Retail Executive

JAN-FEB 2018

Retail Executive is the trusted advisor to top retail executives from the industry’s most profitable retailers. We help retail executives succeed in their job role and grow their business via exclusive, actionable, peer-driven content.

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Data In Omni-Channel Retailing Is About Art, Not Science C H R I S T O P H E R W A L T O N Entrepreneur and former Vice President, Target Store of the Future e-commerce are the tactile feel of products and the delightful memories of being somewhere other than your home. Therefore, for retailers to survive and prosper from the "crack-up," our industry needs a new flywheel, a flywheel that enables them to compete with Amazon, a flywheel that celebrates the physical and that an- swers the most fundamental question in our business — why still come to physical stores to shop? If you are interested in a live demo or an audio ex- position of the flywheel while you exercise at the gym or as a helpful tool to put your kids to bed quickly, you can also view this video: As you can see from the diagram and/or from the video, the new flywheel of 21st century omni-channel retailing is not predicated upon selection. Rather, it is predicated upon data. Data is what will enable retail- ers to compete either against the Amazon monolith or the two-headed Amazon/Walmart Kraken. Data begets better omni-channel brand experienc- es, which beget traffic, which, in turn, begets oppor- tunities for new partnerships, partnerships that only further augment the quality of data and therefore enable the cycle to enrich itself and to begin again. In the background, a retailer's cost structure and pricing schemes augment these efforts by creating "margin" that can be funneled back into the wheel. The key here though, and what I want to state can- didly, is that DATA IN THIS FLYWHEEL IS MORE ABOUT ART THAN IT IS SCIENCE. hile good old Rhett was really speak- ing about the Civil War, his advice still rings true today because a "crack-up" is exactly what we have in retail right now. We are in a period of incredible adaptation. The question is not what will happen to retail. The pie is the pie, so to speak. The far more im- portant question is, how will the pie get carved up? Or said another way, which retailers that we know today will survive for the long term? What new players will emerge? And what technologies will play the larg- est roles in determining how the pie ultimately gets carved up? The business model of legacy brick-and-mortar re- tail existed relatively unchallenged since the 1960s. Then, in the mid-1990s, along came the apex predator, Amazon, who introduced an entirely new business fly- wheel to retail. Retailers now are at a crossroads. Amazon's flywheel is so formidable that legacy retailers are not sure how to respond. Historically speaking though, and this next fact is also why retailers find themselves in peril, physical retail stores have, for the most part, existed for five distinct reasons: 1) Inspiration, 2) Immediate Gratification, 3) Convenience, 4) Taction (i.e., the act of touching), and 5) Experience (i.e., the delight or mem- ory of being somewhere). Amazon's flywheel, predicated upon an enormous selection and convenient delivery at the press of a button, has obliterated reasons one through three. All that remains to differentiate physical retailing from W Rhett Butler in Gone with the Wind remarked: I told you once before that there were two times for making big money — one in the upbuilding of a country and the other in its destruction. Slow money on the upbuilding; fast money in the crack-up. Remember my words. Perhaps they may be of use to you some day. DATA innovation By C. Walton DATA IN OMNI-CHANNEL RETAILING IS ABOUT ART, NOT SCIENCE RETAILEXECUTIVE.COM JANUARY/FEBRUARY 2018 30

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