“We must learn from our American friends.” I kept hearing this during my recent stay in Beijing, from retailers of all sizes. The China Commerce Association for General Merchandise (CCAGM) had invited me to deliver a keynote address at their 8th annual China Department Store Summit, which draws around 300 executives from China and surrounding countries. I spoke about the state of retail in the States and the characteristics of US retailers who are thriving in the downturn. I was one of several “state of” keynotes, including Japan, Korea and Malaysia. (I was terrified, of course — but I shouldn’t have worried. I had them at “Ni hao.”)
Turns out, we spoke the international language of retailing. Chinese department stores are facing the same issues that US retailers are: maintaining customer service standards under economic pressures; differentiating product from the competition; competing against foreign retailers entering the market. American brands have cachet in China, and they know that in order to attract these brands to their stores, their customer service standards must improve. They understand that assortment localization is one of the best ways to differentiate as a department store retailer. And they know that Chinese retailing must reinvent itself to defend against the onslaught of foreign stores who have identified the fastest growing middle class in the world. China is the last best hope for the comeback of the “Aspirational Shopper.” (I spent some time in a luxury mall, Shin Kong Place. Coach is rocking over there.)
So when I talked about how Nordstrom modified their product mix to quickly capture market share in the downturn, I saw nods of approval in the audience. When I talked about Kroger‘s disciplined approach to customer loyalty, they took notes. When I talked about Amazon.com‘s commitment to innovation, they took a picture of the slide. And when I spoke about all the cool stuff that Best Buy is doing both here and in China to drive sales using mobile, their faces lit up with recognition. (The US is really behind when it comes to mobile, but NRF is trying to move the needle on that a bit.)
They asked what the biggest challenges would be for the future of department stores in the US. I asked one of my traveling companions, Kimberly Grabel (SVP of Saks Fifth Avenue), what she thought, and her first response was “differentiation.” It will be interesting to see how China department stores like Beijing Wangfujing develop their differentiation models in the face of growing global competition. I know one thing for sure, it’ll develop quickly. Everything over there is changing at lightning speed.
One thing is permanent, though: our Chinese friends have great respect for NRF, and NRF has great respect for Chinese retailing. In fact, the NRF Foundation launched an exciting new venture in China this past December – certification and training for store managers. Kathy Mance (the NRF Foundation’s Executive Director), Kimberly Grabel and I got to attend a training class, held at the headquarters of one of our partners on the ground, the China Chamber of International Commerce (CCOIC). It was thrilling to see the fruits of NRFF’s labor made real in a classroom setting. (We felt like rock stars. Well, rock stars in suits.)
To our new friends: xie xie for the memories. And to the rest of the world: expect to meet our new friends at the 100th Anniversary of NRF’s BIG Show, this January in New York. CCOIC will be sending a group to the Show, to learn more from their “American friends.” I look forward to giving them the same warm welcome when they visit New York as they did when I traveled to Beijing.