The advice came like a machine gun rat-a-tat this week at the National Retail Federation’s Big Show: Be innovative. Fail fast. Iterate. Act like a start-up. Get in touch with your inner Silicon Valley.
At session after session the message was: Retail can secure its future not simply through technology, but also by adopting the methods and ethic of the companies that developed the technology.
Christian Davies, executive creative director at design firm FITCH, stood on a main stage at the trade show and told a rapt room of retail professionals that they were operating on mobile time — the creation of millennials, who are always on, always distracted, shopping in bursts whenever they please. Retailers, in turn, need to join that world, he said.
“We are moving from a concept of speed to market, to a market based on speed,” he said. “A market based on responsiveness, on ability to pivot. Good enough and now. This is the pace that they’re used to and this is a shift. We can’t be worried about finishing things. We can’t be worried about them being perfect. We have to get them out there. They need to be new and we have to do it today.”
And there was this from Pano Anthos, managing director of XRC Labs, who pointed to Facebook’s move to open up its platform to outside developers and in a way invoked the earliest days of Silicon Valley, when companies shared information in order to push everyone’s fortunes higher.
“We believe that sharing information is absolutely essential. I know this is breaking all kinds of rules here. We have to enable this across stores, across brands, to understand what the consumer wants,” he said. “Secondly, vendors have to be considered partners, not vendors. Collaborate with them. Bring their insight into your overall merchandising experience. Don’t dictate what should be done. Listen.”
“You have to be willing to cannibalize yourself. If you stand in the way of that, it’s over. That’s our view of the digital transformation. Basically, you innovate or you die.”
You get the idea.
More coverage of NRF’s Big Show 2016
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- IBM’s Watson tries his hand at retail
- The future of retail is forming fast
- Measuring ROI isn’t all about conversions
- Word from NRF’s Big Show: Innovate or die
- NRF’s Big Show in pictures: BloomReach Relevance Report, special edition
No, creating an innovative fail-fast, culture is not easy. And no doubt the talk of “agile” retail (which Davies says is the new “it” word in retail) rankles some traditional retailers and others who note that it’s all easier said than done. But it’s not really a choice. There is the millennial thing about expecting to be able to buy what they want, when they want and how they want.
And that’s not just a millennial thing. “There is a little bit of millennial in all of us,” Spencer Izard, of IDC Retail Insights, noted during a session on the store as a digital magnet.
So customers are demanding agility. But another reason for the need for speed became clear with a walk through the two massive expo halls this week, where 575 vendors were offering their answers for retailers’ challenges. Many of the solutions were technology based and while some will surely fizzle, others might provide a leg up for an early adopter. Doing nothing can be a bigger risk than doing something.
It’s not as if this notion of acting like a startup is a foreign one to the retail industry. A number of retailers have opened up innovation labs in Silicon Valley and elsewhere. Wal-Mart Stores, Target, Kohl’s and Lowe’s, to name a few, have opened labs in the San Francisco Bay Area, hoping to tap into the region’s innovative culture and tech talent. Neiman Marcus runs an innovation lab as part of its Texas headquarters.
“The change in technology is coming at us so quickly today,” Scott Emmons, who heads Neiman’s iLab, told those gathered for a session called “Storming Silicon Valley: The Leading Edge of Retail Tech Labs.” “We needed a central point within the organization that could go out and evaluate tech and try to tie various aspects of the business together.”
But just opening a lab isn’t the answer, says Wipro’s Ravi Purohit, who spoke with me after a Wipro colleague appeared on the store-as-magnet panel with Izard. It takes a new mindset for retailers, some of which are still working on that.
“There is a change which is not easy to do. Transforming a large retailer is always going to be a challenge,” said Purohit, Wipro’s vice president for retail in Europe and emerging markets. “How can you overcome that internal challenge, where you have been successful in a particular way?”
But as Davies said, “agile” is the new “it” word and the new “it” thing. Retailers, Purohit said, are beginning to move beyond considering change as simply risk and are looking at the potential upside to innovation.
“There are retailers that are looking at technology more as a revenue-generating engine, rather than just a cost to the company,” he said. “They’re saying, ‘Guys. Don’t worry. Focus on what opportunities are coming because of technology, which we shouldn’t lose.”
Anthony Bruce, CEO of Applied Predictive Technologies, is seeing the shift, too. He says the amount of data available today and the evolution of the processing power to crunch it are two big reasons retail companies are more willing to try new ways of doing business. The third, he said, is the support from top executives, which is likely a result of the first two reasons.
“Data is driving decision-making,” said Bruce, whose company was purchased last year by MasterCard and which uses data, including anonymous credit card activity, to help retailers make pricing and marketing decisions among others. “Even today, not all leaders know exactly what that is or exactly what action to take.”
But more and more leaders are learning. And if the talk at NRF’s Big Show is any indication, it’s the sort of lesson that could mean the difference between thriving and barely surviving as retail hurtles ahead into the digital future.
Photo of Davies courtesy of the National Retail Federation. Expo hall photo by Mike Cassidy.
Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach; follow him on Twitter at @mikecassidy.