Recasting the retailer as technology company
“Every retailer has to be a technology company.” So said Erik Nordstrom, Co-President, Nordstrom, at NRF 2020, which took place in New York last week.
It’s a good one-liner, but what exactly does it mean Technology has, after all, long underpinned retail operations, so why is the situation today any different?
Retail is in the midst of a transformation driven by new technologies and changing consumer behavior. And leading the way is Amazon. The e-commerce giant has changed everything. Yes, it sells stuff, but it is first and foremost a technology company. It thinks differently from traditional retailers.
It won’t even let you enter its cashierless Amazon Go stores unless you’ve downloaded an app. That might baffle many traditional retailers, but it shows you how technology companies operate.
You can’t afford to rest on your laurels while Amazon, China’s Alibaba and various other digitally-enabled and data-driven pureplays power ahead.
These companies are constantly innovating. Asos, for instance, is testing out See My Fit, an augmented reality tool developed in partnership with Israeli company Zeekit.
This offers customers a simulated view of a product in different sizes and on different body types. Asos is the first retailer in Europe to trial the technology.
By clicking the See My Fit button on one of the 800 dresses involved in the trial on desktop and mobile web, people can choose to view a dress on a range of 16 models in sizes 4 to 18*.
When they select a model, See My Fit digitally maps the product onto them, taking account of the size, cut and fit of each individual garment. The resulting images appear similar to real photographs.
Another good example is Ocado. CEO Tim Steiner recently discussed the birth of the company and how the pureplay went about creating the systems to fulfil its vision. “Anything we needed to make our business work, if it wasn’t available, we’d go and create it,” he said.
“And here we are, 20 years later, with 2,000 software engineers and hundreds of robotic engineers, spending approaching £200 million every year in R&D, and still inventing.”
Faced with such competition, old school retailers are reinventing themselves. As Target CIO Mike McNamara recently put it: “We can produce technology now at a speed that was unimaginable just a few years ago, and that speed really matters.”
Already this year, we’ve seen Watsons China announcing plans to deploy Tencent’s WeChat Work platform and Cloud Stores in its 3,800 stores during Q1.
YOU MIGHT LIKE
Are shoppers ready for Amazon Go-like stores?
This is a communication channel in which customers can add store staff as WeChat friends, who then become their personal beauty consultants. If a product is not available from a customer’s nearest branch, staff members can help to order the item in the Cloud Store system. It is also possible to get orders delivered through courier, Click & Collect or Watson China’s 1-Hour Flash Delivery service.
“To retain our over 65 million loyal members as well as appeal to new customers, we have to be at the cutting-edge of retailing, and find a way to stay close with them,” says Kulvinder Birring, CEO at Watsons China.
Elsewhere, the likes of McDonald’s are buying tech startups that have made waves in such areas as artificial intelligence, machine learning, personalization, robotics and augmented reality. Basically, anything retailers aren’t inherently great at, but must master in order to compete against Amazon et al.
Last word goes to Microsoft CEO Satya Nadella, who commented at NRF 2020: “The meme of the twenties will be retailers moving to their own tech intensity.
“It’s not about taking away the art of retail. It’s about building your tech intensity. You can’t be cool by association with a tech friend — you have to be cool on your own. You have to take pride in the digital capability that you have built.”
We rest our case.