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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Page 30 of 43

er, and, what is perhaps most exciting, even the value of a work of art that catches the eye and the imagination of a passerby. Yes, the analytics underlying the effort will remain lin- ear, but the artistic expressions of what retailers choose to do with the data will remain 100 percent controlled and determined by the right hemispheres of our brains. New-world merchants and marketers will see their store sales floors as data-laden blank canvases and wipe them clean, again and again, until they circuitously uncover the sensory delights that powerfully answer the "physi- cal whys" of retailing. The technologies that unleash this world are already out there, too. They are right in front of us. They inter- sect to leverage the mobile phone as the remote control for the commercial exploration of the physical world. Mix one part Amazon (visual scan technology), one part Starbucks (mobile payments and on-demand ordering), one part Bonobos (inventory-light guideshops), one part IKEA (bifurcated fulfillment), and envelop it all within the umbrella of a casino (a place where we all feel like welcomed guests), and a radically new vision of 21st century omni-channel retailing emerges — an inspiring vision that runs on less working capital, that requires less day-to-day expense, and that is mobile-controlled by the customer to unlock a more personalized, cocre- ated artistic expression of retail than anything we have ever seen before. Amazon, and even Walmart for that matter, play on selection and price. Neither plays on the physical well. Amazon still knows little about stores and Walmart is, well, Walmart, no matter what Marc-las (my affec- tionate combination for Marc Lore and Douglas Mc- Million) would like us to believe. Celebrating the phys- ical and thinking of our stores as our real Product (big "P"), i.e., as the business we are all really in, through data, creates a niche within a realm these two jugger- nauts do not yet understand. So, let Amazon and Walmart duke it out on price for their share of our couch time. My money is on the retail- ers who saddle up to the bar and drink from the cocktail of the new flywheel of retail and the technologies that enable it. Shaken or stirred, right-brained, Dylanesque experimentation with the cocktail (like so many things in life) will lead to new roads of discovery. Omni-channel retailing is not about data for data's sake. It is about leveraging data to create nonlinear physical expressions of art that give us a more proba- bilistic understanding of the real reasons people want to go somewhere — the real reasons why people will al- ways desire to "feel" something physically and emotion- ally and to engage their senses, both in the present and in looking back fondly within their own memory banks, in ways they never could realize left solely to the cozy confines of their homes. R PUTTING THE NEW FLYWHEEL INTO PRACTICE Science is, of course, important, but what should scare the HELL out of the enginerds of e-commerce, who have no experience merchandising physical spaces, is that omni-channel retailing is nonlinear. Omni-channel retailing is "always-on." It is geometry gone wild. It is neither brick-and-mortar retailing, nor is it e-commerce retailing. It is a reverse-engineered bicycle, where if you want to turn the bicycle to the right, you need to turn the handle bars to the left. No one knows how to ride this new bicycle yet either, so we need to learn how to ride it as fast as we can and be unafraid of scraping our knees. The new flywheel is our training manual. This flywheel, alongside advances in technology, unleashes a new world in which retail sales floors become analytically analogous to e-commerce browsers and capable of being analyzed as such; a world in which the activities that occur on our sales floors can be thought of as major regression analyses, where, all things being equal, we can know what experiences, what products, and even what sales associates drive the most comparative value in our stores day in and day out. Our stores will become, from a data perspective, like multiplayer video games, in which the consumer is the main player character and everything else around the consumer (e.g., the shelves, the products, the sales as- sociates, etc.) will act as the nonplayer characters with- in the game. Like video games, our stores will become feasts for our visual senses — our eyes, our ears, our nos- es, our mouths, and our fingertips. We can imagine a world then, where, all things being equal, we will be able to understand the value of dining within a retail experience, the A/B financial value of a product being placed in one part of the store over anoth- NEW BUSINESS FLYWHEEL Sales/ Profit/ Community Investment Data Omni-channel Experience Traffic Partnerships Lower Cost Structure Pricing SOURCE: RETAILEXECUTIVE.COM JANUARY/FEBRUARY 2018 31

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