After years of underinvestment, retailers have finally made the cultural overhauls and tech investments to make omnichannel a table stakes’ reality at top store chains like Target, Kohl’s and Walmart. But winners in retail have little time to sit back and admire their accomplishments because the only constant in our fast-paced world is change.
Enabling omnichannel retail was a “fundamental shift,” former Saks Fifth Avenue CEO Stephen Sadove said at the Retail Influencer Network launch event in New York City. Today, click-and-collect is a pretty normal part of a shopping experience powered as much by convenience as it is by price. “The consumer expects omnichannel—that’s the price of entry,” Sadove added. “What is the consumer expecting today [that the retailers will need to do] to win for the next three to five years? Because omnichannel isn’t going to get you there.”
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To be sure, omnichannel has laid the groundwork for levels of innovation and customer-centricity previously not possible. But the next wave of “winning in retail” will focus on unlocking data and insights through powerful analytics tools—and creating a store experience that reinvigorates brick-and-mortar for new consumers raised on digital technology and instant access to information.
Noting that adopting analytics and creating the next-gen store will be as “big a change today as omnichannel was five years ago,” Sadove said there’s no one right answer to what the future store needs to attract a new generation of shoppers. While smart mirrors like those in Rebecca Minkoff stores might work for some stores, still others will benefit by revamping product, beefing up associate ranks or other upgrades.
However, making this a reality requires visionary leadership and management committed to parting ways with the past. Investment cycles are shorter because change cycles are faster, Sadove noted. “We used to make large capital investments in a big store…and it would sit there with a lease for X number of years,” he continued. “Guess what? You can’t do that [anymore]. If you want to have experiential retail, you have to be able to do quick change jobs, quick move-overs.”
Succeeding in retail used to mean having a great merchant and excellent store personnel. Now, retailers need all of that plus supply chain experts and top technologists, former Neiman Marcus president and CEO Karen Katz said. “The people who sit around the table and have influence [have] really expanded,” she added. “The business has taken on a very different view from 10 years ago.”
Compounding the challenge of this expanding sphere of influence is the difficulty retailers face in hiring in-demand professionals with STEM and data analytics backgrounds who might not consider retail as their first-choice career, Katz added. Hiring IT and other tech talent is perhaps the biggest trial, with legacy retail business trying to compete with younger, high-growth companies offering lavish perks like stock options that vest monthly, on top of eye-popping salaries, Matt Rubel, a former Varsity Brands CEO pointed out.
“If you’re a mature company that’s in a transitional state of change you don’t have some of those compensation tools that can end up getting those people to really engage with you,” he explained.
Though good talent might be hard to find, analytics platforms such as the one offered by Celect, can help retailers close the gap with the likes of Amazon, which succeeds by flowing back product to fulfill customer-based demand rather than pushing out product and praying, Rubel noted, emphasizing the supply chain’s importance as a competitive differentiator.
But even choosing the right software isn’t as easy as it sounds. “The problem retailers have is they have limited dollars and they have to make choices,” Sadove said. “Being able to pick what is right for your company—what technology investment you want to make—is one of the hardest things because you don’t have that many people and you can’t play against everything.”
