TECHNOLOGY

NRF’s Big Show: A hopeful shift in focus from Amazon to the customer

BY CSA STAFF

Every year, 30,000 retail industry professionals descend on Manhattan for the National Retail Federation’s “Big Show.

It’s a once-a-year opportunity to take the pulse of one of our most familiar industries. Amazon conspicuously abstains from the event, but it is nonetheless the focus of many conversations, distracting some retailers from the real opportunity: innovations in customer experience. Thankfully, this year a healthy shift seems to have begun.

Over the past decade, retail-focused events have become general technology events. Out are the shelving, printing and shipping vendors. In are companies like Microsoft, Salesforce, and a mosh pit of smaller Silicon Valley companies competing to help retailers reinvent themselves. Nowadays, the Big Show is first and foremost a tech event centered on innovation.

Given Amazon’s mammoth size, continued growth (26% year-over-year in Q3), and their staggering market share for online commerce, it’s understandable that they’re a topic of conversation in every retailer’s board room. Amazon is the pacesetter in online commerce.

But competition among traditional retailers is significant and growing, owing to their omnichannel capabilities and brand strength. Retailers are finding ways to deliver integrated online-offline experiences, services that can only be delivered in person, and offerings reflecting regional tastes and trends.

Kohl’s, for example, while seeing foot traffic decline, has grown its omnichannel business to nearly a quarter of its total online revenue. A quarter of all transaction value was either picked up in-store or shipped from a store to a consumer. Kohl’s claims that 90% of all transactions are now delivered in fewer than two days.

Despite this progress, it became clear from dozens of conversations this week that the stubborn industry focus on Amazon is dangerously reductionist. While Amazon represents the winner in a massive market shift, it is not the customer. Retailers, their suppliers, and partners must shift their focus to the underlying trends that are driving consumers into the arms of Amazon. Their deep understanding of what today’s buyer wants has enabled them to deliver a superior customer experience.

It’s easy to forget that Amazon’s rise is a response to a shift in consumer trends that has already occurred. It begs the now-cliched Wayne Gretzky adage of skating to where the puck is going to be: the winning retailers will create customer experiences that reflect an understanding of emerging trends, and apply their unique strengths to create customer experiences around them. Amazon is part of the equation, but it’s not about Amazon.

Innovations in customer experience go far beyond knowledgeable staff or clean stores. We often focus on the interaction between a consumer and a retail employee. But with today’s buyer, that’s an outdated framing of the customer experience. A far-reaching Accenture study showed that while 82% of Millennial shoppers prefer shopping in brick-and-mortar venues, they also demand a consistent journey across their online, mobile, and in-person experiences.

Amazon cannot deliver this experience, at least not yet. Leveraging the assets of brand, physical stores, and, most importantly, the intelligent human beings distributed across a retail or restaurant chain equip offline retail with both online and offline advantages in providing an experience that can differentiate retailers from the Big Bad Wolf.

What’s more, the next cohort of buyers behind Millennials, the so-called Gen Z, are yet again a different beast, bearing characteristics that play to the geographically localized strengths of traditional retailers. Surprise! Gen Z shoppers show a preference http://www.fitch.com/think/gen-z-and-the-future-of-retail for good human interaction.

For today’s retailer, the challenge is not Amazon. The challenge is correctly identifying the consumer trends that enable a next-generation customer experience, and then executing toward realizing a vision that aligns. Retailers must independently innovate around customer experiences to capture the next wave of growth. After all, every great innovation in every industry must eventually give way to the next. In retail, with history as our guide, we can be sure the next great innovator won’t look anything like Amazon.


Matt MacInnis is CEO of Inkling.

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C-SUITE

Brooks Brothers exec to head up tech at DXL

BY Deena M. Amato-McCoy

A retail veteran is leaving Brooks Brothers to join Destination XL Group.

The men’s specialty apparel retailer has named Sahal Laher as its senior VP, chief digital and information officer, effective Monday, Jan. 30.

Laher, Brooks Brothers’ former executive VP of digital innovation and technology and global CIO, will be the principal architect and leader of DXL’s digital commerce strategies and IT/MIS operations. Laher will also be a member of the company’s executive committee.

He will report to CEO David Levin.

With more than 20 years of senior operational experience focused on digital and omnichannel strategies, Laher will be tasked with taking the company’s robust omnichannel capabilities to the next level. “It’s time to leverage our seamless shopping environment with digital expertise anchored on customer interaction, online experience, and personalization to further build DXL’s brand awareness,” said Levin.

Laher spent more than three years at Brooks Brothers, where he was responsible for aligning company’s information technology investments, resources and project execution with the chain’s strategic business objectives. Prior to Brooks Brothers, Laher was global CIO at Stride Rite Corp., where he worked closely with the retailer’s executive leadership team to deliver an IT growth strategy that integrated the global supply chain across brands and geographies.

Laher also held senior strategic consulting positions at Deloitte Consulting, Andersen Consulting and Data General Corporation.

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Office supply giant names tech exec as new CEO

BY Marianne Wilson

Office Depot has named a successor to CEO Roland Smith, who previously announced his intention to retire from the company. The company also named a new chairman.

The retailer has appointed Gerry P. Smith as CEO, effective Feb. 27. Smith currently serves as executive VP and COO of Lenovo Group, a $45 billion global technology company.

Smith joined Lenovo in 2006 and was instrumental in the company’s growth to become the largest personal computer company, according to a statement by Office Depot. Prior to Lenovo, Smith held executive positions at Dell, from 1994 until 2006.

“Gerry possesses significant operating expertise, having successfully led business units across Lenovo’s entire product portfolio, including an industry recognized supply chain organization,” said Warren Bryant, lead director of the board of directors and chair of the CEO search committee. “His long-standing relationships with some of Office Depot’s largest suppliers will enable him to quickly transition into the role.”

Although Smith previously announced his intention to continue as chairman, Office Depot is replacing him with director Joseph Vassalluzzo as chairman, effective Feb. 27, according to the news release. Vassalluzzo joined Office Depot's board in August 2013 and is now Chair of the Finance and Integration Committee. He was previously the vice chairman at Staples.

Smith joined Office Depot as CEO in 2013, just after the company completed its merger with OfficeMax. The chain has been struggling to reposition itself since its merger with Staples was called off amid antitrust concerns.

“Roland has been an outstanding CEO and, on behalf of the entire board, I’d like to express our sincere appreciation for his leadership,” said Bryant. “He has consistently delivered positive results, led the successful integration of Office Depot and OfficeMax to achieve synergies and efficiencies significantly exceeding original expectations, and he created and implemented a new three-year strategic plan. As a result of his contributions, the company is well positioned for continued future success.”

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