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Retailers Push Brick-and-Mortar Innovation, Expansion at National Conference

NRF’s Annual Gathering in New York Discusses Drone Deliveries and Store Openings
The National Retail Federation convention is held annually at the Javits Center in Manhattan. (National Retail Federation)
The National Retail Federation convention is held annually at the Javits Center in Manhattan. (National Retail Federation)
CoStar News
January 16, 2024 | 5:36 P.M.

Retail industry professionals from around the world gathered in New York this week for one of the largest conferences the group's major trade organization has ever conducted.

The National Retail Federation, based in Washington, D.C., embarked on its three-day "NRF 2024: Retail's Big Show" at the Javits Center in Manhattan on Sunday. The annual event attracts about 40,000 attendees representing more than 6,200 brands from over 100 countries. This year featured more than 1,000 exhibitors and 150 sessions, which focused on technology, innovation, supply-chain issues and forecasts for the year ahead.

NRF Chairman and Walmart U.S. President and CEO John Furner conducted interviews at several sessions. Here's a roundup of some of the happenings:

Jeans Giant Eyes More Stores

Michelle Gass made her first public appearance as the head of Levi Strauss & Co. on Sunday, and emphasized that the iconic 170-year-old company not only makes denim jeans, it's a retailer that sells them in its own stores. And she wants to expand those locations.

It was kind of a coming-out party for Gass, who announced she was leaving the department store chain Kohl's in November 2022 to join San Francisco-based Levi, starting as its president a year ago. She said she's spent the past year working with Levi CEO Chip Bergh for a transition in advance of his retirement. She officially succeeds him on Jan. 29.

Michelle Gass, formerly of Kohl's, spoke about her new roles as president — and soon CEO — of Levi Strauss & Co. National Retail Federation President and CEO Matthew Shay interviewed her. (National Retail Federation)

Both Gass and another Levi Strauss executive, Chief Financial and Growth Officer Harmit Singh, during a separate panel Sunday, said that while the company is a denim-clothing wholesaler to customers such as Macy's, it's also working to offer more of its apparel directly to consumers via its own stores. The company needs to better leverage its brand in the retail arena, Gass said.

Levi Strauss has more than 3,000 stores globally, with about 2,000 of them franchises and roughly 1,100 that are owned and operated by the brand, according to Singh.

"It's a less-known fact about Levi," Singh said. "We're opening over a hundred [stores] a year. ... We are spending a lot of capital opening stores."

During her NRF session, Gass said. "We see a long roadway in store growth."

In the U.S. alone, Levi Strauss has what Gass described as "more than 70 main-line stores" and is building more, seeing that as an opportunity domestically and internationally.

Levi officials went heavy on the denim at the conference. Gass gave her interviewer, NRF President and CEO Matthew Shay, a denim jacket with "NRF" emblazoned on it, which he wore when he interviewed her. Gass herself donned a long denim skirt, and Singh was sporting a denim suit.

New York Innovation Focus

Some retailers in New York were showcased for innovation in a session at the conference. Officials from Accenture, the global consulting company, curated and commented on their innovations, which included several luxury automakers. Many of these brick-and-mortar locations offer shoppers an experience, as in experiential retail.

Rivian, an electric vehicle maker, opened its new retail concept, Spaces, under the High Line in Manhattan and in Brooklyn's Williamsburg neighborhood. The showrooms invite families — as well as their pets — "to get up close and personal" and have fun checking out the trucks, essentially acknowledging that car buying is often a collective decision.

Rivian has decided to continue to extend the concept in other parts of North America, including Vancouver, Atlanta, Nashville, Denver, Seattle, and cities in California, according to Accenture.

Petco's new flagship in Union Square in Manhattan was cited for innovation. (Petco)

British automaker Aston Martin last summer recently debuted an ultra-luxury flagship store in Midtown Manhattan called Q New York, where customers can configure and visualize their personalized version of the vehicle on a 35-by-10-foot screen, using samples of interior features like seating and console covering to create their own design, according to Accenture.

The company's list of retail innovators also includes:

  • Manhattan's first Wegmans grocery store, which opened in October at Astor Place, provides shoppers with a food hall offering ready-to-eat meals. An on-site dining room with a sushi bar, oyster bar and champagne bar is scheduled to open in the coming months, according to Accenture.
  • Apparel seller Reformation has a new high-tech flagship that it opened in Soho in Manhattan this summer. There is only one of each item on display, and screens around the store let shoppers pick which merchandise they're interested in. Clothing is brought into their fitting room in their size, and customers can use a touch screen to request a different size or the item in a different color.
  • Petco debuted a flagship store in Manhattan's Union Square this summer, which includes a curated collection of premium goods for pets, a full-service veterinary hospital; "Ruff's Barker Shop," inspired by classic barbershops, which is a salon for dogs to get premium grooming services; and a shop where pets can try on apparel.

Drone-Delivered Ice Cream

Walmart offered the U.S. retail industry some additional color and details on its drone-delivery service, which it is dramatically expanding in the Dallas-Fort Worth market, on Monday.

Prathibha Rajashekhar, senior vice president for innovation and automation for Walmart U.S., and Adam Woodworth, CEO of Wing, a subsidiary of Google parent Alphabet, said drone delivery is not a fad but quite pragmatic. Walmart and Wing have partnered on the delivery of goods by drone, an initiative that started as a trial in Frisco and Lewisville in Texas.

Adam Woodworth, CEO of Wing, left, and Prathibha Rajashekhar, senior vice president for innovation and automation for Walmart U.S., discuss drone delivery at the NRF conference. (Linda Moss/CoStar)

Walmart will be able to reach 75% of the metropolitan Dallas-Fort Worth population by expanding its drone service, according to Rajashekhar. “What started as a novelty has become a solution for real needs,” she said.

For example, if a Walmart customer forgot an ingredient for a recipe, they can have it quickly delivered by drone, Rajashekhar said. Others have ordered spur-of-the-moment snacks like a pint of ice cream, or energy drinks such as Red Bull.

“I've heard from customers where we've delivered rotisserie chicken that getting a rotisserie chicken from a drone is a better experience because the rotisserie chicken is delivered so fast, it's still hot,” Rajashekhar said. “It doesn't get cold. So it's not just about immediacy, but also the quality.”

A parent at home with a sick child can order liquid Tylenol by drone without leaving the house, Woodworth said. One customer had hot dogs delivered for an impromptu backyard barbecue.

Lure of Family Business

Edward Stack, executive chairman of Dick's Sporting Goods, never planned to go into the family business. On Monday, Stack told Shay that his father — Dick Stack, who opened the first store using $300 that a relative gave him from her cookie jar — made him do duty at that fledgling shop when he was a young teen.

Edward Stack, executive chairman of Dick's Sporting Goods, took a tough stance on gun sales. (National Retail Federation)

“He put me to work when I was 13 years old because he was going to teach me responsibility. … I hated every minute of it,” Stack said. “I never wanted to come back into the family business."

But Stack later had a change of heart and bought the company from his dad in 1984, gradually building it into an 800-store chain. That doesn't mean the road to success was easy. Dick's almost went out of business twice, in 1987 and 1995, in part after expanding too quickly, according to Stack. “I made some really bad decisions, some stupid decisions to think we could grow as fast as we did,” he said.

Stack, who received the NRF's Visionary Award this week, doesn't regret one criticized decision he made: for Dick's to stop selling assault-style weapons, and later restricting other weapons sales, in the wake of the Sandy Hill and Parkland, Florida, mass murders.

“We knew that there was going be some real blowback for that, and there was … [but] we needed to stand up to say something,” Stack said.

Candy Giant Touts Pet-Vet Businesses

Mars Confectionary — the owner of global powerhouse candy and snack brands such as M&Ms, Milky Way, Snickers and Skittles — is more than just that, Anton Vincent, president of Newark, New Jersey-based Mars Wrigley North America, said Sunday.

"You know us as the largest confectionery company in the world, (but) we're also the largest pet-care company in the world, everything from animal nutrition to an entire animal healthcare system that includes diagnostics and veterinary health services," Vincent said.

B.J.'s Wholesale Club CEO Bob Eddy, middle, and Anton Vincent, president of Mars Wrigley North America, were interviewed by Hope King of Axios on Sunday. (National Retail Federation)

A slide then displayed Mars's portfolio of brands, which has brick-and-mortar chains. Those include VCA Animal Hospitals as well as Banfield Pet Hospital, which are located within Petco stores. Mars also owns the Royal Canin pet food line.

Vincent was part of a panel that included one of his customers, B.J.'s Wholesale Club, represented by Chairman and CEO Bob Eddy.

B.J.'s, which now has about 242 stores, opens about 10 new ones a year, Eddy said. It has been expanding into the Midwest and Southeast, and last week opened a location in Madison, Alabama, according to Eddy. A store is slated to open next week in Johnson City, New York, he said.

Getting the Champagne Treatment

Luxury liquors and wines need to be sold and presented in stores similar to their counterparts in the high-end fashion and jewelry categories, according to Moët Hennessy CEO Philippe Schaus.

Schaus made the case Sunday that upscale and pricey liquor brands such as his Moët & Chandon champagne need a more elevated treatment in brick-and-mortar retail, and that his company has been experimenting and trying to do that. Essentially, Moët Hennessy is trying to take a page out of the book of Paris-based luxury-good conglomerate LVMH, parent of brands such as Louis Vuitton, Tiffany & Co., Christian Dior, Fendi, Givenchy and Marc Jacobs.

Schaus said that Americans planning to buy their tequila, wine or other spirits "probably have in mind a place where there are bottles on a shelf" — and that's not a setting where one would expect to buy a luxury product. It's not a location or point of sale that's anything close to typical luxury retail, which aims to convey the quality and value of an upscale brand, he said.

"And that's what we are trying to change, and we've been trying to change in the last few years," Schaus told Bloomberg TV anchor Manus Cranny, who interviewed him.

He cited several examples, including one from the upscale Harrods department store in London, which opened a bar selling Moët champagne by the glass.

"They selected to put that on the ground floor in the middle of the beauty floor because they saw how this category can generate excitement and interest," Schaus said.