There are a lot of naysayers around these days, particularly aimed at the big box and department store models. And I would usually tend to side with them. In fact, many times I have been way ahead of them with my predictions of gloom. But this time I believe I’m ahead of most of them in predicting a positive mid- to long-term outcome for Walmart, Target, Kohl’s, Macy’s and Nordstrom. They have been navigating through retail’s perfect storm: the simultaneous merger of a profoundly new consumer culture and the “technology revolution,” exacerbated by a crushing over-capacity that has been continuously mounting over the past half-century, driving deleterious price deflation.

Most of the critics liken retailers’ technology initiatives to throwing spaghetti at a wall to see what sticks. In other words, they impulsively patch together a bunch of whizbang gizmos, gadgets and short-term tactics in search of a strategy. “Window dressing,” as some call it, will not strategically transform these old-world models into the necessary new models required for success.

In context, we need to remind ourselves that we are merely in the first inning, just out of the starting block of a marathon or just heading into the early gusts of the perfect storm. And, yes, it could appear that all of the giant legacy guys are being pressured into a frantic search for quick answers for fundamental change and success. And this would lead the naysayers to accuse them of randomly adopting tactics to see what works in the short-term without a longer-term visionary strategy.

The reason I am now a naysayer against the naysayers is that I have spent time talking to, and following the leaders’ words and actions, particularly of these giant legacy retailers. And I would agree, like Amazon, they are all trying/testing many different concepts, innovations, out-of-the-box thinking and doing. And they’ve organized “innovation incubators” headed by radical thinkers and doers with full support from the top to try on many new ideas fast and faster — to gain traction or die quickly.

However, in my opinion, these are not random tactics. The leaders of these companies have a very clear idea of how they must transform for the future. They understand the new consumer who does not need and/or want buildings full of stuff. Thus, the need for elevated shopping experiences and spinning off into small neighborhood models. These leaders understand that personalization is now possible through technology. They understand the need for a seamlessly integrated online and offline distribution and logistics capability, speedy and free last mile delivery or easy pick-up in stores. They understand the concept of platform sharing. And they understand and are continuing to understand the ongoing stream of augmented reality technologies that can become a huge part of brand new shopping experiences. They also understand that the internet and mobile devices have erased siloed channels of distribution. It is now a democratized marketplace.

Finally, not one of the CEO’s of these companies, or any of the C-and senior level executives I have talked to even imply the clichéd statement, “if we just do the same things we’ve always done, but do them better, we will succeed.” They have organized and re-organized around all of the above strategic necessities to achieve their vision. And even though we are just entering at the early stages of the perfect storm, they are now past thinking and talking. They are walking the walk…and doing.

Speed and Culture

Having now stated my personal opinion, I can’t wait to hear from my naysayer pals. However, there are two huge caveats to my prediction: speed and culture. Having said we are just in the beginning of a long and painful journey, it must not lull the captains of these big ships to methodically power through it. Metaphorically, they must go full throttle through the entire distance. However, even if they can power up for the entire journey, they do not know how fast they must go, because they don’t know where the journey ends – if indeed it will ever end. And the obstacles along the way are the impacts of technologies not even invented and the wildcard of unpredictable consumer behaviors. But speed forward, they must.

Most importantly, and the biggest test of the CEOs’ leadership capabilities (even if the strategies and all of the tactics are spot on for achieving their vision) is to see if they are able to shift their old-world cultures. These cultures are loaded with embedded beliefs in how things should be done with politicized siloes and bureaucracies. The test is to shift into the flat, de-siloed, agile, rapid decision-making, innovative and empathetic new world culture. If not, they will fail. Adding a credible exclamation point, Michael Gould, former CEO of Bloomingdale’s recently said, “People must never forget that culture trumps all. Culture eats strategy for breakfast!!!”

Another way of reframing the conversation: We used to say it’s all about product, product, product or location, location, location.

Today it’s only about culture, culture, culture. Amen.