by Dan Hartveld

The retail CIO’s storybook

Jun 12, 2018
CIOIT LeadershipRetail Industry

From ugly ducklings to ants and grasshoppers: three 21st century fables for retailers.

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What shape will the retail industry be in this time next year? The only thing we can say for sure is that it will be leaner, especially when it comes to frontline staff. And, as the C-suite works to build strategies which will ensure business longevity and profitability both online and in-store, it seems like a good time to revisit fables from the past which still have a message for the CIOs and strategists of today.

The ugly duckling

Hans Christian Andersen’s perennial tale about judging things for what they are not what they look like has a truth for retail at its core. While everyone’s heads seem to have been turned by a new breed of shopper-friendly celebrity – the online influencers, vloggers and trend hunters with impressive reach for promoting everything from the latest fashions to the newest superfood – retail staff on the ground are quietly getting on with their jobs, providing superb customer service and building face-to-face relationships which enable them to shine.

Anything that has an appeal based on something as fundamentally fleeting as internet fame can never be relied on as a sustainable business model. Like the latest viral videos and hot take memes, their shelf-life is limited by a medium built on immediacy and perpetual forward motion. Inevitably, in true ugly duckling fashion, the reality is emerging. A recent survey by field marketing agency Gekko showed that while 28 percent of the online influencers’ key market – 18- to 24-year olds – are swayed by the opinion of vloggers and bloggers, most actually prefer getting a personal service and recommendations from in-store staff. A report by the BBC’s business team into the selling power of beauty vloggers backs this up – while they certainly have a part to play in increasing brand popularity, most customers appear to want to go shopping in the traditional sense and try out new products for themselves – in 2017 to 2018, only 20.8 percent of cosmetics spending in the UK happened online.

The moral of the story

Success for retail staff depends on hard graft – there’s no substitute for putting the hours in when it comes to product knowledge and personal service. According to Gekko, 40 percent of 18- to 24-year olds prefer to go in-store to see, touch and experience a product before buying, and this increases to 58 percent for the over-55s. As its Managing Director Daniel Todaro says: “The shop floor is clearly still winning in considered purchases, therefore [retailers] need to invest in making the experience as good as it can be.”

The moral for CIOs is to make sure they don’t clip the wings of their best assets by denying them the information they need to make the in-store interactions that customers clearly crave easy, comfortable and profitable. A commitment to data democracy and device-based intelligence is the way to let them show their true colors.

The three little pigs

For CIOs seeking long-term, sustainable ways to make their retail workforce more profitable and cost-effective, there’s no doubt that the Big Bad Wolf is AI and automation. According to a House of Commons briefing paper issued in March this year, in the UK alone the retail sector currently employs around 5 million people – 20 percent of the total workforce. With dire predictions that automation might be responsible for the loss of as much as 80 percent of traditional retail jobs, it’s understandable that the industry is on the horns of a dilemma. On one hand, automation has tremendous potential for delivering better, faster, cheaper services when it comes to key customer wants such as stock availability, logistics and fulfilment, and will free up sales staff to offer more customer-focused and personalized experiences. On the other, it involves a wholesale upheaval of the way retail works and a significant realignment of sales staff infrastructure and management. Ultimately, the C-suite will have to embrace the inevitability of a mechanized industry and all it entails. The issue is that no one knows exactly what that will look like – the wolf is more frightening because it is faceless.

The moral of the story

As I mentioned in a previous article, whether or not the Big Bad Wolf will blow your house down depends on the choices you make about your foundations and how solid they are: 

  • Choose straw: Do nothing, continue with a strategy built for a less tech-enabled time and hope for the best – and your house will definitely not survive the onslaught of automation.
  • Choose sticks: Make some surface changes that pay lip service to staff empowerment such as allowing them to look up products online but not actually order them – and your house will stay up in the short term, until it becomes clear that there’s no data behind the devices or real commitment to empowerment behind your strategy.
  • Choose bricks: Build your foundations on a digital bedrock of useable data which will give your sales associates what they need to become trusted advisors with real power to meet customer needs, which means everything from customer profiles to inventory both online and in-store – and you’ll not only survive the wolf, you’ll tame it and make it work for you.

The ant and the grasshopper

It’s a fable that exemplifies the benefits of having a cost of delay framework – the ant is lean, agile and determined to do what’s necessary to make it in the long term without procrastinating because it knows that wasting time means losing ground, while the grasshopper is, in fact, close to being a HiPPO – concerned only with what works right now, based on personal opinion rather than evidence. When the future is uncertain – on the face of it, it looks like famine rather than feast for retail at the moment – putting the effort in now to build a different way of working will pay off. Waiting to see what others do with their employees before you take action will result in your staff being poached because they’re offered a better opportunity in more tech-aware businesses that recognize the new structure of retail jobs and value staff accordingly (attributing online sales in store, for example). 

The moral of the story

Use data to “be more ant” – gather it, harmonize it, take the decisions and do the hard work now so that you’re prepared for the inevitability of change. Data expert Bernard Marr sums it up: “Data can take the emotion and opinion out of decision-making. When you depersonalise decision-making, it’s not about you or what you think or what the HiPPO thinks. It’s about what the facts state. Build your data arsenal to cover the most important things the highest paid person will be concerned with or judged by—usually that’s the bottom line. If you have data that speaks to the highest concerns of the highest paid person, it will help drive decisions.”

Happily ever after?

These fables have endured for hundreds of years because they have truth at their center – while the retail industry can’t be described as enchanted right now, it can become a happier place if it takes these truths to its heart.