Marni Edelhart: Hi this is Marni Edelhart, Director of Content and Experience for Knowledge@Wharton 3rd Annual Retail & CPG Summit, on the line with Cathy Hotka. Cathy knows most of the retail chief information officers in North America and creates opportunities for senior retail leaders to network with one another. Her firm Cathy Hotka & Associates LLC creates networking events, dinner discussions, summits and executive events that brings together retail CIOs and is retail’s go-to player when technology companies use marketing strategies for the retail industry. Clients have included nearly all of the largest technology companies pursuing the American market. Hi Cathy.
Cathy Hotka: Hi there. How are you?
Marni Edelhart: I am doing well. Thanks. How are you doing?
Cathy Hotka: Excellent. It’s a great day.
Marni Edelhart: I am so glad to be speaking with you and learning a little bit more about you today. So I know your career started in politics. But I am really curious how you made the move into retail where you specialize now.
Cathy Hotka: Well, sometimes you lose the [inaudible 00:01:06]. My boss Jimmy Carter didn’t win the 1980 election. And everyone I knew was out of a job. So I had to find a new career. I wound up working in technology and staffed the American Petroleum Institute’s CIO council and then I was hired by the National Retail Federation to create a CIO council for retail and I did. So in a lot of ways the retail industry needs the same skills that I learned in politics. It’s all about relationships, marketing and branding.
Marni Edelhart: You mentioned relationships and those are obviously very key to your business. How did you foster such engaged network?
Cathy Hotka: Over time and with great effort. Bob Metcalfe who created Ethernet said at the time that the network becomes more important when new connections are added and that’s true with people too. The more people you know, the more people they know, the more important the network becomes. I now have about 4000 contacts on LinkedIn and I don’t even friend people that I don’t have a real connection with. This is important in retail because retail people tend to stay in retail.
So when you make friends with someone you will know that person for many years. They will leave one job and go to another. I’ve known some people for decades across many jobs. I know their spouses’ names and how old their kids are. Your network isn’t about titles or companies, it’s about people and that’s my business model. I introduced technology company people to the prospects they want to meet. And it’s worth the time and the effort to maintain that network.
Marni Edelhart: So on your website it says customers are no longer buying products. They are buy experiences. How do you incorporate this sort of experiential approach into your own marketing effort?
Cathy Hotka: This is so interesting to me. We are developing an experiential economy. And we can see it in several ways. The more affluent customers want trips. They want concerts. Millennials want to rent nice looking apartments rather than buying a fixer upper house. Customer expectations are higher than they’ve ever been. And customers across the board expect a satisfying and interesting in-store experience. This has significant implications for the retail industry. It’s one of the reasons that we are seeing a decline of the department store. So for my business, where I am putting senior people together around the table, creating a unique and curated experience is very important. Very senior people don’t want to see just anybody. They want to see people who are very smart and who can help them change the trajectory of the industry. And so that’s what my job’s all about.
Marni Edelhart: From your very sort of enmeshed position in this world, what are you seeing as the top three challenges facing retail leaders as we approach 2016?
Cathy Hotka: Well, I think there are three that are major. One is mobile. Over 65% of sales now originate on a mobile phone. So how can retailers create compelling and unique apps? What can they enable on the phone that will help them eclipse the competition?
Another is payments. Just a couple of years ago, it was a regular credit card or cash or nothing. But now, you’ve got Apple Pay, Samsung Pay, Wal-Mart Pay, EMV. There are loads of new opportunities and frankly new ways sometimes for retailers to fail. But the most obvious important challenge facing retailers is the word they most hate, which is omnichannel. The customer expects to be able to purchase in one channel and return to another. To be in the store and simultaneously access the retail website. They want to see reviews. They want to see product recommendations. It’s a huge job for retail to maintain legacy technologies and also to be cutting edge. So that’s really the main thing you are looking at these days.
Marni Edelhart: Well, that makes me happy that we’ve decided to subtitle this year’s event Such Strategic Collaboration for Omnichannel Success. It’s such a pressing issue.
Cathy Hotka: IT is.
Marni Edelhart: We talked a little bit about experience and how important that is. I am curious what you are seeing that’s impressing you across the customer experience landscape right now?
Cathy Hotka: So let me get on some of the ones that I think are interesting. I love the TJX companies. TJX Marshalls and HomeGoods, they know what they are good at. They are not experiential companies necessarily but they know how to do what they do and they do it very well. It’s always a good experience. Starbucks as a brand still wins. You’re visit to a Starbucks especially if you are using the Starbucks app is a complete delight. You bypass the line, you still get the atmosphere. It’s fantastic.
My son is a huge fan of Bonobos. I think they have 17 stores. It’s not big. They carry very little merchandise, but visitors get a custom fit, they get great personal service and a very high quality product. And the one I visited yesterday always gets high marks Sephora. There is a wealth of personal knowledge and product knowledge and service in every store. So if you leave a Sephora with a product that’s wrong for you, that’s your own fault because there are plenty of people there to help you.
Marni Edelhart: That is very true. I have had wonderful experiences at all of the stores. Well, thank you so much Cathy. This information has been invaluable. And we are really excited to include you both on the board and as a participant at this year’s 3rd Annual Retail & CPG Summit.
Cathy Hotka: Excellent. Thanks so much.