With a blink of an eye, Q1 has ended and April has arrived! All businesses, and retail, in particular, have seen a significant disruption in their operations as the shutdowns from the pandemic officially turn a year old. Moreover, the retail revolution also continues from before the pandemic as brick-and-mortar stores, late to the digital revolution, continue to shutter stores as consumers flock online.
But that’s not all. The environment of business also continues to change, especially as retail leaders navigate the brave new world of workforce health and safety, diversity and inclusion, and learning—all in the spirit of an evolving customer base and changing tastes. These times are exciting, if not a bit challenging!
To explore where retail goes from here, we sat down (virtually) with Michael Forhez, Oracle’s Global Managing Director of Consumer Markets. He’s had the ear of retail leaders before the pandemic began and here’s what he had to say.
Albert: We’re through the first few months of the year and past some of the now-virtual conferences, including the National Retail Federation and the Consumer Electronics Show. In both, we’re seeing a lot of continued discussion around retail agility as it relates to running the business and managing a workforce. What are you seeing on your end?
Michael: This past year required significant adjustments in the back office and on the shop floor as retailers worked to adapt to shopper expectations and behavior changes due to COVID-19 and several other disruptive factors. Both retailers and brands had no choice but to pivot to new models that collectively sought to understand and interact with customers in a new, fast-evolving and distinct environment. An environment few, if any, could have foreseen.
Brands are reimaging their product portfolios. Traditional retailers are bolstering e-commerce efforts and creating new digital experiences. Digital natives are exploring ways to engage customers and drive growth. All parties are collaborating to reconfigure for a more resilient and reliable supply chain.
Albert: Last year, we spoke about the Five Forces and associated trends driving retail. In many ways, every industry seems to have jumped ahead five years because of the pandemic. Where do you think retail can still evolve, and what areas have reached what you predicted?
Michael: In February of 2020 our Blog, 5 Years | 5 Forces | 5 Trends, provided a contextual thought scaffold for what’s driving transformative initiatives. In light of all that has happened since I think these are worth revisiting today.
The 5 Forces are distinct yet highly correlated technologies. As they become connected and capable of ‘speaking' to each other, through Autonomous Data Platforms, they will utilize deep learning, natural language processing, image recognition, and neural network-driven decision-making in ways that will help them understand each other, and us, almost if not entirely in real-time. Advantage, consumer.
The above described will combine and enable brands and retailers to optimize their customer relationships while operating more cost-effectively, and with better decisions, on inventory management and pricing optimization. The ability to communicate more efficiently among trading partners and with customers will make personalized offerings, at the speed of thought—the new normal. Creating frictionless, online, and in-store transactions will become table stakes for everyday customer engagement. And, finally, the 5 Forces will enable global brands and retailers to be local, with local brands and retailers better prepared to go global. Consider:
The retail sector increasingly needs a strong autonomous data platform to collect different data types, including structured and unstructured, 1st party, and 2nd party anonymous data from various sources in real-time. (Note, industry watchers, estimate that 1.7MB of data will be created every second for every person on earth by the end of 2020. Walmart is in the process of developing the world's most extensive private cloud system, which is supposed to have the capacity to manage 2.5 petabytes of data every hour.)
The significant challenges retailers face include the requirement for creating a frictionless experience that necessitates the updating of personalized consumer information (wants / needs) in real-time. Since autonomous data platforms and services are unique in their ability to help efficiently address these challenges, their adoption by retailers is expected to increase in the coming years.
Currently, there are multiple examples of evolving projects in both AI and Anonymous Data Automation, covering supply chain challenges and collaborative rework for data sharing projects, including:
Albert: Let’s talk a little about the worker. We know that many retail employees were disproportionately affected last year by pandemic shutdowns and some have yet to return. What will happen to those affected and what technologies are being created to ensure that other disruptions won’t have such a significant impact next time?
Many organizations were already gearing up for the new and ‘different’ future-of-work. However, an evolutionary process suddenly became a forced revolutionary process. Abruptly, companies realized they must seek to genuinely connect with, reassure and support their employees in ways that heretofore were deemed unnecessary. Turns out the well-being of associates means something after all.
For most leaders, managers, and organizations generally, this has been a “learn-on-the-go” process. Many companies are therefore reshaping approaches from ones that historically were designed to maintain an essentially static organizational structure to one that has an AI-informed capacity and capability for updating enterprise-wide and department strategies while delivering appropriate personalized communications.
Employees now want an enhanced communication experience as well as clear, concise, and relevant content to manage their work. Today’s associates expect their leaders and managers to provide the information and insights to get the organizational ‘fit’ for supporting ongoing change … to guide the learning agenda … to allow for both curiosity and agility … to provide a vision and pathway for rapid learning, re-skilling, and up-skilling, all through a platform of personalized, authentic, reasoned, and open sharing.
Today’s better informed, empowered, and progressive leaders need to be rightly equipped, aligned, and capable given that they are the ones their direct and indirect reports depend on to set and deliver on the expectations of executive management and those customers the business seeks to serve. Even in an increasingly automated and digital world, we have come to see that humans are still a powerful key to success.
Industries historically adjust to the evolution of their technologies—Smartphones, 5G, IoT, Big Data, Smart Data, and the rapid digitalization of virtually every aspect of the economy, (now approaching the ‘network effect’) meaning that the economy is melding into a combination of physical and digital and is increasingly autonomous. Device to Device. Algorithms to Algorithms. Servers to Servers. Cloud to Cloud. Always on Communication. The world of brands and retailing is no less a vast set of arrangements and actions that are dynamic, proactive, and reactive and therefore must also adapt…at a speed most, if any, expected or were prepared for.
Customers, employees, managers, and leaders must therefore conceive and make plans for a different future. A post-pandemic future that has already and irrevocably changed the rules of engagement; globally, locally, between trading partners, and most particularly with shoppers. We don’t know exactly how different this future will be … we just know it will be very different than anything we experienced just a year ago.
Michael Forhez is Global Managing Director for the Consumer Markets Industry Strategy Group at Oracle. He brings over 30 years of diversified sales, marketing, and management consulting experience to his current role. Forhez is frequently called upon to write and speak on various subjects germane to the consumer products and retail sectors. He serves as an evangelist within the consumer markets and has committed his career to engage with various stakeholders to better understand and reflect their collective requirements.
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