Rich Honiball is the EVP and Global Chief Merchandising & Marketing Officer for NEXCOM (Navy Exchange Service Command). He joins Natalie on the podcast to discuss:
The unique role of military retail, the importance of having a clear mission, and other lessons for traditional retailers.
Learnings from the launch of the world’s first Toys R Us department on a military base.
Self-checkouts, frictionless experiences, and the importance of customer choice.
The power of community and how Gen Z shoppers are redefining store experiences.
Why retail was an “accidental career” for Rich and how he hopes to encourage the next generation of retail leaders in his role as adjunct instructor at George Mason University.
Since its inception in 1946, NEXCOM’s mission has been to provide customers with quality goods and services at a savings and to support Navy quality of life programs.
NEXCOM’s six primary business lines include the Navy Exchange (NEX), NEXCOM Hospitality Group, Ships Store Program, Uniform Program Management Office, Navy Clothing and Textile Research Facility and the Telecommunications Program Office. Each of its business lines provide the necessary support for the Navy’s warfighters and military families to remain ready and resilient.
Bio:
Rich Honiball combines executive leadership, strategic development, and consumer insights as EVP, Global Chief Merchandising & Marketing Officer for NEXCOM, overseeing merchandising and marketing efforts for a $2+ billion global enterprise offering retail, services, food & hospitality. Before NEXCOM, Rich founded PDB Advisory Group & the Brand(Co)Lab, advising CEOs on purpose-driven marketing strategies and brand development. His executive roles at Haggar and JCPenney involved building world-class teams, strategic development, brand growth, and corporate refresh initiatives. He shares his extensive retail and consumer behavior expertise as an adjunct instructor at George Mason University. Rich is an MBA graduate from William & Mary and a BS in Marketing from SNHU. Rich is dedicated to mentoring and has served on several educational and nonprofit boards. Rich is honored for his retail expertise by Rethink Retail, innovative marketing by the CMO Club, and as an ONCON ICON Top 100 Marketer, and he continues to influence the industry while traveling the world.
Find out more about the Retail Disrupted Podcast by visiting retaildisrupted.com
Retail Disrupted
What Retailers Can Learn From the Navy Exchange
byNatalie Berg
Rich Honiball is the EVP and Global Chief Merchandising & Marketing Officer for NEXCOM (Navy Exchange Service Command). He joins Natalie on the podcast to discuss:
The unique role of military retail, the importance of having a clear mission, and other lessons for traditional retailers.
Learnings from the launch of the world’s first Toys R Us department on a military base.
Self-checkouts, frictionless experiences, and the importance of customer choice.
The power of community and how Gen Z shoppers are redefining store experiences.
Why retail was an “accidental career” for Rich and how he hopes to encourage the next generation of retail leaders in his role as adjunct instructor at George Mason University.
Since its inception in 1946, NEXCOM’s mission has been to provide customers with quality goods and services at a savings and to support Navy quality of life programs.
NEXCOM’s six primary business lines include the Navy Exchange (NEX), NEXCOM Hospitality Group, Ships Store Program, Uniform Program Management Office, Navy Clothing and Textile Research Facility and the Telecommunications Program Office. Each of its business lines provide the necessary support for the Navy’s warfighters and military families to remain ready and resilient.
Bio:
Rich Honiball combines executive leadership, strategic development, and consumer insights as EVP, Global Chief Merchandising & Marketing Officer for NEXCOM, overseeing merchandising and marketing efforts for a $2+ billion global enterprise offering retail, services, food & hospitality. Before NEXCOM, Rich founded PDB Advisory Group & the Brand(Co)Lab, advising CEOs on purpose-driven marketing strategies and brand development. His executive roles at Haggar and JCPenney involved building world-class teams, strategic development, brand growth, and corporate refresh initiatives. He shares his extensive retail and consumer behavior expertise as an adjunct instructor at George Mason University. Rich is an MBA graduate from William & Mary and a BS in Marketing from SNHU. Rich is dedicated to mentoring and has served on several educational and nonprofit boards. Rich is honored for his retail expertise by Rethink Retail, innovative marketing by the CMO Club, and as an ONCON ICON Top 100 Marketer, and he continues to influence the industry while traveling the world.
What do you call a retailer with a relentless drive to enhance the customer experience? This may sound like the start of a geeky retail joke but it’s a serious question. We used to brand these more nimble businesses as “disruptors”. They were the ones ripping up the rulebook, defying the status quo and continuously elevating the shopper experience.
Today, I’d argue that all retailers need to adopt a mentality of perpetual disruption. In the fast-moving world of retail, today’s innovations quickly become tomorrow’s norms. You’ve got to keep evolving and experimenting. Failing fast has become a prerequisite.
This was evidenced in a new study from Manhattan Associates. The inaugural Unified Commerce Benchmark for Specialty Retail in Europe assessed 50 retailers across three verticals (apparel and footwear, home and DIY, luxury) in five European markets (France, Germany, Italy, UK, the Netherlands).
Retailers were categorised as Leaders, Challengers, Followers and Laggards. The study then revealed common attributes of successful retailers across four categories: Search and Discovery; Cart and Checkout; Promising and Fulfilment; Service and Support. So what have we learned?
Firstly, the study called out four participating retailers as true leaders in Unified Commerce: Adidas, H&M, Leroy Merlin and M&S. These businesses aren’t just ticking boxes by offering capabilities such as real-time inventory statistics and product recommendation tools; they are actively embracing technologies that enable them to deliver more nuanced, and increasingly personalised, customer experiences.
And it’s paying off. The study found that Unified Commerce leaders’ revenue growth outperforms non-leaders by at least twofold.
Guided Inspiration, Rich Findability and Immersive StoryTelling
Leaders in ‘Search and Discovery’ help shoppers discover meaningful products, whether they are looking to fulfil an immediate need or are looking for inspiration. Most leaders in this space already bundle product offerings (offer suggestions to ‘buy the look’ or ‘buy the set’), and I imagine this will become the norm in the very near future as more retailers embrace the power of AI.
There is always room for improvement and Manhattan specifically calls out capabilities like offering real-time visibility on product description pages (PDP), inventory status callouts for low/out-of-stock items, and personalised recommendations on home page. Retailers should also strive for greater visibility of delivery times, for example by allowing shoppers to filter by fulfilment method.
Most leaders offer back-in-stock notifications and 100% of them provide product sourcing information and detailed content on sustainability practices. This is an important point – retailers must go beyond product features and really immerse the shopper in the brand’s ethos. Transparency is going to be key going forward.
The biggest point of friction in today’s retail customer experience is due to the loss of context when transiting between the physical and the digital. Those retailers leading the way in ‘Cart and Checkout’ understand that a unified cart or basket is a foundational capability when it comes to that all-important connection across channels: 40% of leaders show personalised promotions and offers on PDPs and cart, compared to 6% of non-leaders. Most leaders also allow shoppers to view promo codes in cart and check product availability status by store in cart.
Given the proliferation of payment options today, most leaders also offer checkout with buy now, pay later (100%), Apple Pay or PayPal (70%), as well as the ability to use mixed payment methods for the same order (40%).
In-store and online cart abandonment is still far too regular of an occurrence in retail. In fact, more than one-third (35%) of shoppers said that they abandon their shopping cart because of lengthy checkout process and a whopping 37% said they will not retry if asked to re-enter payment or delivery details. It’s essential that retailers provide seamless checkout experiences that reduce unnecessary friction at the point of conversion.
Flawless Fulfilment
I’ve often said that the post-purchase experience tends to be more of an afterthought than a strategic priority. Well, that is finally changing as retailers recognise that a shopper’s product pick-up or delivery experience must be as seamless as their shopping journey. Not only do leaders in ‘Promising and Fulfilment’ make sure retailers meet or beat their delivery promises consistently, they do also so while being more environmentally friendly too.
Offering shoppers greater post-order flexibility, including complete or partial cancellations, and greater delivery/pick-up options are all areas leaders excel in. Sixty percent of leaders offer shoppers the ability to cancel orders post-purchase compared to 28% of non-leaders.
And shoppers are crying out for this: more than two-thirds of shoppers want a self-service option to be able to edit order after placing them. Meanwhile, nearly three quarters (73%) of shoppers value expedited deliver (same business day) but are only willing to pay less than €5 for the service.
Manhattan calls out the ability to highlight the carbon footprint / impact of fulfilment choice as an area for improvement. Shoppers are hyper-informed when it comes to pricing and product information, but too often they are fumbling in the dark when it comes to sustainability. I believe this will change considerably over the next decade and retailers must prioritise transparency to drive greener purchasing decisions.
360 Degree Service
Leaders in the ‘Service and Support’ segment offer shoppers a wide variety of service options from call centres to in-store assistance, social media support and live agents available via their website and mobile app. What is most important, however, isn’t the breadth of support options but the fact that they offer seamless continuity, consistent quality and always-on availability.
Leaders empower shoppers to self-serve most of their needs. Nearly all (92%) offer support on order modifications, returns and exchanges via chat/call and 75% offer their customers the ability to return purchases to drop-off locations.
In addition to problem solving, leaders also offer value-added services such as customisations, style/fit guidance and in-store hospitality to turn service interactions into a secret sauce of brand stickiness. Most leaders empower their store associates to check a shopper’s online purchase history while in-store (75% compared to 48% of non-leaders). They should also be striving for in-store appointment scheduling via their digital channels, product personalisation and allowing store associates to create or manage a shopper’s wishlist.
As I have said on numerous occasions, we are witnessing a democratisation of white-glove service within the retail industry. Don’t get left behind.
It was wonderful to sit down with Mark Thomson to talk through the findings of the 15th Annual Global Shopper Study from Zebra Technologies.
Here’s what stood out for me:
💵 While nearly 75% of shoppers say inflation has caused them to delay purchases, they’re still returning to stores but most (76%) want to get in and out as quickly as possible.
😯 3 in 4 shoppers leave without the items they intended to purchase, with 49% blaming out-of-stocks.
📶 More than two-thirds of associates are concerned that shoppers are more connected to information than they are.
🙂 Seven-in-10 shoppers are satisfied with help from retail associates, compared to only 37% in 2007.
📱 Pandemic habits are sticking: approximately 90% of shoppers said they are likely to continue using technologies such as a personal shopping device, mobile cashless payment and self-checkout. And retailers are responding: nearly HALF of retailers said they would convert more manned till space to self-checkout in the future.
Imagine a world where shoppers can walk into a clothing store, scan the price tag on a dress, and complete payment on the spot. Imagine a world where virtual stylists allow shoppers to seamlessly pay by link, or a world where instore shoppers collecting their online orders aren’t just handed a package but are greeted with personalised recommendations to complement their purchase.
This world isn’t so far off, according to Manhattan Associates Solutions Executive Joe Kamara. “We’ve built a unified platform that brings the best of traditional Point of Sale (POS), order management and store operations together so you can orchestrate these different flows.”
In conversation with Natalie Berg, Retail Analyst and Founder of NBK Retail, Kamara said that the next generation POS is being accelerated by the pandemic-driven shift to digital. While in crisis mode last year, retailers quickly pivoted to ensure that stores could continue serving customers via click & collect and kerbside pickup, while simultaneously processing online returns instore. Kamara believes that this behaviour will outlast the pandemic, reinforcing the need for retailers to ensure they are equipped with the right tools to seamlessly serve the customer across multiple touchpoints.
Considering POS as part of the customer experience journey
For many retailers around the globe, this is becoming basic hygiene. Even in the years leading up to the pandemic, the role of POS was being drastically redefined as the industry adapted for the digital era.
Pre-purchase – traditionally, retailers took a store-only view of the customer and the sharing of data and shopper preferences across channels was limited. Today, there is an enterprise view of the customer, and retailers have full visibility into purchase history as well as sharing of digital data.
Purchase– when it came to out-of-stocks, the experience used to be “filled with roadblocks and friction”, according to Kamara. Today, however, thanks to retailers’ endless aisle capabilities, shoppers can make a single purchase for items that are available both in and out of the store.
Post-purchase – it’s difficult to cast our minds back to a time when stores would not accept online returns, given the ease and proliferation of choice today when it comes to returning goods purchased online.
The industry has come a long way to meet the needs of the 21st century shopper who wants to shop on their terms, irrespective of device or channel used. But, as we witness a post-pandemic acceleration in the convergence of physical and digital retail, it’s imperative that retailers continue to move the dial, removing any remaining friction points from the instore experience. This is no time for complacency.
For example, if we go back to the perennial problem of out-of-stocks, it’s hard to believe that even in this day and age, only a small minority of retailers are capable of offering in-store purchasing from another store’s inventory. From a customer experience perspective, this feels entirely unacceptable given the industry’s broader efforts to digitize the physical store. Not only do retailers risk losing the sale but it can be detrimental to brand loyalty in the long-term too.
In order to meet customers’ supercharged expectations, retailers must adopt a sell/fulfil/engage anywhere mentality. However, when it comes to future-ready POS implementation, retailers often make three common mistakes, according to Kamara:
Adopting a store-only plan, damaging future agility
Minimal investment in change (e.g. limited budget for user training; limited project communication plan)
Selecting a “proven” vendor with old technology
All too often, retail organisations are still thinking in silos. Instead, Kamara recommends that retailers develop a unified commerce roadmap (POS + order management), make a clear plan for organisational change and select the right vendor capable of delivering on the long-term.
You can find out more about Manhattan Associates’ POS solutions here.
Big media day yesterday covering the news that Amazon has debuted its checkout-free store concept in London.
This is watershed moment for U.K. retail. Amazon is known for disrupting the status quo, raising customer expectations and forcing competitors to raise their game. Remember Amazon is a tech company first, retailer second. The big question is – does Amazon really want to become Britain’s biggest supermarket or perhaps it’s more lucrative to license this tech to… everyone else? Either way, Amazon transformed the checkout experience online and will now do the same in-store. Goodbye, friction!
We all know it’s only a matter of time beforeAmazon Go reaches UK shores. Trademarks have long been registered, the rumours have been flying and, havingdebuted in New York Citylast month, it’s fair to say that Amazon has an appetite for urban expansion.
This explainsSainsbury’s recent scramble to open the first till-free store in the UK, a PR coup ahead ofAmazon’s inevitable incursion.
And they’re not alone – pretty much every grocer from Tesco to Marks & Spencer is trialling scan-and-go technology, self-ordering kiosks are now the norm at McDonald’s and Argosquietly launched its first self-service digital store last month. Time is the new currency.
Checkout-free shopping will particularly cater to busy city workers on their lunch break and it will undoubtedly hit travel retail hard – till-free will become the norm in airports and train stations five years from now. But is this really the future of retail?
The customer experience is paramount, but today ‘frictionless’ often translates as ‘soulless’. Most shoppersstill value human interaction in-storeand, as we’ve witnessed with self-checkout, there will be resistance among some shoppers to do the heavy lifting themselves.
Source: Sainsburys
Take the new Sainsbury’s trial, for example: for a store that’s all about reducing friction, there’s certainly a lot of it initially as shoppers have to download the app and get used to scanning QR codes.
Let’s not forget that, a few years ago,Morrisonsscaled back its self-checkout ambitions in response to customer feedback. There has been a lot of hype about automation, but when it comes to responding to disruption, retailers must not lose the human touch.
Defending cash
Checkout-free stores can be controversial. Not only because they will accelerate the number of retail job losses (according to the Office for National Statistics, 25% of supermarket checkout jobs disappeared between 2011 and 2017), but also because going cashless can be seen as discriminatory towards customers without bank accounts or smartphones.
This summer, Philadelphia will be the first US city to prohibit cashless stores, and a growing number of cities are considering a similar ban. Amazon has had little choice but to begrudgingly adapt, and its shiny new Manhattan store is the first Go branch to accept cash.
Lastly, we must acknowledge the elephant in the room: theft. Today, it feels unnatural to bypass the checkout, and Amazon says it takes customers several visits before they no longer feel like they’re shoplifting.
But theft is a genuine concern and was one of the reasons Walmart shelved its scan-and-go programme in the US last year, with a former executive joking that the scheme should have been simply called “‘go’ because the customers can’t seem to ‘scan’ anything”.
The biggest retailer in the world is now embracing a mobile point-of-sale solution. Equipping more staff with handheld devices so shoppers can pay on the spot is a solid compromise – you still provide a frictionless checkout experience while taking the onus off the customer and alleviating concerns over shrinkage.
I don’t doubt that the digital store is the future of retail or that checkout-free shopping will appeal to certain customers and shopping missions. But consumer adoption will be slow, and they will never replace manned checkouts entirely, which is why the hysteria over till-free stores is unwarranted.
Automation is coming but, in the process, retailers must ensure they don’t kill the experience they are working so hard to improve.
I’m so excited to launch, in partnership with retail technology leader Red Ant, the first of a three-part series of whitepapers to explore how the retail industry will have to embrace the digital store and seamless shopping to survive, from frictionless checkout to hyper-personalisation and clienteling. There’s no doubt that the industry has undergone seismic change in the last few years, and it’s not over yet.
Why the
store is not dead
Over the past decade, we’ve witnessed the birth of the
‘on-my-terms’ shopper and the seemingly unstoppable rise of e-commerce. Today’s
ubiquitously connected shoppers are firmly in the driving seat, and retailers
are scrambling to keep up with dramatic shifts in both customer behaviour and
expectations.
It’s clear that not all retailers have been equipped to deal with
the accelerated pace of change facing the industry. As such, we’ve seen
high-profile casualties on the high street as well as record numbers of job
losses and store closures. And we should be bracing ourselves for more short-term
pain as the industry reconfigures for the digital age. Although it’s not quite
a retail apocalypse, there are a couple of important points that we must
acknowledge:
We have an oversupply of retail space. According to the Office for National Statistics, online sales accounted for less than 5% of UK retail sales in 2009. Fast forward to 2019 – a whopping 20% of retail sales now take place online. Although e-commerce shouldn’t be viewed as the death knell for the high street, retailers must streamline their store portfolios to better reflect consumer demand. The future is fewer, more impactful stores.
There is no room for mediocre retail. In today’s climate, you have to be on top of your game. The retailers that are struggling right now share some common traits – they lack agility, differentiation, relevance. They try to be all things to all people. They don’t have a compelling purpose. And having an iconic brand doesn’t make you immune to the broader challenges facing the high street. This is retail Darwinisim – put simply, you evolve or die. But, for those brands willing to adapt, this is a fantastically exciting time to be in retail.
Stores will undoubtedly continue to play a critical role in retail
for decades to come, but, in a nutshell, customers will expect to shop on their terms, not the terms dictated to
them by the retailer. This means that high street retailers need to ensure
they’re saving customers’ time or enhancing it. There is no longer a middle
ground. We believe that stores of the future will be:
Frictionless
– to keep up with online retail
Experiential
– to distance themselves from online
retail
Ahub for fulfilment – to bridge the gap between online and
offline worlds
Those retailers who use the right
digital platform to transform and tailor in-store experiences will be able to
ensure differentiation from rivals and relevance to customers.
