Retail Reborn

The Department Store shaped America. As a new type of building in which to trade clothing, home appliances, and a variety of other goods it penetrated American life and changed its course. There are a few notable examples in Europe; think of La Samaritaine and Le Bon Marché in Paris, two very prominent examples that changed the retail business in France, or the Schocken Department Store in Germany. But it is only in the US where this model of retailing changed life for good. It changed entire cities, their history and architecture. It changed people’s needs and wants. It became the cornerstone of new urban settlements and the center of social life. And while it spurred American consumerism, it also ignited manufacturing, entrepreneurship, and financial savvy all of which have defined American identity for at least the last one hundred and fifty years.

The decision to invite Michael Gould, Chairman and CEO, Bloomingdale’s to deliver one of the two keynote addresses at Columbia’s Business School Fifth Annual Retail & Luxury Goods Conference was truly enlightened.  The conference took place on February 4, 2011 at the Low Memorial Library, Columbia University in New York.  Aniza Shah (’11) and Derrick Chan (’11) hit the right note with that decision and also put a most interesting program in place for their audience.  They also echoed a similar decision the NYU Stern Luxury Retail Conference Committee made a little over three months ago (http://thomaiserdari.blogspot.com/2010/10/c-suite-retail-spotlight.html) when they invited Lord & Taylor CEO Brendan Hoffman to be the keynote speaker.

This means that student committees know how to read the pulse of the market and put together programs that many a professional organization would envy. It also means that New York City is blessed with two wonderful institutions, each one with its own character and approach to student life but both with a very rigorous business curriculum. These two schools have traditionally staffed executive positions both in the Garment District but also in the great department stores that dot the city’s grid. It seems that these two schools are also producing the executives for several retail and luxury brands that have already expanded their businesses oversees—and wisely so, as Rick Darling, President, Li & Fung, USA pointed out in his keynote address, later that afternoon. (http://www0.gsb.columbia.edu/students/organizations/retail/conference.html)

It is not easy to summarize the speakers’ main arguments in one entry only. But the same points kept returning in both key speeches: staff training and development and brand development strategy. The former raises questions of leadership (should it be top-down? Or should one lead and manage from behind? How does one reach out to recruit?). The latter is the outcome of two important events: a. manufacturing has very little future domestically (within the US) and is rapidly developing in new hubs in Asia (Central China, Thailand, Bangladesh for example); b. the size of the American market is not enough in itself for brands to maintain their competitive advantage. It may have rendered a variety of brands complacent because the opportunity to record substantial revenues within a consumerist society of the size of this country has always been present. However, today, when new economies are emerging and grow to consume, a brand’s viability and its competitiveness are proven on an international level. For this to be successful, brands need to study and understand their new markets rather than rely on outdated models supplied by the saturated by now American reality.

These are tough points to digest but Profs. Ketty Maisonrouge and Mark A. Cohen who moderated the panel discussions had planned a series of thought-provoking questions that allowed the panelists to express a variety of perspectives across brand levels (from mass-market to upmost luxury). It did not hurt that the audience (mostly Columbia students but young professionals as well) was particularly sophisticated and added to the discussion with pertinent, and rather challenging questions. I will make sure to return to a few of the most novel ideas that were presented last Friday in subsequent entries. Certainly, I am looking forward to the Sixth Annual Retail Conference of 2012.