Brands must stand for something to stay relevant Over the course of the day, we heard multiple panelists emphasize that consumers want to know what companies and brands stand for, and not just what they are selling. Companies are increasingly taking stands on social and political issues and we expect this trend to continue into 2019. In 2018, Dick’s Sporting Goods took a stand on gun control; Patagonia has a long heritage of being a mission-driven company and has given over $100 million to support environmental issues including air, water, and soil. The company also announced it would donate all the proceeds of the recent corporate tax cut to entities that combat climate change, saying the environment needed the money more. On one panel, The Anatomy of a Mission-Driven Organization, moderator Amy Smith, Chief Giving Officer at TOMS, offered that the definition of a purpose-driven company is both “unique and authentic.” The mission of TOMS is “to help improve lives through business.” Smith said that everyone at TOMS, from the finance department to logistics, has a responsibility to support fulfilling that mission. Jostein Solheim, Head of Unilever’s Foods and Refreshment Division, said that companies have to aim to do more than sell products today, and employees have to believe in the vison of the company, because brands and companies don’t have purposes — people do. And brands with a purpose are becoming increasingly important to consumers. According to an Edelman study, over 50% of people purchased something because of what the company stood for, and not necessarily because of the product. Smith even suggested brands can become irrelevant if they do not stand for something. Unilever looked at its entire portfolio of brands and companies, and found that mission-driven brands out-performed non-mission-driven brands. It’s not easy building a purpose-driven brand, but the results speak for themselves. The Chinese consumer is leading the way During the session titled Future Now: How China Today Foreshadows Shopping and Consumerism of Tomorrow, we got a flavor for how important — and just how different — the fast-growing China market is. When China first opened to foreign business decades ago, the lack of basic infrastructure to support commerce was one of the biggest challenges Western companies faced. Today, China has leapfrogged over decades of development in the West and has heavily embraced technologies that are still in their infancy in the West. Here are some of the highlights:

• Consumerism has ballooned in China, especially among young people who are less cautious about money than their parents.
• China has over 400 million millennials, and over 57% are highly educated.
• 90% of China’s millennials own smartphones.
• There are 700 million internet users.
• China’s consumers have embraced mobile, supporting a $1 trillion online economy.
• China’s consumers operate almost exclusively in WeChat, an app that handles messaging, social media, and payments, and nearly every aspect of communication in one tool.

China’s shoppers have embraced digital and mobile purchasing far more than their Western counterparts. Consumers in China also expect smooth integration of the online and offline experience — and product delivery is key (even a cup of coffee can be ordered via smartphone for delivery). China’s consumers leapt past their Western counterparts from cash straight into the digital age largely because there is no decades-long history of ATM and credit card use, so consumers went straight from physical cash to mobile digital payments without having to break any established habits. The Chinese consumer wants luxury brands Luxury is king in China. On the panel titled Future Now: How China Today Foreshadows Shopping and Consumerism of Tomorrow, Harlan Bratcher, Head for Fashion at JD.com highlighted that there are 700 million internet users in China, and their exposure to overseas brands increases every day. JD.com, one of China’s biggest online retailers and one of the largest retail logistics companies in the world, launched an experiential “white glove” delivery service for its luxury brands in 2018. The service delivers orders from its luxury goods platform to consumers within two hours — by concierges wearing white gloves. The packages arrive in special boxes in a black sedan. Bratcher said the service is so popular that some of its consumers order it for the experience and to have a gift arrive ceremoniously. Other retailers are partnering with JD.com to augment their own services to provide last mile retail delivery services. JD.com has an extensive delivery network in China. The company operates over 100 drone bases across China with over 7,000 delivery centers. The company also has autonomous drone vehicles. The company guarantees same day or next day delivery to customers who order before 11:00 am, which has an accuracy rate of 90%, according to Bratcher. Cannabis and gender-fluid brands are reaching new consumers On the panel NYC Most Interesting New Concepts, Ray Ehschied, Principal, Director of Design Services at Interior Architects, presented the “best of” new stores in New York.  The list included brands and retailers that are providing new visual experiences, offering unique spaces, and reaching new demographics. Here is the list.

• Seaport, Corso Como
• SOHO, Gucci
• SOHO, Hespirios
• SOHO, Rowing Blazers
• SOHO, Champion
• SOHO, Sunspel
• SOHO, Roman and Williams Guild
• SOHO, Birkenstock
• Meatpacking District, Dior
• NOHO, The Phluid Project
• Levi’s Times Square
• Fifth Avenue, MedMen

David Dancer, MedMen Chief Marketing Officer and Rob Smith, Founder, The Phluid Project, spoke in detail about their brands and specifically about the consumer demographic that each is reaching. Robert Smith, Founder of The Phluid Project, said that he created a brand that is gender free and a store where “pronouns are not important.” The store offers clothing, shoes, accessories and books, and even hosts events. According to Smith, Gen Z is the most gender-neutral demographic and will represent 40% of all consumers by 2020. 56% of Gen Zers shop outside of their gender and he estimated that Gen Z spending potential, which includes allowances, earned wages and gifts, will reach $143 billion by 2020. David Dancer, MedMen Chief Marketing Officer, presented an overview of the cannabis landscape, the company’s retail strategy, and the MedMen retail experience. The cannabis landscape is changing: Some 60% of Americans live in a state in which marijuana is legal in some form and 64% of Americans support fully legalizing marijuana. MedMen has created a retail experience that has been dubbed “the Apple store of cannabis.” The company has a retail experience of 66 licensed stores, an innovative supply chain, and accessible brands. Dancer said that cannabis is becoming more widely accepted, highlighting the major retail opportunity as cannabis becomes legal in more states. [caption id="attachment_64519" align="aligncenter" width="630"] Source: MedMen[/caption] Inclusion fuels growth In a presentation on How Microsoft Become a Mission-driven Brand, Chris Capossela, Microsoft’s Chief Marketing Officer, stated that "inclusion fuels growth." He pointed out that inclusive design matters because:

1. There are over 1 billion people with disabilities in the world.
2. Black and Hispanic consumers account for 19% of US spending power.
3. The global spending power of women is estimated at $40 trillion.
4. By 2025, 75% of the workforce will be younger than 35 years old.

Capossela said it is crucial to understand there is a vast pool of non-traditional, potential customers. Retailers and brands should take advantage of the untapped market and build marketing campaigns around them. Companies benefit from incorporating the concept of inclusive design. Merging physical interactions with digital engagement creates frictionless retail On the panel Frictionless Retail in the Age of the “Always On” Consumer, Mark Taylor, CEO of Global DCX Practice at Capgemini, led a discussion on frictionless retail. John Frierson, President of Fred Segal, described creating frictionless retail as “building a more unified community, so it could function better.” Ajay Kori, Co-Founder of UrbanStems, claimed “the future is omnichannel.” Panelists also shared their thoughts on the transformation from digital technology to physical experience. Scott Tannen, CEO and Cofounder of Boll & Branch, said the gaming industry is doing well in making retail frictionless. Frierson seconded, “digital brands pop down, not pop up, to the real world to create experience.” Kori used the example of Bonobos to further address the importance of physical experience. Panelists agreed that to achieve frictionless retail, brands should start with understanding their own value propositions and pain points, and then they can create the best customer experience.