MAGNUS BREHMER

VERONIKA POUNTCHEVA

Click here to see an exclusive interview from WPP The Store’s exclusive programming at the World Retail Congress. WPP’s David Roth, CEO of EMEA and Asia interviews Véronique Laury, Group CEO of Kingfisher

Market Economist and retail consultant

Global Director, Corporate ResponsibilityMETRO AG

RETAILERS NEED TO BE BOLD AND BRAVE ABOUT ATTRACTING DIFFERENT KINDS OF PEOPLE WITH NEW SKILLS AND KNOWLEDGE THAT ARE FIT FOR TODAY’S WORLD

RETAIL’S RISING STARS The World Retail Congress has always aimed to put retail’s future talent in the spotlight with students from leading retail colleges around the world competing in the annual Future Retail Challenge. This year also saw finalists from the Fashion Scholarship Fund of America join us in Madrid to experience the Congress and to present their winning case studies. We asked some of the students to reflect on what they saw and heard about the global retail industry.“The World Retail Congress in Madrid 2018, was a fantastic opportunity for the ‘Hackney Bathhouse’ team to gain a key insight into the world of retail that so many do not see. We were proud to represent the Fashion Retail Academy here.

Naturally, we were all very interested in the sessions at the Congress as they were all about the Future of Retail.

After attending a wide variety of talks, we believe the key things companies need to implement to gain success is exploring ways to become more sustainable, ethical and transparent. To achieve modern retail, these changes need to be made. People are increasingly concerned about the effects retail has had on the environment and in order to succeed, we need to act on this.

Without the help of fresh, young minds, this task will not be viable. Young participants such as the ‘Hackney Bathhouse’ team and others who took part in the Future Retail Challenge understand the changes retail needs; we are the generation that retail needs to appeal to. If all generations work together, we can achieve something that will appeal to the demands of tomorrow’s consumers and a very successful retail world can be achieved.”

ELLADI HUMPHREYS, ELLIOT INKLEY, JOSHUA WEBSTER and TESHAN APPIAH, The Fashion Retail Academy, London

“It was a really nice experience to attend the World Retail Congress in Madrid. We met so many inspiring people from all over the world.

We also learned a lot at the World Retail Congress. There were many interesting speakers that gave us information about omnichannel, how to target groups of consumers, how to set yourself apart from competition and to think of sustainability and circularity.

We think the future of retail depends on a lot of factors but what we mainly would suggest is to further improve the use of omni-channel, people want access to everything everywhere, this is a key element. The retailers must also focus on sustainability and circularity, the demand for businesses to actively participate in meaningful entrepreneurship keeps growing. Another important thing that is needed for the retailers, is to follow the trends, listen to the customers and respond to them.

But the last and most important strategy is to take risks. The retailers need to feel comfortable with the possibility of failure; the ones who accept this will learn from their mistakes and this will cause the retailers to eventually have their businesses thrive.

MAXIM VAN HOUTE, SANDER VAN EIJCK, SIMON DE GROOT and THOM VAN VREDENDAAL, Avans University of Applied Sciences, the Netherlands

“I was very honoured to join the World Retail Congress this year. It is really a precious experience for a university student to widen their horizon by joining the Future Retail Challenge, attend different talks and meet a lot of different successful retailers during the Congress.

From the Future Retail Challenge, our team’s idea is composed of vertical farming and retailtainment hub as a future concept on an abandoned skyscraper. In this project, not only have my team learnt a lot from this topic on vertical farming, but also we built a good friendship together through this project. At the same time, I also learnt from other teams’ innovative ideas and presentation skills. I really gained a lot from this competition.

The World Retail Congress is a great chance to meet a lot of successful and passionate retailers. Their talks opened up my eyes. They made me know more about the importance of understanding customer behavior and also, the future direction of the retail market, especially technological innovation, e-commerce and sustainability. This was really an extraordinary experience for me which I cannot gain from the classroom. I will never forget it.”

MEGAN KO, The Hong Kong Polytechnic University

WORLD RETAIL CONGRESS

The Fashion Retail Academy

Avans University of Applied Sciences

The Hong Kong Polytechnic University

RETAIL’S RISING STARS WORLD RETAIL CONGRESS

“As the winner of the Fashion Scholarship Fund’s National Merit competition, I was given the unique chance to attend the World Retail Congress international conference in Madrid, Spain.

When the Congress started, the days were jam-packed with rotating sessions of speakers covering a multitude of subjects. The first day was centred on innovation; CEOs of start-ups were invited to speak about digital disruption in the retail industry. I heard a fireside chat with the Jen Rubio, Co-founder of Away, the trendy luggage start-up which brought smart luggage to the market. As a student of the home category, this was a big deal, and I even got the chance to speak with her afterwards! In another session, CEO of Brandless, Tina Sharkey, emphasized the role of authentic community and building trust, and the need to answer customers’ need for quality products at an affordable price. Michelle Feeney, who termed herself a “brand builder,” discussed her newest venture, Floral Street, a hip fragrance brand that focuses on authentic connection, and even features sustainable packaging.

One of my favorite sessions took place on the second day: a workshop led by Moiz Ali, the former Founder of Caskers, and current Founder of direct-to-consumer deodorant brand Native. As an aspiring entrepreneur, I have often wondered how it is that start-ups gain a customer base without a retail presence. Ali broke the process down with clarity and a surprising degree of transparency—I was shocked that he was giving away all his secrets!

The Congress covered more than just disruption with start-ups, but also how established brands are innovating to win. There was a panel that talked about innovation within the luxury field, and the panellists stressed the desire of emotional connection, personalization and discovery as key elements in changing consumer behaviour.

On the final day, I was invited to share my case study presentation along with the three other scholarship winners in a special session on the future of fashion. It was such an incredible opportunity to be able to share my research and ideas on a global platform. When I first started this

competition, I could have never imagined that I would get to fly to Europe and speak alongside industry heavyweights. I am so grateful that scholarships like the National Merit exist for students that want to bring innovation and make meaningful change in the fashion industry.”

CATHERINE CLOCK, Fashion Institute of Technology, New York

“The YMA Fashion Scholarship Fund has sent me on some amazing journeys throughout New York, the United States, and now the world. The World Retail Congress in Madrid was an incredible experience that I was able to not only attend but participate in as a speaker thanks the YMA!

As you can tell there were many speakers and my only wish is that I could have been able to hear from them all. Of the breakout sessions I did attend, my favorite was Introducing your Future Consumer by Carla Buzasi of WGSN. Carla and her colleagues conducted research into Gen Z and explained Gen Z as the group that does not like to be labelled. This generation is very independent and can often be subdivided into Gen We, members of this generation that care deeply about social or political causes, and Gen Me, members of the generation who deeply care about social media connections and have a penchant for selfies. At the end of the presentation Carla revealed trend alerts for gladiator sandals, beauty supplements, animal alternatives, smart mirrors, hiking, and streetwear as formal wear. I found that WGSN’s research rang very true as I am a member of Gen Z myself.

I am forever thankful to the YMA Fashion Scholarship Fund for changing my life and

opening the doors to the world of retail for me. Thanks to this organization I have friends across the nation, I was able to secure a summer internship in New York, and I have a lifelong community of retail enthusiasts. Thank you YMA!”

KATHERINE KYKTA, the University of Texas, Austin

“Attending the 2018 World Retail Congress was a complete whirl-wind experience. Although intimidated, I was extremely excited because, as a college undergraduate, this Congress was an opportunity of a life time.

Leading up to our case study presentations at the World Retail Congress I got to create extraordinary connections with industry leaders that I otherwise would not have had an opportunity to network with. It has opened doors for me that I didn’t even know existed. There was something very beautiful and inspiring seeing a gathering of so many different cultures, ethnicities, languages, and countries coming together for one unifying goal. This world of retail is a powerful and influential one that I am excited to not only already to be a part of, but also to grow with throughout my career. I have many hopes of a positive and impactful future the world of retail has on the globe and I am excited to dedicate my future to it. I thank YMA Fashion Scholarship Fund immensely for giving me this opportunity that has given me not only the tools to succeed in this industry and the confidence to believe in myself and my ideas.”

MARYAM SHEHATA, University of California

Fashion Institute of Technology

University of Texas

University of California

WORLD RETAIL CONGRESS 2019Join us for our annual global gathering of the retail industry as the Congress moves to Amsterdam on 13-16 May 2019.

13-16 MA

Y 2019 AMSTERDAM

Experience three unforgettable days of retail ideas, innovation and inspiration – learn from the giants, the disruptors and the gamechangers of the industry.Get involved today by contacting us at book_enquiry@worldretailcongress.com or for partnership enquiries, please contact Beth Pedersen at Beth.Pedersen@worldretailcongress.com

WORLD RETAIL CONGRESS WHERE IDEAS GO GLOBAL