Live from NRF: The Dismal State of Retail Technology

I’ve spent the last day and a half at the big National Retail Federation’s 100th annual conference in New York.  (No, there is no truth to the rumor that I covered the technology at the first conference, although I did learn to type on a manual typewriter in 1971 or so.)  I was one of the people behind Gartner’s designation of companies as Type A (aggressive technology adopters), Type B and Type C and as I walked the floor of the trade show and listened in on keynotes and sessions, I’m struck by how hard it is to characterize retail and many retailers.  On the one hand, technology is ubiquitous and you can’t pretend to be a retailer of any scale without a massive IT investment.  On the other hand, the ability to invest, and even more to innovate, when dealing with such tight margins can be constrained.  Netting it all out, I’m struck by how far behind the technology curve the retail industry seems to be.

A few observations from the show:

  • Peter Sachse, the CEO of Macys.com appeared on a panel run by Alison Paul, head of Deloitte’s Retail Practice.  (As an aside, this was a really well-done panel, which is all too rarely the case.  This wasn’t scripted and the panelists did an admirable job of refraining from the sales pitches that ruin so many panels.)  Sachse talked about how Macy’s is working hard to get a 360 degree view of the customer.  My take:  good luck with that.  The only person with a 360 degree view of the customer is the customer themselves.  No matter how you integrate the data you have and obtain, you will have at best an incomplete picture of the customer and at worst a misleading view.  I do, however, believe that’s a laudable goal but that retailers don’t have nearly enough vision nor understanding of the impact of social technologies to realize that vision in a meaningful way.  More on that in a bit.
  • Coming as it did a week after CES, where every gadget known to man (and lusted after by me), is shown, the show floor here is not nearly as exciting.  I mean how many booths can you see with barcode scanners or keyboards.  Yes, keyboards!  I understand they’re important to the speed of a retail transaction but somehow soft-configurable keyboards just don’t get my heart racing.  By far the most interesting booth to me was Intel’s, where they were demonstrating not some far-off fantasy retail environments but rather things that are possible today (and are already in limited deployment).   While Apple has virtually no presence at the show (they’re not here and I only saw one vendor who was hawking Mac solutions), their influence on retail interfaces is pervasive.  Everything looks like an iPhone/iPad, and that’s a good thing.  User familiarity with touch interfaces will likely lead to their much wider deployment in retail settings.
  • Everyone’s using iPads to demonstrate their wares.  It actually makes for an interesting conference experience, with the human interaction enhanced by technology rather than the somewhat sterile approach of presenters standing around their monitors and kiosks.
  • For an industry that just came through a lackluster holiday season and is facing more tough times ahead, the mood around is actually upbeat.  Whether they’re rearranging deck chairs on the Titanic or otherwise, high energy and increased attendance is actually refreshing.

Now, however, for the zinger.  If I hear one more retailer talk about “listening to the customer,” I’m going to puke.  What’s worse, generally when they say that, they mean “I’m listening for the customer to express even the slightest receptivity to getting a marketing message so that I can blast them with my multichannel outreach program.”  I have found the discussions around social media and mobility to be horribly shallow and maybe even misguided.

On the mobility front, there were actually people debating whether customer-accessible WiFi was a good idea in retail environments.  There’s a legitimate question there but the tone of the discussion was more like “do we want to enable customers to price shop while they’re in our store?”  Let me introduce you to these things called SmartPhones, 3G and 4G.  The genie is out of that bottle.  Customers do have access to competitive pricing and thus the question must become “how can we leverage consumer technologies to increase the likelihood of a purchase” or even “how can I use the consumer’s expressions of interest to sell them more stuff.”    You have to assume radical transparency and that an increasing percentage of your retail traffic is going to have good information, maybe better than the retailer has and certainly better than is known on the front lines.

And then there’s social media.  I really fear that too many — dare I say most — retailers still think of social media as a vehicle to dump messaging to customers who are eager for that messaging and have in fact invited it.  Exhibit #1:  just look at the Tweetstream for the event:  http://search.twitter.com/search?q=%23nrf11 .  Maybe I’m spoiled by tech events where attendees use Twitter as a vehicle to discuss issues raised in sessions or the news of the day, but this is appalling.  The stream is dominated by vendors screaming “come to my booth,” “win an iPad.”  Sure, @Teradata has generated a lot of retweets.  Do you think any of those people are actually interested in hearing anything from Teradata other than “you’ve won”?  I keep saying I’ll be writing about it, and I promise I will soon, but I think social media in its full expression inverts the relationship between retailer/brand and customer.  It isn’t about a 360 degree view of the customer; rather, it’s about my expressing my needs, interests and criteria, enabling people and companies to deliver solutions to me.  If you think social media is just another channel to enable you to dump marketing messages onto willing potential customers, you’ve got it way wrong.

Advertisements

3 Responses

  1. Great piece, Jonathan. Reminds me of the old Outer Limits intro “We are controlling transmission…” For over a century modern retailers had the upper hand in terms of control of how/when/what information consumers had available. Clearly, that is no longer the case.

    Long ago, the soap companies famously gave away content in the name of marketing. Today’s retailers need to figure out the new rules of engagement (some already have) or be left behind.

    -Alan

  2. Alan, I think this whole social phenomenon strikes at the core of advertising. We have always known advertising was the least credible form of commercial communication but at least we were able to do it at scale and clearly present our message in isolation. Now, social strikes at this in so many ways. Advertising isn’t in isolation but rather it’s dissected and placed in context if it’s even viewed at all. More importantly, we now have a credible channel (friends, colleagues and peers) that can achieve scale. That ultimately will be the death of un-credible sources although of course their dying will take years and decades.

  3. You highlighted the push and pull of consumer and retailer. But the 360 view of the customer as it relates to a particular store is possible. I for one go to the same stores for certain of my needs, and in this regard, it is possible for the store to use my loyalty information for targeted marketing. The in store Wi-Fi is not a bad option even in presence of other “pipes”. An instant automatic connection to store Wi-Fi for registered users of loyalty cards is not achievable through WAN broadband unless the user is constantly logged on to site, has a specific app running, or the carrier has a plug into the retailers internal systems.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: