EDITORS NOTE: Sandy Kennedy is president of the newly renamed Retail Industry Leaders Association (RILA), formerly International Mass Retail Association (IMRA). She came to RILA in December 2002 from Accenture (formerly Andersen Consulting) where she was director of the Leadership DialogueSeries, a roundtable venue for idea exchange between senior executives across multiple industries.
Ms. Kennedy is an association professional with more than twenty years experience, including seven years as senior vice president of membership services for the National Retail Federation from 1993 to 2000. Prior to that, she worked for the American Banker Association, Electronic Funds Transfer Association, and National Automated Clearing house in communications and education roles.
EDITOR: You just announced a name change for your association. Why did you make that decision?
KENNEDY:I think we saw an opportunity to better convey who we represent. When you look at our membership, retailers like Home Depot, Lowes, Target, and Wal-Mart, these are the companies who are revolutionizing retail.
We also wanted to emphasize the word industry, because we go beyond just the retail companies to include product manufacturers and service suppliers. All of these segments of the industry are pointed in the same direction, which is moving the industry forward. Thirdly, we aspire to represent in our membership those individuals in the industry who are truly the leaders. So thats how we came up with Retail Industry Leaders Association, or RILA [pronounced REE-la]. Our tag line says exactly what we do: Were retails future. We educate, innovate, and advocate.
EDITOR: Tell us why RILA exists and what your mission is.
KENNEDY: If you look at our membership, we have very specific areas that we are focusing on. We are not going to be everything to everybody. In May 2002, our board of directors gave us these critical success factors that are our focus.
One is the customer knowing and understanding the customer.
Another is people recruiting, developing, and retaining great people to work in your company. It includes the supply chain. This is how we differentiate ourselves. It is where our efficiencies come from and how we provide more product at the best price.
Finally, it encompasses business efficiencies, which includes everything from loss prevention to safety…a whole realm of things that differentiate our members in terms of their focus.
Going back to why we changed our name, I think that’s where the word Mass just didn’t resonate. Our members are successful not because they serve the masses, but because they understand their customers and serve them well. They have incredible supply-chain efficiencies, and they know how to operate their businesses well. So when you took that and worked it around, the word Mass just wasn’t resonating and it didn’t work for us going forward.
EDITOR: I know you have a board of directors of top executives from your members. How does the board of directors play a role in what happens at RILA?
KENNEDY:They play a very important role. Its a small board in relation to some of the other trade organizations that represent retail. We have about thirty members. And, again, we have product manufacturers on the board. Senior executives from Unilever, VF Corporation, Proctor and Gamble, and Gillette all sit on our board of directors. We also have KPMG on our board representing service suppliers. And, of course, we have executives from the top retailers. Individuals like Brad Anderson, CEO of Best Buy, who was on the January 12th cover of Forbes as Americas company of the year, is our vice chairman. Joe Scarlett, CEO of Tractor Supply Company, who was in the same Forbes issue as one of the best managed companies in America, is our chairman.
Our board is also global. We have international retailers in the group. Individuals like Dr. Hans-Joachim Kerber, CEO of METRO AG from Germany, Gordon Brown from Wilkinson Hardware Stores in the United Kingdom, and also Thomas Haig, president and COO from Zellers in Canada. The common thread is not what category you’re in or what customer you’re serving, but the unique ways that you execute your operations.
EDITOR: How often are you with them, and do they suggest ways for bringing more value to the association?
KENNEDY:Absolutely. They are very vocal, and I field all ideas by them. I also have a very active executive committee that I have conference calls with monthly. So, in terms of whats going on in the organization, ideas that we are wanting to vet, they will either give us the right people in their organization or they’ll tell us themselves that its not going to work. Or, that its a fabulous idea, and how we can take it to the next step.
The executive committee provides me with the monthly leadership. Then we have two board meetings a year, one in conjunction with our leadership forum, and the other in conjunction with our annual meeting in September. They are very involved. There’s a lot of discussion, debate, dialogue. We talk not only about the vision and challenges for the association, but also about industry issues. For example, RFID was on our last agenda.
At a very senior level, we have strategic discussions about those things that will likely revolutionize the industry. And because our board is so diverse, we have a lot of different perspectives, a lot of different ideas. And, yet, we manage to come away with new ways to move the association, and, hopefully, the industry forward.
EDITOR: You mentioned that you have Wal-Mart and Home Depot and some of the largest retailers in your membership, but do smaller retailers play a big role in RILA as well?
KENNEDY:We absolutely feel like there is a role for smaller companies. In fact, we’ve been expanding our recruiting efforts. We have brought in members like Tuesday Morning and Gabriel Brothers. WHSmith from the UK has joined. Auto Nation has joined, because they want to learn more about running a retail business. They are a $19 billion company, but want to understand more about retail. Washington Mutual joined. While they are officially a financial institution, they call their branches stores. They feel like the more they can learn about how to make their customer experience more meaningful, the better the customer relationship, which will increase transactions and increase revenues. So, we’re seeing interest from all kinds of interesting retailers.
EDITOR: The loss prevention community is most familiar with your LP, safety, and audit conference. What are some of the other disciplines that conduct annual conventions?
KENNEDY: We have a terrific logistics conference…in fact, the best in the industry as far as Im concerned. We had a 30 percent increase in retail attendance this year. We have a terrific logistics steering committee that did a really great job.
We have a marketing conference thats small, but growing…about 150 folks. This allows for more personal interaction among the group and a lot of dialogue, discussions, and debates.
We also do some one-of-a-kind things that cover special interests. Last year we did a C-TPAT [Customs-Trade PartnershipAgainst Terrorism] best practices seminar. We also did a specialized seminar on organized retail theft. We are always looking for hot topics that are meaningful and provide immediate value to the industry.
We have also developed smaller, more intimate groups we call leaders councils. These are meant for the top people within their disciplines, to share what keeps them up at night and determine how we can work together on common issues that are going to move the industry forward. That could be best practices, maybe some product requirements that theyre looking for, sometimes it might be legislative agendas that are coming up, such as how we can combat workers comp or tort reform issues.
Were also launching our first Annual Leaders Exchange, or ALEx, this September where well gather decision makers from retailers and product manufacturers together in a first-of-its kind event that will produce a state-of-the-industry report.
EDITOR: Those are top executives in corporations that get together. Do you find that theres a fair exchange of information and a true spirit of sharing vision rather than someone trying to find a competitive advantage?
KENNEDY:Oh, absolutely. Were very careful about anti-trust issues, of course. Yet, its amazing how many common threads there are that you can discuss in a non-competitive environment.
EDITOR: Talk a little bit about the makeup and role of your loss prevention steering committee.
KENNEDY:I think whats interesting about this group is how much asset protection, managing risk, is evolving and changing.Its intriguing working with a group that sees their whole position change and broaden. Its not just about shrink anymore. Its so much bigger than that.
I was fascinated by the cover of your January/February issue, even trademark and brand protection falls into asset protection today. So many other topics are part of LP today that weren’t so important maybe five years ago, like safety issues and internal audit. Its very interesting to see how the definition of loss prevention has changed and how broad its become.
EDITOR: Your loss prevention, audit, and safety convention is scheduled for April 13 16 in Dallas. How many attendees are you expecting?
KENNEDY:Were expecting 250 to 300 executives from retail companies.
EDITOR: And how many vendors or solution providers?
KENNEDY: How much shatavari should i take Actually, were in a great position. We have a lot more retailers than we do solution providers, which is very unusual. Any time we have a trade show or event with a vendor component, we work very hard to keep our ratios good. We are not about selling every bit of space that we possibly can. We want to create a good experience for both the supplier and the retailer.
EDITOR: Will we see you at the LP convention?
KENNEDY: Absolutely.
EDITOR: As I recall, last year you were there working behind the registration desk. Thats not a typical role for the association president.
KENNEDY:Perhaps not, but its a great way for me to meet people. You see, Im a retail junkie. I love talking to people, hearing whats going on in the industry. Just sitting here is not going to get me any closer to retail.
EDITOR:What roles do you and your staff play at the conference?
KENNEDY:We have a couple roles. First and foremost, is to make sure our members get the most value they can out of participating. While we charge registration fees, our service providers and vendors foot most of the bill, and I want to make sure that they get what they’re looking for. The days of only standing in your booth and thinking that thats how you’re going to develop a relationship are over. Thats one reason we do allow vendors to participate in the sessions and learn what the retailer is learning and to have a chance to network outside the exhibit hall. I think that differentiates us. I really want RILA to be known as an organization who cares about all of the industry components, not just the retailers. Of course, if you dont take of the retailers, they wont be there either.
And then, second, I think that were there to learn. We do a lot of listening. We want to hear input, good and bad, because thats the only way were going to get better.
EDITOR: You mentioned earlier that you conducted an organized retail theft seminar. What caused that to happen, how did it come off, what value did you get from it, and what are the plans going forward with it?
KENNEDY:Again, because we have product manufacturers involved, they bring a unique perspective to the dialogue. In this case, Gillette was the product manufacturer who brought this to us, in conjunction with the University of Florida. So,were bringing together the academic world, the practical world, and the association, which has the role to disseminate the learning. Plus, we are partnering with other trade associations that had similar interests, in this case, NACDS [National Association of Chain Drug Stores].
I believe our organized retail crime seminar has great possibilities. There is a lot of learning shared. There are some best practices that come out of it. We’ve identified some things that need to be explored to benefit the industry. For example, we talked about the need for an early alert system and web based mechanisms that would provide people with quick information.
EDITOR: Are there plans going forward for other types of initiatives related to organized retail crime?
KENNEDY:There are. We really feel that there are three main focus points for ORC in the future.
- First is the need for greater education and understanding of ORC within the retail industry and all levels of government.
- Second, the need for the retail industry to build better relationships with each other and with local law enforcement.
- And third is the need for stronger punishment for ORC offenders.
We plan to work with various partners to continue to educate as many people as possible as to what a huge problem ORC really is to their community and gain their assistance in any way possible to curtail or slow it down. A better understanding or education by both retail management and local law enforcement of how big this problem really is has to reach more people for us to really have a chance at defeating these groups.
We have started to work with our members to build strong alliances with each other and with their local communities and law enforcement. There is nothing stronger then a group of people dedicated to a cause with a focused agenda. If they continue to concentrate on supplying each other information, retailer to retailer, LP to store operations, and retailer to community, they will find much greater reductions in shrink and exposure to ORC.
EDITOR: You also mentioned C-TPAT. What role does RILAplay here?
KENNEDY:We actually took a leadership role in cargo security very early. After September 11th, our members felt that they needed to balance the needs of securing the nations ports with moving goods to the customer. With the expertise of KPMG, we were able to work with retailers to develop the industrys first best practices manual.
We have also been encouraging our membership to be involved in the C-TPAT program. Were educating people about it, talking about it, and pointing them to the Customs Service.
The more educated our membership is and the more involved, the less likely customs will put unwieldy regulations on us that would cause a slowdown at the ports.
EDITOR: Are there meetings that relate to C-TPAT?
KENNEDY:Yes, we have a supply-chain security task force that holds conference calls as well as face-to-face meetings when something arises.
EDITOR: Is there involvement from the loss prevention community with this group?
KENNEDY:We certainly see a linkage, because it is a growing area for the loss prevention executives.
EDITOR: How do LP executives get more involved in this area?
KENNEDY: We communicate when the calls are. If someone is interested, they should check the supply-chain link on our website, www.retail-leaders.org.
Incidentally, the conference calls are really fascinating. I sat in on one last March when people were first hearing about a strange respiratory disease in China. A representative from Home Depot on the supply-chain security call asked if anybody else was pulling their people out of China. This was two months before SARS became a part of our everyday language. So, we were able to provide early alerts to our members just through that call.
EDITOR: You had mentioned RFID earlier. What are some of the things you are doing on RFID?
KENNEDY:For several years, IMRA…now RILA…has been a source of education on this subject. Weve conducted sessions involving both product manufacturers and retailers talking about the opportunities, the challenges, what it really means, limitations on the technology, the opportunities of the technology. Weve discussed everything from case and pallet issue to item issues. Weve also done a pretty good job of educating some of the state retail association executives, because this is going to move from the operational area to the public policy arena very soon. Its important that we be as prepared with communications and messages as possible, so that nothing deters this from providing the unique opportunity that the industry can realize from it.
EDITOR:I understand you have a web-based program on RFID.
KENNEDY: One of the things were doing around education on this subject is a web-based training tool. It is designed for more senior people or less technical people who need to have a base understanding, a strategic understanding, of the technology and benefits that can be derived from RFID at the case and pallet level.
EDITOR:From a global perspective, whats the vision for RILA and some of your long-term objectives?
KENNEDY:Our mission is to lead and serve the most successful and innovative retailers and consumer product manufacturers through world-class education, innovation, and advocacy. We want to be a learning organization. Were looking for all kinds of new ways to reach out. Were developing ideas around portals. People dont want to travel all the time. They want to have shorter meetings or no meetings. So, web-based training and portals where you can exchange information and have dialogue without having to physically be together are important in our future. We think there are a lot of opportunities to enhance our website so that its a real tool for the industry. As our membership becomes more international and more diverse, it is going to be more and more important that we have 24/7 tools that people can get to.
EDITOR:What about your membership?
KENNEDY:In terms of our membership, we want to attract successful and innovative retailers. That can be defined a lot of different ways. Its not necessarily the largest. It is anybody who is successful, say, in how they deal with customers or how they do their in-store format, or it might be how they run risk management. The innovative and successful can come from many different areas, regardless of size and format.
We want to be a source of new ideas. A good example of that is our global innovations study of forty of the most innovative retailers in the world.
As the industry changes, which is happening every day, because were smaller, we can align ourselves more quickly than others to some of these issues. Because our organization is small, we can be more agile. Were not looking to have a business model that will last more than four or five years. By that time, well change again to meet our members needs.
EDITOR: Your organization certainly seems very member focused.
KENNEDY:It absolutely is. The day I forget who pays my salary, is the day I should leave. Too many associations in all kinds of industries forget who they work for. As long as I have a leadership role in RILA, we will remain focused on helping our members lead the retail industry into the future.
EDITOR: Thats a tremendous goal. We wish you the best of luck. And we look forward to seeing you soon at the LP convention in Dallas.
KENNEDY:I look forward to seeing you and all the other leading executives in the loss prevention industry. And let me add my thanks to Loss Prevention magazine for the leadership role you play in the LP industry and your support of our conference.