Challenges in the Retail Industry

An interview with Frank J.Furlan | CEO Luxury Retail

With the challenges facing the brick and mortar retailing marketplace today, what do you feel are key opportunities?

– I believe what’s happening is a rethink and overdue correction of this distribution channel. The closures both of stores and malls also result in reductions of distribution points to end consumers. Ecommerce, without a doubt, is a key opportunity but must be complemented for reach both via an owned company site and third party ones, such as Amazon.  The shifting of the landscape is also causing reductions in rents, creating a financially viable entry to brick and mortar. It would be wrong to assume that one channel will replace the other. Many categories need this co-existence of distribution and with a seamless Omni-Channel approach. A fully immersive customer experience is best achieved in a physical setting rather than a virtual one for many product categories.  Rapid market change also requires a flexible retail lease model. I believe the days of 10 year leases are over. Landlords and companies will benefit far more from a flexible, shorter lease term model that allows rapid shifts of distribution to consumer profiles and buying pattern changes. Pop up stores and showrooms under shorter lease terms present an excellent opportunity as well.

What are the key elements and opportunities you see behind the shift in consumer purchasing patterns today?

– The winners I think will be those brands that focus and fully engage consistently with their customer bases. It’s a matter of engaging hearts and minds, not just gaining wallets. This requires deep and specific insight as lower traffic means focusing and investing increasingly into a smaller audience. There’s also a major shift in consumer buying patterns that transcends beyond just value, story, and experience. Traditionally, consumer influencing of larger groups was a top-down first to next generation approach in many categories, or trying to market to many demographics at the same time (baby boomer, millennial, etc.).  I see a significant shift happening whereby younger consumers are now upwardly influencing generations before them. The internet has created a powerful informational tool that allows such upwards cross communication and sharing to happen seamlessly. It’s wrong to assume that it’s only the younger generation that are harnessing technology. As an example, I know many elder-generation who have become high adopters of Skype and Face Time, and who use that very actively to communicate with their families. I likewise see many purchase decisions being driven by the perceptions and values of the next generation. In this respect, companies that deliver real and consistent innovation and value will win. Uniqueness and transparency in products and company’s storytelling now eclipses the traditional ways of marketing, and requires the ability to be truly authentic at all times.

Who are the future Leaders of the Retail industry?

– The rapid and significant changes enveloping every area of the retail industry will likely demand even more flexibility and fuller commitment to innovation by leaders. Maintaining only sustainable companies, products and technologies will not work.  Leaders will need to accept failure almost as often as success. Innovation, not sustainability, will be the cornerstone of every area of the retail business. In company cultures, it will require leaders forcing organizations to act openly, quickly and flexibly while eliminating legacy processes and thought patterns (perhaps people who think this way also).  This rapidly shifting scenario will see a stark contrast in leadership requirements as well – highly experienced and intuitive leadership backgrounds coupled with the deep knowledge and skills needed to rapidly deploy these new innovations.

About Frank J. Furlan:

Frank is a globally versed senior operating executive, most recently CEO of Perfumania, leading multi-brand operations in multi-cultural environments. Frank’s previous engagements were with world class luxury and consumer goods brands such as The Swatch Group, Estee Lauder Companies, and Revlon Cosmetics. Frank thrives in revenue acceleration, margin enhancement and turnaround situations. With an equally tenured career in watches, jewelry and the beauty industry, and equal residence in Europe and The Americas, Frank is a renowned executive in the Luxury/Retail industry.With a Bachelor’s degree in Psychology and Marketing from Boston University, Frank currently resides with his family in New Canaan CT.

 

 


I have no special talent. I am only passionately curious.

Albert Einstein