Features, Technology

A View Into the New Normal: AKA, The Retail Renaissance

I’ve often been criticized of late as being a harbinger of “death,” namely, a retail apocalypse or even worse, a technology tsunami about to break and wipe out every old world retailer in its path. In self-defense, it does seem as though we are bombarded 24/7 across all of the media with “technology this” and “technology that.” And if the entire non-tech universe isn’t racing to embrace and understand it, and bow in supplication to the Tech Gods, it will indeed become toast.

On the other hand, we can take the higher road, which I did recently by attending and participating in SAP’s Retail Executive Forum in New York. Anybody who knows SAP would certainly view them as one of the “Gods” of technology in their role innovating intelligent solutions throughout the entire commerce ecosystem. During the Forum, SAP successfully provided a new storyline for the future of retail. First, they transformed the popular negative narrative of chaos, disruption, and apocalypse to a “new normal” which they anointed the “retail renaissance.” As Matt Laukaitis, SVP and General Manager, SAP Retail NA said, “ Let’s forget the doom and gloom. We’re here to share what works – the strategies for how you can adapt, lead, and thrive – and drive your own success.”

Second, they provided a major learning experience of the positive significance of this technology revolution. Admittedly SAP has technology nailed; they understand and live every nuance of it. More importantly, they understand the multitude of value chains, from product and service creation, all the way through consumption. Because technology is built into their DNA, they know how to use it and embed it into every link in the value chain. I’m not talking technology for the sake of technology, but how to use technology as an essential strategic tool.

The key takeaway from the SAP executives and other CEO keynoters and industry experts was that all consumer-facing businesses are now, more than ever, being driven by their technology-armed, highly demanding customers. Therefore, strategy development and business models must begin with a complete understanding of each consumer’s desire, and ultimately end with the perfect delivery of these individualized wants and needs. The major focus of the Forum was how technology, in all of its various formats, can be used to fulfill each customer’s needs. Yes, I know this sounds like stating the obvious, but the obvious becomes brilliant when successfully implemented. And there were many examples of how to achieve such success.

Costco Wholesale Corporation was represented by its co-founder and former CEO, Jim Sinegal, who explained their core success factor, which Costco has adhered to from day one. The business model with every strategy and tactic start and end with making the customer ecstatic. Costco is embracing technology and the internet, but only to the extent it can elevate the customer experience. Jim commented on how the “treasure hunt” experience is a major traffic driver for their stores, which, so far, is less attainable online.

Doug Wood, CEO of Tommy Bahama also has the customer experience in the center of everything they do. Integrating experience across the platform is imperative. He explained it’s not just brick and mortar, it’s not just e-commerce, not just the Tommy Bahama restaurant. He said it all comes down to interacting with the guest —in any way that guest wants—from offering experiential in-store offerings like restaurants to seamless digital experiences that are true to the brand. Wood noted it is vital to constantly keep up with all of the evolutions at retail, as well as understand there is constant room for improvement.

A fireside chat with Foot Locker’s CEO, Dick Johnson, told a similar story. He said consumers drive everything, and since they tap into Footlocker wherever they may be, both their digital and physical store strategies must be in sync.

Throughout the conference there were several fast-track learning presentations called “Innovate to Accelerate,” conducted by SAP executives. Topics included: Engaging Your Workforce in Today’s Competitive Environment; What Your Customer Is Really Looking For; Optimizing How You Reach Out to Your Customers; Understanding Customer Behavior in Non-Traditional Ways; and, Less Complexity Equals Better Fulfillment. These quick-hit interludes brought home the seamless technology strategies that SAP has innovated.

Scott Galloway, CEO of L2 and Professor at NYU Stern, gave an energetic, electrically charged and entertaining overview of his new book, The Four. According to Scott, the Four — Google, Amazon, Facebook and Apple — are literally “eating the world.” He provocatively compared the iPhone to Jesus Christ, stating that no other brand in the world will ever come close to achieving the unabashed reverence that loyalists and believers have in Apple. He also shamed the “Four” as arrogant for thinking that their businesses are somehow omnipotent leaders of the free world. This entitled perspective has made them believe they are above the laws and regulations that all of the rest of commerce must abide by.

Other keynotes by SAP executives and industry leaders were insightful about the new generation of consumers who are defining a whole new socioeconomic culture, totally reassessing value and values. The next gen is essentially redefining what value is beyond price. And it’s not just about new products, services or experiences. It’s about what you stand for. How you conduct business. Why you matter. And how you are helping to make the world better.

“While winning retailers have always known the importance of putting the customer first, those who evolve to holistically combine a customer centric approach with authentic branded promise across social, value, (and social value), experience, and ethics -are those who are succeeding at a greater rate now and truly defining the future “ says Laukaitis.

Today, it’s where, how and with what ingredients value is created, how it’s distributed and how it’s presented. Value is assessed by this generation as the entire holistic, personalized, and frictionless experience, all wrapped in a youthful sense of social justice.

It is critical that the entire retail community — brands, retailers and solution providers – work together to help each other plot out a future to make the retail renaissance stick. Thought leadership forums are more productive than all the brilliant theories and rhetoric of retail commentators. When you are in the same room with others who share your problems and are invested in finding answers, not more questions, the result can be transformative. I recommend that any savvy retail executive get out of the ivory tower to hear firsthand what’s keeping their peers up at night, and to contribute to the conversation that will lead the industry forward. That’s why retail forums with innovators and disrupters who have their feet on the ground are invaluable. And that’s why the SAP Forum hit its marks, and then some.

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