Panel
Can Retailers Thrive in a Digital World?
Milken InstituteSilas Chou, John Danhakl, Jim Fielding, Mindy Grossman, David E. Simon, Dottie Mattison, Jason Rapp, Justine Angeli, Adam Kalish, Ken Hicks
- Consumers are driving retail innovation through technology, social networks, and mobility, prompting a shift where digital platforms enable community conversations more powerful than single physical locations.
- HSN's $3.2 billion business generates 50% of transactions digitally supported by data on 59 million individuals, while its gaming portal launched 18 months ago has recorded over 100 million plays and 750,000 daily registered users.
- Forward-looking plans include HSN launching a music series in June with a one-hour Facebook pre-show for a broadcast reaching 96 million homes, and Frontgate exploring experiential destinations like spa environments or cafes.
- Claire's and Icing are investing equally in store and online environments, viewing them as non-mutually exclusive, with Claire's targeting Gen Z through Instagram's 90,000 tagged photos and global YouTube "haul" videos.
- Mall landlords plan to drive traffic by creating diverse retailer mixes, community events, wonderful lobbies, and Wi-Fi enabled stores to encourage physical interaction and seamless digital connectivity.
- Traditional retailers including Macy's, Neiman Marcus, and Novel Holdings are investing significantly in digital platforms, while pure-play e-commerce in China is opening physical shops to satisfy desires for social interaction and experience comparison.
- Sales tax legislation is expected to significantly pause the momentum of online-only retailers and impact "showrooming," effectively leveling the playing field by closing the cost advantage previously held by digital sellers.
- Market predictions suggest Amazon's catalog business will not grow beyond a 15% ceiling, similar to US trends in the late 19th century, and that pure-play e-commerce in China will face resistance from the physical store demand of brand owners.
- Recent sales drops are attributed to payroll taxes, higher gasoline prices, slow IRS rebate checks, and severe weather, though traffic recovered in HSN during spring break and Easter.
- Future retail strategies focus on differentiation through exclusive products, which HSN offers for 70% to 75% of its catalog, and experiential customization, as seen in Burberry's 50% category increase from the "Art of the Trench" initiative.
- Amazon is expanding same-day delivery capabilities to achieve instant gratification, while Claire's is launching a "dress shop" style quiz tool to provide personalized content based on body type.
- Retailers aim to extend engagement beyond live broadcasts through one-on-one artist conversations, and mall operators are assuming responsibility for driving excitement as department stores lose economic leverage.
- While flash sales are viewed as a niche rather than an industry revolution, global box office records broken over the last five years indicate continued consumer demand for quality and community in physical theaters.
- Sales tax recognition is predicted to have a material and psychological impact on consumer behavior, although specific percentages remain unquantified, and the environmental argument for online versus physical shopping is considered complex.
- Retailers recognize that safe environments and enticing activities are necessary to establish mall-visiting habits among young children, and the "green" argument for online shopping is not expected to be the primary factor in consumer decision-making.