Show Notes | S4 Ep 7 | Retail Media | A Conversation with Francisco Larrain

SHOW NOTES | S4 Ep7

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Retail Media, A Conversation with Francisco Larrain

SPECIAL GUEST: Francisco Larrain, CTO at TOPSORT

 INTRODUCTION

In a follow up to our final Retail Trend, Retail Media Networks, we share a rich conversation with Francisco Larrain, CTO at Topsort, an innovative tech company that enables retailers and marketplaces to quickly launch, scale and intelligently optimize ad businesses with AI-based retail media infrastructure. We couldn’t ask for a better way to follow up on this incredibly relevant topic in the Retail industry today.

THE CONVERSATION

We stepped away from our usual format and had a free-flowing, unstructured conversation with an expert who is living Retail Media. It’s a surprising conversation, one with real, relevant insights. This is a conversation about RETAIL MEDIA with Francisco Larrain, CTO at TOPSORT.

We’re stepping away from our usual format regarding Show Notes as well. As this was a very loose conversation, we encourage you to go along for the ride. Reach out if you have any questions or would like to share comments or feedback.

We encourage you to connect with Topsort, and specifically with Francisco Larrain. You’ll be better for it.

Let’s go shopping!

                                                                                                                                                                        

This is RETAIL DONE RIGHT.

 RETAIL DONE RIGHT is produced, written and hosted by Jeff Fisher & Cristene Gonzalez-Wertz

Show Notes | S4 Ep 6 | Retail Media | The New Frontier

SHOW NOTES | S4 Ep6

Retail Media | The New Frontier

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INTRODUCTION

The sixth, and final, episode of our mini-series is titled, Retail Media. We discuss this new frontier. These brand or company-specific networks allow a brand to create media experiences across the customer journey (online and offline) while creating an entirely new high margin revenue stream via advertising.

INDUSTRY UPDATES | Our New Segment

This is our new segment for Season 4. We highlight and discuss recent retail-related news.

  • Store Closings:
  • Bankruptcy Updates:
    • .99cent ONLY stores are closing. They’ve filed for bankruptcy and going out of business. They’re blaming shoplifting and inflation. I’d add poor management, poor strategic decisions and poor store experiences.
    • FAMILY DOLLAR (Here’s the link to the related story we referenced about a rat infestation at a Family Dollar store)
    • JOANN
    • KROGER & ALBERTSONS commentary by Cristine relates to this article
  • Articles referenced in our conversation about Brandy Melville are here, here and here
  • Sustainability conversation regarding Ulta, Sephora and REI
  • BNPL: We referenced this article and this one and this one specific to Walmart.

THE CONVERSATION

We jumped right into the heart of the topic by referencing an article Jeff shared with Cristene on yet another new Retail media Network – SAKS Fifth Avenue. Cristene discussed that Saks has a very affluent set of clients, including some perhaps aspirationally affluent. So, if I’m Lexus, or BMW or Audi, and my regular media opportunities are drying up, being atop the SFA website might not be a bad fit. The challenge is, as the media landscape shifts around us, getting messages to consumers – relevant consumers – in relevant places – becomes harder. You need locations and content.

Walmart recently purchased Vizio. Why? As CNN reported, “Vizio’s Smart TV operating system, SmartCast, has more than 18 million active accounts. The deal would give Walmart more ways to offer ads through Vizio televisions, as well as create entertainment options exclusively for customers with Vizio TVs.”

Jeff spoke about the rise of in-store media networks and screens. When shoppers see screens in the endcaps of their local market, it’s clear change has gone beyond the phone screen. According to eConsultancy in March, Tesco has been equipping its stores with 1,800 in-store screens across 420 stores, up from 400 screens the previous March.

Jeff commented that he finds the in-store interaction to be among the most valuable for retail media networks. First, it connects all the experiences for the customer. Second, it’s easy and connection – you can have the product right next to you. And third, it closes some of the gaping holes in the shopper experience.

Cristene referenced the IBM IBV’s latest report for retail: the In-Store Experience Lacks Luster: Despite a preference for physical stores by 73% of those surveyed, only 9% are satisfied with the in-store experience.

At this point in the discussion, we took a step back and defined Retail Media Networks.  Cristene shared that Retail media is marketing to consumers at or near their point of purchase, or point of choice between competing brands or products. Common techniques include in-store advertising, online advertising, sampling, loyalty cards and coupons or vouchers.

 

Substantial growth is driven by several factors, use of digital platforms by consumers and the high profitability of retail media operations, which offer over 50% margins compared to traditional retail​ (Bain)​. The evolution of retail media networks involves significant strategic, organizational, and technological changes, underscoring the necessity for retail companies to adapt to remain competitive in this rapidly expanding market​ (Bain)​.

This is a place where ubiquitous screens leads to everything being an advertising opportunity – some much better than others. Amazon making already dense pages on their site even more dense certainly allows them a chance to capture revenue, even if they’re taking you offsite, but more often than not, it’s simply a redirect to another area of their ecomm platform.

Jeff referenced the Interactive Advertising Board (IAB) launched a working group around in-store in particular, building off of their January report. “Physical stores represent the next major media channel for brands, with leading omnichannel retailers experiencing 70% larger in-store audiences compared to digital,” said Andrew Lipsman, independent analyst at Media, Ads +Commerce.

Cristene shared a gripe that we view it as another revenue stream as opposed to a better path to customer interaction and longer term engagement. This can be a powerful loyalty approach.  If you blend your tech, and add mechanisms of measurement in experience – for instance a QR code to take you to a recipe, a link that allow you to view custom content later, a folder where you can store your interesting ideas (such as outfits and color swatches), this to me is the real promise.

Jeff shared some statistics from Tinuiti regarding Walmart, Target Roundel, Kroger, Albertsons, Home Depot and others.

 

Cristene ended the conversation with a dive into the Retail Media Tech Stack. A DSP, a demand-side platform, allows an advertiser to buy digital ad space and manage advertising campaigns. Through retail media networks, advertisers can place programmatic ads.

Retail media networks are typically managed by the retailers themselves but can be managed by third parties. A fair amount of data science and AI is being baked in to allow more specific targeting by geo, store level, related queries and search.  Companies like Criteo bring predictive bidding (shopper valuation), recommendations and a shopper graph (think extended profiling) alongside trend data, ad formats and other hyper-usable tools into a common platform. PromoteIQ is the Microsoft bundle of services – and the one I’d expect to have the strongest AI toolkit over time. Integrated video, ratings and other features are generated from component vendors when not baked into platforms. The challenge for buyers is whether to go native or use an agency who can deal with the sizes and formats, tagging, metadata, and a host of data and details.

We’re confident RMNs are here to stay and we’ll keep an eye out for updates.

HEROES & CHANGE MAKERS

Cristene selected Christina Tosi of MILK BAR.

Jeff selected UNCRATE, the leading – if not the best – buyer’s guide for men.

Let’s go shopping!

                                                                                                                                                                               

This is RETAIL DONE RIGHT.

RETAIL DONE RIGHT is produced, written and hosted by Jeff Fisher & Cristene Gonzalez-Wertz

Show Notes | S4 Ep5 | Talent Management Requires New Thinking

SHOW NOTES | S4 Ep5

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Talent | Talent Management Requires New Thinking

INTRODUCTION

The fifth episode of our mini-series is titled, Talent. We discuss all things talent and talent management where new thinking is required.

INDUSTRY UPDATES | Our New Segment

This is our new segment for Season 4. We highlight and discuss recent retail-related news.

  • As a follow up to our last episode, DealBook reported on the ESG exodus. I quote, “The money flowing out of E.S.G. funds has gone from a trickle to a torrent as investors sour on a sector hit by greenwashing concerns, red-state boycotts and boardroom debates.” DealBook clearly states, though, that the median return for the larger E.S.G. funds was 24.4 percent last year, according to Morningstar, which outpaced the S&P 500.
  • New Balance has launched a resale channel
  • Retail sales rose 6% in December, topping expectations for holiday shopping
  • Macy’s has been in the press a lot lately… here, here and here, just to share a few
  • Here is the link to our quote from DealBook regarding DEI
  • Cristene continued the conversation about DEI by quoting Mikelya Fournier, writing in the Robin Report.
  • According to Gizmodo, the self checkout nightmare might be ending. they note: “In 2023, Target restricted self-checkout kiosks in some stores to ten items or less. Walmart pulled the machines out of a number of locations altogether. Dollar General made enormous bets on self checkout tech in 2022, but it recently announced the project flopped. On a December earnings call, Dollar General CEO Todd Vasos said the retailer is planning to increase the number of employees in stores, particularly in the checkout area, in a major reversal of its checkout strategy.”
  • Expansion news:
    • Walmart has announced they are adding 150 new large format stores and are continuing their remodeling of existing stores, expecting to touch 650 stores over the next 12 months
    • Tractor Supply has announced their plan to open 80 new stores in 2024
    • WHSmith, which is based in the UK, is expanding into North America with 50 new locations
    • Love’s Travel Shops is expanding and refreshing a select number of existing stores.
  • The North Face and Vans parent company, VF Corp. suffered a massive cybersecurity incident at the height of the holiday season.
  • Zac Posen has taken a creative leadership role at the Gap.
  • Nordstrom is putting the spotlight on the part of the business where they started – shoes. They’re calling it, “Make Room for Shoes.” They’ve planned a series of collaborations, starting with On.

THE CONVERSATION

Cristene kicked off the discussion. This past Holiday season, retailers tried to do more with less as they hired fewer people through the holiday period than in years past. Part of it is that organizations can’t find enough talent to do mass hiring events. Finding the right candidates – one who represents your brand and themselves effectively – is no small feat.

A Bloomberg article from the fall said it best, “US Retail Workers Are Fed Up and Quitting at Record Rates: The job is more complicated than ever — and increasingly not worth the low pay. Most retailers offer little in the way of extended or complementary training and there really isn’t a work-from-home strategy for in-store retail.  So, there is extreme competition for candidates, high turnover, economic uncertainty and that’s all before breakfast.

Jeff shared that DealBook recently wrote about this recently where they reference the recent strong jobs report. Though, on the surface, news is quite positive, there are elements that are concerning.  “But that doesn’t necessarily mean workers are more prosperous. For a start, wintry weather shrank the average workweek to 34.1 hours in January. In particular, nonsalaried employees, especially those in retail, construction and the hospitality sectors, worked fewer hours, which probably ate into their pay, Bill Adams, an economist at Comerica Bank, said in a research note.”

Cristene stated that according to the WorkRise network, there are around 30 million prime age low wage workers in the US. making around $16.98 an hour or $35,000 a year. In America’s three largest cities, the average yearly rent for a one-bedroom apartment comprises at least half of that amount. When factoring in utilities, groceries, and any other necessities, earning at or below the low-wage threshold can start to look untenable.

The discussion continued…

Low-wage workers also receive fewer benefits compared with their higher-earning peers. Only 24 percent of low-wage workers have a pension plan through their work, compared with 47 percent of higher earners. A similar gap exists for health insurance: 57 percent of low-wage workers have a work-sponsored health insurance plan compared with 88 percent of higher earners.

Women make up more than half of the low-wage workforce, whereas men make up the majority of higher earners. As a result, the median hourly wage for women is more than $4 lower than for men, with women in the US earning just 82 cents for every $1 earned by men.

These gaps widen even further when disaggregating by race and ethnicity. Black women earn just 62 cents compared with white men, and Latina women earn 54 cents. The racial wage gap has been well-documented. Black and Latinx workers in lower-earning industries play an outsized role. Over a lifetime, the average white man will earn $2.7 million dollars, while a Black man earns $1.8 million, a Black woman $1.3 million, a Latino man $2.0 million, and a Latina woman $1.1 million. In fact, research has shown that every $1 in income translates to $5.19 in wealth for white people, but just 69 cents for Black people. 43% of those working in Retail are in that low wage group. Now, I understand at least part of this. There has always been the contention that retail is great part time job. In fact, I started out straightening the denim wall and ringing up tee shirts at a clothing retailer in high school.

NRF published some new research in December, called the Value of a Retail Career

Some of it is indisputable…

  • For instance: 52 Million Americans employed by retail
  • 2 Million retail job openings in the last 12 months
  • 10% of all job postings across all industries were in retail

At this point of the conversation, Jeff got on his soapbox about how Retail is an underappreciated career… He recommended our listeners go back to Season 1, Episode 8, “Retail is our Economy.” Is Retail our economy? Yes!

What industry is the largest employer in the US? Retail

  • According to the NRF, the retail industry directly employs 32 million Americans, making it the largest private sector-employer in the economy.
  • = 16% of the US Economy
  • And, 52M jobs are supported by retail. That’s 25.8% of the US economy

Cristene asked, Why can’t retailers do a significantly better job being that first stop for people, and then, while they bring in the talent, why can’t they help create more opportunity.

Walmart has created LBU, Live Better University, providing education and opportunity for associates – allowing them to move toward hot fields like cybersecurity or supply chain.  Instead of governments trying to develop these programs at the state and local level, isn’t there a model for partnering with retailers that provides talent for the store floor but dollars for people, programs, and placements to fill the gap. Walmart has scale to do this, yes. So does Starbucks – they have more than 20 pages of college classes and majors they pay for.

Cristene dared to dream. “I know mothers who would like to be able to improve their English for sure but not necessarily take college classes – but you know what would act as a talent magnet for them? Enabling their first generation sons and daughters to take classes… sometimes you have to solve for the family and not just the individual.”

And what skills do people need?

Jeff mentioned he reads Rishad Tobaccowala’s weekly newsletter. We encourage you to sign up.

CONCLUSION

Retail can do better. Be a leader regarding talent and talent management. Join our conversation. We’d love to hear from you.

HEROES & CHANGE MAKERS

Cristene selected Didier Ludot – he’s an institution in Paris – a 50 year old eponymous shop that virtually invented the category.

Jeff selected Ralph Lauren. This is a brand with a rich history, a remarkable history. This is the true definition of a lifestyle brand.  Why call them out now?  Well, Taylor Swift was wearing Ralph Lauren in her Time Magazine Person  of the Year photo. And, their recent performance has been excellent.

Let’s go shopping!

                                                                                                                                                                        

This is RETAIL DONE RIGHT.

RETAIL DONE RIGHT is produced, written and hosted by Jeff Fisher & Cristene Gonzalez-Wertz

Show Notes | S4 Ep4 The Current State of ESG & Sustainability

SHOW NOTES | S4 Ep4

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The Current State of ESG & Sustainability | Dealing with shifting perspectives

Special Guest: Juli Lassow

INTRODUCTION

The fourth episode of our mini-series is titled, The Current State of ESG and Sustainability, where we discuss shifting perspectives.

We’re joined by a returning guest and friend of Retail Done Right, Juli Lassow.

INDUSTRY UPDATES | Our New Segment

This is our new segment for Season 4. We highlight and discuss recent retail-related news.

THE CONVERSATION

Juli Lassow joined us for a rich conversation on the state of sustainability.

Cristene kicked the discussion off by asking Juli, “Where have retailers made meaningful gains in the last 12-18 months? I see the tight integration of supply chain and sustainability being one of the easiest ways to make progress – what do you think?”

Juli shared that there’s been some progress over the past 12 months. A few trends:

Greenhushing was discussed. Juli explained that Greenhushing is essentially the idea that an increasing number of organizations that have sustainability plans and science-based targets are keeping quiet about their progress on these plans.  They’re going green,  but have “gone dark.” The term comes from the sustainability consulting and advocacy firm South Pole.

Cristene spoke about the human side of sustainability too. Because we often only talk about the environmental piece and I think sustaining businesses, the planet and HUMANS as well is important. You sort of need all three.

For retail, decarbonizing is about the devil in the detail – as much as a retailer can control their own actions, Scope 3 encompasses emissions up and down the value chain, from materials to the supply chain and so on to the consumer’s final use of a product.

It’s a crazy big number, especially if you include the distance some items travel to get to store shelves and the lack of sustainable provisions of those manufacturing items.

It’s scope 3 emissions that will be the big lever, accounting for 90%, and sometimes up to 98%, of retailers’ greenhouse gas emissions, according to the National Retail Federation.  And because of their vast scope 3 footprints, retailers are responsible for roughly 25% of global emissions, according to a report from Boston Consulting Group and Ascential’s World Retail Congress. – That’s from Retail Dive.

https://www.retaildive.com/news/retail-scope-3-supply-chain-carbon-emissions/626973/

Jeff shared that The Home Depot announced they are transitioning the majority  of their outdoor lawn equipment to battery-operated by 2028.

https://www.retailbrew.com/stories/2023/09/21/how-home-depot-purchase-order-green-goals

Packaging was discussed.

https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/consumers-care-about-sustainability-and-back-it-up-with-their-wallets

Cristene spoke about Prato, Italy Est. 1955, which collects used clothes such as trousers, sweaters, jackets and wool coats, separates them by color, grades the quality and transforms them back into fibers that in turn are sent to mills to create new yarns and fabric. It’s responsible for 15% of fabric reclamation. It’s considered a hub of the circular economy.

https://www.euronews.com/green/2023/07/18/italys-textile-town-is-leading-the-way-to-a-responsible-closet#:~:text=Italy%27s%20%27textile%20town%27%3A%20a,also%20a%20circular%20economy%20hub.

Jeff shared that Cristene was a co-author in a report while at DXC on driving better insights for ESG and sustainability decision making.

https://dxc.com/us/en/insights/perspectives/dxc-leading-edge/driving-better-insights-for-esg-decision-makers

There seems to be a big methodological problem with measurement and getting the data to align. There isn’t one framework and that creates an inability for people to compare progress. It certainly contributes to the consumer’s perspective of greenwashing when different approaches – unsurprisingly – yield different measures.

But those using science-based targets, such as Aldi, Etsy, Gap, eBay, IKEA, Marks and Spencer, Nike, REI and Ralph Lauren, to name a few  – those using science based targets seem to have agreed to an approach.

https://sciencebasedtargets.org/resources/legacy/2019/06/SBT_App_Guide_final_0718.pdf

Cristene responded by stating that this is hard and it requires commitment. It’s why you have to get to “ESG Business Enlightenment.”  You need to be able to get very serious around six dimensions of measurement:

  • How often -the timing.
  • What are you measuring – definitions and KPIs
  • Organizational data fluidity – such as a common platform from the Science Based Targets initiative
  • Comparability – the ability to benchmark AND using algorithms to be able to recommend adjustments and improvements much more quickly.
  • The supply chain, where we need extended transparency – seeing from sourcing to reclamation
  • Decision frameworks that enable action based on near past and planned decision data.

The big change that better data and the six dimensions bring is that you can LOOK FORWARD – and use math and science to make better forward-looking decisions.

CONCLUSION

Jeff concluded our discussion about returns. By some estimates, returning purchases in America reached record levels in 2022; the portion of purchases returned has jumped twofold, to 16 percent from 8 percent of sales between 2019 and 2022. And returning things online has become so easy — that people return items bought online at three times the rate they return things purchased in stores.

Because it’s easy and free on our end, it’s tempting to think our unwanted shoes whiz off to whichever distribution hub from whence they came. We think they’ll be refurbished and sent along to someone else.  But that’s not at all what’s happening. It’s an ugly process, where many items are dumped into a pit of despair. As is true for many things online — bullying, disinformation, conspiracy theories — when something is easy and “free,” it usually exacts a terrible, if largely hidden, cost.

https://www.fastcompany.com/90926478/free-returns-environmental-impact-retailer-sustainable-solutions#:~:text=The%20transportation%2C%20labor%2C%20and%20logistics,returned%20products%20now%20end%20up.

The massive costs of return packaging, processing and transportation are easy to imagine. But what many online shoppers don’t realize is that many returned goods don’t get resold at all.

This was originally a strategy to encourage people to shop online – but it’s getting expensive, for both retailers and the planet. We don’t have 2023 numbers yet but in 2022, we saw  $800 billion in lost sales.

The transportation, labor, and logistics involved raised retailers’ costs even higher. Items that go back to a retail location –  a store, basically – not only costs less, they can be restocked more quickly. They also have a reduced impact on the planet because they often have a shorter return trip to the sales floor. When consumers are offered information on the impact of returns, they often choose a less planet-intensive means of doing it.

We know return policies are changing. And we are seeing better methods to increase efficiencies – like Return Bar. We need to continue to improve here. But the bigger part of this is helping consumers make better choices upfront. This is another area where technology is really changing the game. But more on this in an upcoming episode.

HEROES & CHANGE MAKERS

Cristene selected STUART TREVOR https://stuarttrevor.com/ What about a clothing company that doesn’t produce any clothes?

When Stuart Trevor was asked to start a new fashion brand he replied ‘the world doesn’t need a new clothing company’. And then he thought to himself – hold it…what about a clothing company that doesn’t produce any clothes?

To quote Stuart of Stuart Trevor, “Creativity to me has always been about doing more with what we have already. The world has scarce resources, yet the fashion industry acts as if there is an unlimited supply of material. It’s a disaster for our planet. We will do our best to create clothes that people love and want to keep.”

Juli selected the leadership team at WALMART as they’ve really stepped up their sustainability efforts. When Walmart leans in on something you can really start to see some seismic shifts and reusable packaging specifically is an important consideration for consumers to move away from the idea of single use plastic. Juli loves to see that they’re leaning in on it.

Jeff selected the RETAIL INDUSTRY. We recorded this while I’m attending the NRF Big Show which is a showcase for the Retail industry. We’re adaptable. Positive. Early adopters. Always focused on the customer.

Retail is an underappreciated industry and to see this display of the depth and breadth of our capabilities, offerings, impact, it’s empowering.

This is RETAIL DONE RIGHT. Thank you for listening. And please join our conversation.

Let’s go shopping!

Jeff Fisher & Cristene Gonzalez-Wertz

Connect with Jeff on LinkedIn

Connect with Cristene on LinkedIn

RETAIL DONE RIGHT is produced, written and hosted by Jeff Fisher & Cristene Gonzalez-Wertz

Show Notes | S4 Ep3 Tech Debt as Business Risk

Show Notes | S4 Ep3

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Tech Debt as Business Risk | Your future retail strategies depend on fixing it

Special Guest: Stu Cartwright

 INTRODUCTION

The third episode of our mini-series is titled, Tech Debt as Business Risk.

While it’s called tech debt, it’s really about business strategy – and the ability of the business and the ability of all its systems to respond to customers and changes in the market.  Here are a number of articles that provide detailed explanations:  Technical Debt Skeletons and Tech Debt: Reclaiming Tech Equity and Tech Transformation in Retail and a personal favorite – an oldie but a goodie on explaining tech debt: Retail’s technical debt comes due

While retail in general is fast to change, its investment in technology systems and data sometimes lags behind. When a retailer has a dollar to invest in anything, it will go to the stores, to customer facing systems to anything but IT.

https://www.statista.com/statistics/1105798/it-spending-share-revenue-by-industry/#:~:text=In%202023%2C%20software%20and%20tech,of%20their%20revenue%20in%20IT.

In 2023, we saw retailers NEED to invest in their tech stack – whether it was the continuation of supply chain projects, or the rush to implement AI. So, IT spending as a percent of revenue was up nearly by half – to 10%. This is about 2/3 of what it is in financial services and about half of what it is in tech companies.

We’re joined by a special guest, Stu Cartwright, who has spent 40 years solving complex IT challenges.

INDUSTRY UPDATES | Our New Segment

This is our new segment for Season 4. We highlight and discuss recent retail-related news.

●        Nike sinks 12% after it slashes sales outlook, unveils $2 billion in cost cuts

THE CONVERSATION

We asked Stu to help us understand why tech debt compromises customer experience.

Stu shared that the challenge is IT needs to make sure that what they’re doing works with all the other systems in the organization. That data is safe and protected. That pricing data and revenue recognition are correct. Yet, many retailers, in the name of speed and growth end up with random tools or tools that don’t play well with each other. They solve one thing but cause breakages elsewhere. So, tech debt is incurred when businesses are using systems that aren’t optimized – harmonized – to deliver effectively. The debt part is that this patchwork of systems or older systems actually cost more to support.

  • One up, one down mentality
  • Lack of shared understanding
  • Not built for current or future generations

Here are three examples illustrating how technical debt can manifest in the retail industry:

  1. Legacy Systems and Incompatibility:  inventory management and point-of-sale systems are mission critical and once installed, they’re often locked down. But what happens when – at the holidays – your BOPIS is pegged to a system that doesn’t refresh fast enough and customers continually experience out-of-stocks on their orders.
  2. Legacy systems can lack the agility needed for modern retail operations. Maintenance for older systems can be costly and time-consuming. But the big one is an innovation tax – when older systems make it hard to integrate with new technologies.
  3. Sometimes, it’s better to leave certain technologies stand alone in the beginning. But if quick fixes or workarounds remain rather than choosing more sustainable solutions. That creates fragile, subpar systems that don’t scale or integrate well. Then, future changes or updates might require unraveling or redoing these quick fixes, consuming more time and resources.

Jeff asked about cybersecurity.  Cristene commented that research from her time at DXC Technologies found that three quarters of retailers said their modernization efforts were essential to cybersecurity and 85% said that they were looking at renovating systems so they could bring in AI and automation.

As we discussed in the last episode, the supply chain is an area of intense focus – with more than half the retail executives we spoke with pursuing projects there. Fixing tech debt is about increasing business agility. As part of the research, cost reduction, more architecture flexibility and improved business agility were selected by ⅔ of our retail respondents in the DXC research.

Cristene ended by sharing that one of the reasons Amazon can dominate retail is the speed and scale of their technical and business infrastructure. That modernization benefits them, and the more than 5 billion estimated packages they ship a year (according to Statista).

CONCLUSION

Tech debt – or a failure to modernize – can lead to:

  • Poor customer experience and stock challenges across experiences
  • An inability to understand customers and operations effectively and in the moment
  • Constraints on innovation and ability to test and scale new approaches – in fact in Cristene’s research, nearly a third said their innovation capabilities are constrained by technical debt.

Fixing tech debt is about increasing business agility. So really – the goal is to focus on modernization because customers deserve a frictionless experience including:

  • Micro-moment development and experience management
  • Profiles, personalization, preferences and persistence including accessible solutions
  • Cross-channel, cross system distribution
  • Check out preferences and next generation payments
  • Check in preferences including loyalty, couponing
  • Store interaction and media detailing (recipes, nutrition, areas shopped, requests)
  • In-journey optimization, automation and rules management

HEROES & CHANGE MAKERS

Jeff’s selection SOL PRICE.

  • Why? Jeff just want to call attention to someone who has been so influential in retail over the past 70 years. Possibly the most influential person.
  • Sol founded FedMart in the 50’s – or copied the idea. Built it up. Then, founded Price Club, which was ultimately purchased by a company we all know and love – that copied Price Club’s idea – Costco.
  • Sam Walton credits Sol with teaching him everything he knew about Retail. In fact, Walmart is called Walmart because of Sol and his FedMart. Here’s a quote from Sam: “I guess I’ve stolen – I actually prefer the word ‘borrowed’ – as many ideas from Sol Price as from anybody else in the business.“
  • He introduced the idea of discount retailing. He’s the most responsible for the membership model. His principles about how he treated his employees lives to this day at Costco. His approach at Costco with dramatically lower margins (with the savings passed onto their customers), dramatically reduced the number of skus compared to other discount or big box stores was revolutionary. I could go on…
  • Jeff doesn’t think there’s a better example of someone who put the customer first in every decision he made…
  • Jeff called attention to the podcast, Acquired. You need to dedicate time, but Ben Gilbert and David Rosenthal really do their homework. It’s a great listen…

Cristene selected FOCAL SYSTEMS. So, we’ve been conditioned to think cameras in the store are around theft or sometimes shopper metrics… but what if you pointed that intelligence – the same stuff that helps self driving cars – at making sure the shelves were stocked. As retailer talent is hard to find and even harder to keep, making sure you can point talent at delivering the best to customers – in stock, planograms and other areas is valuable. And since we are in an episode about modernization, Cristene thought Focal Systems is a great choice to help retailers get there.

This is RETAIL DONE RIGHT. Thank you for listening. And please join our conversation.

Let’s go shopping!

Jeff Fisher & Cristene Gonzalez-Wertz

Connect with Jeff on LinkedIn

Connect with Cristene on LinkedIn

 

RETAIL DONE RIGHT is produced, written and hosted by Jeff Fisher & Cristene Gonzalez-Wertz