The Need for Retail Innovation

These are challenging times for retailers. While the government's tax rebate was a boon for retailers, the recent bailout plans will likely not help them. The big apparel names are reporting double-digit same-store sales declines, and even the discounters are lowering projections. Consumers seem to be focusing only on the necessities. So how is a retailer to survive this downturn?

Gymboree.JPGOne answer might be to innovate quickly. In an article in October issue of Apparel, Gymboree's CEO Matthew McCauley confidently discussed his company's ability to launch new ideas in record time. Gymboree started as a chain of play centers for preschoolers, but quickly added on retail stores for kids clothing. They use different brands and different price points to cover all the Moms out there, and hope that parents choose not to skimp on the kids when the economy is down.

To further the cause Gymboree's CIO Donald Hendricks has been focused on ensuring his IT systems can support the agile business.

"Having all of these systems talking in near real time is a big benefit for us," Hendricks says. "Even more important is that when the systems talk, it's all automatic, and not a lot of handholding is required." That means that when the customer swipes a credit card in a store, the transaction is reflected quickly and easily in the inventory system, enabling buyers to make appropriate decisions.

This could be a long, cold winter for all of retail. What will separate the growing companies from the stagnant ones will be the rate at which they can implement new ideas and be noticed by customers. The best retailers will be trying many new ideas knowing that only a few will succeed. Innovation is about trail and error, risk and reward. And its incumbent on the CIOs to enable this rate of change, which is no easy task.

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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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