A discussion with Michael Forhez
A new decade means new predictions, especially across industries experiencing technological change. No industry may be more familiar with such change as retail, where a constant of battle for capturing customer attention and a focus towards in-store experiences are top of mind for leaders.
Where are things now headed with a new decade? What will customers want in the next few years? How can retailers adjust? To separate truth from fiction, we interviewed Michael Forhez, Oracle’s Global Managing Director for Consumer Markets, and here’s what he had to say:
As the decade ended, holiday retail sales during 2019 grew 4.1% over 2018. However, online and other non-store sales were up a whopping 14.6%, according to the National Retail Federation (NRF). With these trends in mind, Michael, what are your thoughts as we enter the next decade?
MF: The 2019 holiday sales data indicates that technology has certainly enabled consumers, with businesses simultaneously changing the way they think about the very fabric of the consumer markets, from a cultural and consumption perspective — on both a local and global scale.
Breaking it down for global economies dependent on consumer spending; 68% for the U.S, 56% the EU, and 48% for China’s Gross Domestic Product (GDP). In 2020, the U.S. will have an estimated 270 million smartphones, 60 million smart wearables, and another 75% of households will have smart speakers. Internet household penetration is forecasted 93% for the U.S. by 2023, according to Statista. If the shopping trends of 2019 hold in the years ahead, more connected customer interaction probably means more consumer-connected business models — play with more, win more!
For consumer markets, innovation is now a requisite skill, requiring the simultaneous rethinking of business strategy and business operations. The next 5 years will prove as an inflection point for both retailers and brands in the global arena as we enter an epoch where today’s ever more connected consumers are driving a customer-centric evolution/revolution. We are now in an era where single years are being equated with decades of change, and with it, a Fourth Industrial Revolution that will outpace all previous means and methods based on fabled business models. Companies that fail to adjust are now growing obsolete, if not irrelevant.
As history has also shown, technology enabled change doesn’t crawl … it jumps. To stay in the game, leadership must come to terms with this era’s rapid process of change inside a multifaceted, multi-cultural and technological global economy.
Therefore, and as we have discussed countless times, brands must accept that they can no longer sell what they make, but rather make what they can sell. Similarly, retailers must accept that they can no longer sell what they bought, but rather buy what they can sell. The technology-enabled consumer is now in charge as never before, with opportunities for companies who are bold and nimble enough to take advantage.
Ok Michael —So what does the future look like to you?
MF: I believe much will be decided during the next 3-5 years, and within a framework defined by 5 Forces and 5 Trends.
These 5 Forces are distinct yet highly correlated technologies. As they become connected and capable of speaking to each other 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 5 Forces described above will combine and enable brands and retailers to optimize their customer relationships while operating leaner and with better decisions on inventory management and pricing optimization. The ability to communicate among trading partners and with customers, more efficiently and effectively, will make personalized offerings, at the speed of thought, the new normal. Creating frictionless, on-line 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:
In closing, as William Gibson forecasted in January 2012 “The future has arrived — it’s just not evenly distributed yet.”
Hail the consumer!
Michael Forhez is Global Managing Director for the Consumer Markets Industry Solutions 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 engaging with various stakeholders to better understand and reflect their collective requirements.
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