The renewed importance of "branding" recognized by retailers

NRF 2024: Retail’s Big Show, the world’s largest convention in the retail sector boasting a 113-year history. The keywords for 2024 are threefold: "Begin with Brands," "Start with Stores," and "Play with People." How will traditional retail and marketing evolve? Mr. Noriaki Kimura, who supports BX and DX initiatives for the retail industry at Dentsu Inc., delivers the latest topics and trends only accessible by being on the ground, in a report format.

※This article is based on content from AdverTimes.

 

<Table of Contents>
▼The Major Paradigm Shift Arriving in the Post-COVID Era

▼Begin with Brands ~ The Resurgence of Manufacturers and Brands

▼The Evolution of the "Retail Agenda" Seen at NRF
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The Major Paradigm Shift Arriving in the Post-COVID Era

NRF 2024, held in New York from January 14th to 16th, marked the first fully "post-COVID" event in the US. Celebrating its 113th year, this convention signaled the arrival of the post-COVID era, revealing a significant paradigm shift distinct from previous years.

This report explores the underlying factors of this paradigm shift by reviewing the three-day keynote sessions held at NRF2024. By delivering the "business context" that most influences that year's marketing and promotion (including advertising) trends to professionals active in these fields, we hope to contribute to overcoming Japan's challenging consumption and living environment.

Begin with Brands: The Resurgence of Manufacturers and Brands

The first keyword glimpsed at NRF2024 was "Begin with Brands." This means that "shopping behavior, whether online or offline, for goods or services, only occurs when customers have a brand they want to buy."
The opening keynote on the first day featured a cross-talk between Michelle Gass, set to become Levi's new CEO, and Matthew Shay, the NRF Chairman, who made an impression wearing a custom-made denim jacket embroidered with the NRF emblem.

Cross-talk between Levi's (CEO: Michelle Gass) and NRF (Chairman: Matthew Shay)

LEVI’S has been promoting its TAILOR SHOP service for several years now, offering personalization and customization in its flagship stores. What was significant here was that this was explicitly stated from the consumer's perspective, not the manufacturer's, during the presentation.

Levi's flagship store @ Times Square

By last year's standards, it was extremely rare for a manufacturer or brand CEO to deliver the opening keynote. I believe many others also sensed a major shift in the industry landscape here.

When I first attended NRF2020 in person, CEO Michelle was leading Kohl's, a mid-sized U.S. department store chain. Beyond that, she was instrumental in revitalizing an aging retail brand and attracting younger customers by implementing a system allowing returns of Amazon EC purchases at physical stores. Considering Japan, a cross-industry collaboration between Kohl's and Amazon—two companies in direct competition—would be almost unimaginable.

Inside Kohl’s. Amazon EC returns and Shop-in-Shop (Sephora) BOPIS counters.

During her keynote, Michelle highlighted five key points for responding more swiftly and flexibly to markets and customers. It feels fitting that she, having aggressively implemented brand revitalization strategies even in retail distribution, can still speak to these points today despite her changed position.

<Five Key Points>
① The power of branding
② Hyper-focus on the consumer
③ Brand Innovation
④ Thinking like an omnichannel retailer
⑤ The Importance of Purpose and Value-

The Evolution of the "Retail Agenda" as Seen at NRF

Among the five points Michelle highlighted, the importance of brand and its underlying purpose was particularly emphasized. This clearly underscores that in the coming era, not only manufacturers but also retailers must place even greater emphasis on the principle stated at the beginning of this article: "Shopping behavior—whether online or offline, for goods or services—arises only when customers want to buy a specific brand."

Each year, NRF draws a crowd of prominent retailers and renowned speakers. On the opening day, she—who herself transitioned from retailer to manufacturer executive—took center stage to discuss the future of Levi's, a globally iconic brand with 170 years of history. The fact that the retailer-side audience listened with such conviction underscored the high level of interest in this agenda.

As described above, NRF 2024 opened with a keynote from a manufacturer CEO with a retail background. This marks an unusual start, even for me, having observed NRF consistently over the past seven years.

As mentioned in the first article, I believe the arguments presented at NRF can be summarized chronologically, starting from pre-pandemic 2018, as follows. The evolution of discussions at NRF likely offers many insights for those working in retail distribution and marketing within Japan.

Read the first article here

The demand chain, suppressed during the pandemic, has been unleashed. Moving forward, only companies that can successfully build brands that truly resonate with consumers will be chosen by individual customers. In the next article, I'd like to explore this concept starting from the store level.