Note: Kevin Roche was a featured speaker at The Robin Report Columbia Business School Annual Forum, Thriving in a Digital Economy, held on campus in early August.
As a designer and architect with over 45 years in retail planning and design working across three continents, my entire career has been dedicated to the retail experience. I believe design must have a seat at the board room table; design must be woven into everything you do. Design is way of thinking and a core strategic capability of the successful corporations today. Think Porsche, Apple, Hermes, Nessespro, Starbucks, LVMH Brands, Four Seasons and Mercedes Benz.
Design is a critically valuable resource, we have the CEO, CFO, CMO, CIO, Chief Merchants and HR Executives- where is the Chief Design Officer?
Many consultants, advisors, marketers, designers and architectures all write and speak at conferences and say more or less much of the same thing about the future of brick-and-mortar retailing. But the truth is, in the end, it takes visionary and inspired leadership with a long-term commitment to realize a dream, create a vision and break away from the pack to invent new or to reinvent existing retail businesses.
Do You Matter?
The key questions you need to constantly ask are: Do you matter? And how do you matter?
In terms of retail, iconic marques including Porsche, Hermes, LVMH brands, Four Seasons Resorts, Nespresso, Selfridges and Le Bon Marche all value and invest in creativity and innovation, which is embedded in their DNA.
It requires long-term patience to invest in a vision, belief and creativity. Phil Knight, Howard Schultz, Steve Jobs, Bernard Arnault, Jeff Bezos — all follow this creed. True innovation is not focused on scaling for the sake of scale; to save on expenses, reduce staff costs, editing the in-store experience to deliver the highest margin categories, and closing the food markets, restaurants, children’s offers and services — all for the sake of scale and squeezing expense out the balance sheet.
Leadership must focus on the “why you matter” question operating in a world where everything is available from your mobile with the assumption that there will always a better price. Let’s face it, retail is a business that sells stuff that no one really needs. Retailers must go beyond the transactional, operational metrics and mentality to define why they matter. The crucible of today’s successful retail leadership is composed of courage, risk, vision, talent and passion. Successful leaders break some eggs and step away from sacred cows. They have the willingness to ask, “Why Not!” Today’s environment demands you have a clear and brutally honest awareness on what you stand for and how you matter. And your belief system requires the commitment to act upon those convictions!
The Past as Prelude
In the beginning, the great Grand Dame department stores were one of a kind. They were deeply socially relevant to the communities they served. There was uniqueness, curated with iconic content. These founders ensured their brands were always evolving and remained relevant as a non-negotiable core value. These iconic buildings by their very nature were a “sense of place;” they were “one-of-a-kind” by design. By design was the matrix that created these relevant retail business, not growth by the balance sheet. They grew and were successful by creation, innovation and newness verses squeezing expense, consolidation, and scale-based greed.
How do you become the most sought-after, iconic destination in the world? The best in the retail business are sought-after destinations by the leading iconic cities of the world, landlords and developers, emerging brands – and most importantly by the consumer.
Traditional retailers continue to talk down to their customers. Most in the hospitality sector are talking up to their guests. Are you a love brand? Customers swear by love brands: I love the Four Seasons; I love Porsche; I love Amazon; I love Apple; I love my Hermes bag. Do I love Macys? Neman Marcus? One of the most exciting retail destinations is so good and so loved that it has historically been able to charge admission: Disney.
Most of my recent work has been outside of the U.S. where retail leaders understand and appreciate the power of design. The impact of investing £200m in Harrods or £300m in Selfridges makes a difference when you’ve only got one or two stores. However, when you’ve got 55 stores like Bloomingdales, 641 stores like Macy’s, 156 like Saks or 860 stores like JCPenney, making a difference can be expensive, complex and slow. Perhaps it’s too late to save old-world chain stores. It’s going to take a radical shift to transform them. The PricewaterhouseCoopers report, Global Consumer Insights Survey 2019, states it’s time to introduce another metric, one with a focus on consumer experience. “Because consumers today are so discerning and powerful, it’s their perspective that most organizations need to invest far more in customer experience (CX). Measuring return on experience (ROX) will help understand earnings on investments in the parts of your company directly related to how people interact with your brand.”
The same repetitive retail offer without a continuous cycle of investment in innovation and evolution produces a toxic creeping sameness. Investment in design that matters changes the formula. Good design is making something intelligible and memorable. Great design is making something memorable and meaningful. When design is memorable and meaningful, an experience is realized.
The act of designing is an inherently powerful act. Design can galvanize places, communications and content towards a greater value for the consumer. It adds economic, relevance, emotional, social and aesthetic value. Successful corporate design today leverages and seamlessly integrates all the business disciplines to innovate and differentiate a meaningful consumer experience. I urge American retailers to become catalysts for innovation, new growth opportunities as a path to differentiation.