This year’s Retail Business Technology Expo (RBTE), held at London’s iconic Olympia Exposition Centre on March 9-10, was actually three shows in one: the retail technology event, the Retail Digital Signage Expo, and the Retail Design Expo. Taken in total, the event was a cornucopia of solutions focused on one of the retail industry’s biggest to-do’s: modernizing the store.
That focus on the store was reflected in RSR’s most recent study on the state of the store (Empowering The Store Employee, July 2015), where we stated, “In recent years, the omni-channel world has turned retail on its ear. But after all the innovation, retailers have spoken: “the store is back…”. And because London is one the world’s great — and most competitive — centers of retail, the city’s retailers are leading the way when it comes to blending the digital and the physical into visually exciting and information-rich shopping experiences. So the RBTE event was perfectly positioned as a showcase for what retail stores could be.
In addition to the expo floor (which had expanded by about 50% from 2015), the event also featured two full days of conference presentations from retail thought leaders from the UK and Europe. I had the opportunity to chair tracks on both days, and to learn from an interesting variety of industry leaders what companies are doing to bring digital capabilities into the physical world of retail. The challenge that retailers are responding to of course is what most in the industry now accept as the-way-it-is: consumers begin their shopping experiences outside the four walls of the store, using information provided by digital (and usually mobile) technologies to guide them to the best solutions for their lifestyle needs.
The state of the consumer was summarized well by one of the speakers, Terry Duddy, who is currently a non-executive director at Debenhams, the former CEO of the Home Retail Group, and one of the principals in the development of the e-Commerce channel at Argos, one of the UK’s busiest and most highly regarded retail websites. Mr. Duddy outlined how consumers today have more disposable income, are more confident, are happy to shop across channels, and are more selective — but less loyal. He pointed out that while the state of the consumer is much more positive than one might pick up from the daily news cycle, people have retained the smart shopping habits that they developed in harder times. Armed with their mobile devices, consumers today routinely do product comparisons and price checks as a part of their shopping journey using their digital devices. But the speaker pointed out that the fact remains that in spite of all the fear-mongering that the store is dead, online penetration is not as much as thought; while online sales represented about 7.3% of total sales for the UK in 2009 (just before the mass adoption of smart mobile devices), the growth rate of non-store has been slow and store sales are expected to be 87% of total sales in 2019. In other words, Mr. Duddy said, “the store has an important role to play! But today, we must be a digital company … with stores.”
That point of view was shared by another speaker, David Wild, the Chief Executive of Domino’s Pizza. Stating that the company’s vision is to be “the number one pizza company in the world – and in the neighborhood”, Mr. Wild identified online growth — and in particular the mobile channel – as the key driver in a period of explosive growth. The speaker identified three key realities that retails must internalize. First, convenience is king, or as Mr. Wild put it, “easy is the new loyalty”. Secondly, the customer is in control. In the case of Domino’s, that means giving consumers control of the fulfillment process, for example with a design your own pizza capability. Finally, value is top-of-mind (RSR has been promoting this notion for some time, that for consumers “value” is defined as “relevance” to the lifestyle need being fulfilled).
Mr. Wild described the imperatives that his company is addressing in today’s environment, proclaiming that “the world has not changed… it’s changing! The trend toward the use of emerging technologies is accelerating.” Said the speaker, “new competitors don’t challenge us, they inspire us!” He further went on to say that retailers need to look beyond their narrow verticals towards other businesses such as financial services, travel and hospitality: “No matter where a good idea comes from, you can still steal it!”
Implications For Retail Leaders
So, what should retail business leaders make of all that they heard and saw at RBTE 2016? Domino’s CEO summarized the implications for retail executives in an omni-channel world this way:
- Be a learning leader; don’t let your experience act as “blinkers” — maintain a wide purview and look beyond your direct competition
- Think like a customer; talk to digital natives
- Use data to drive decision making in active ways
- Accelerate change — don’t resist it
- Update the company’s infrastructure boldly
- Be open to new idea; accept failure risk — but learn how to fail fast
- Understand cyber risk — be prepared!