Building An Adaptive Retail Enterprise For Day 2

The Retail Transformation video conference roundtable took place, March 24, 2020, shortly after governors across the country were ordering people to stay at home to fight the spread of the new coronavirus. As we venture into the recovery phase of this crisis, with several states opening up their economy, the media is rife with predictions of a future that none of us can be certain of. However, many experts and business leaders believe that this chapter will accelerate the pace of digital transformation, align business and technology behind common strategic objectives, and determine the winning and losing consumer brands of our time. In this context, consumer-driven organizations that innovate to scale, invest in resilient supply chain technologies and nurture ecosystems of trust will emerge stronger.

These were some of the leading points expressed during a virtual roundtable on Retail Transformation that I moderated in March with FedEx EVP, Chief Marketing & Communications Officer, Brie Carere; Tractor Supply Company SVP, Ecommerce, Letitia Webster; and IBM General Manager, Consumer & Travel Market, Gina Claxton. 

Innovation that Matters

With technology innovation taking centerstage, consumers, shoppers, and travelers have unlimited ways to engage with brands holistically within their lifestyle, often demanding experiences, products, and services when and where they want it.

Brie agrees that this movement for brands to connect with people’s lifestyles will continue and “retail will be very, very different. You’re going to see digital platforms and connectors help the brands emerge and have that direct relationship with customers,” she said. “The winners will be those that have a more curated inspiration and learn to go to market differently, given we do think that there will be a huge play for voice-to-purchase, whether that’s through your phone or through an ecosystem in your home.”

Letitia stressed that 5G, for example, will be very important to Tractor Supply, especially with mobility, self-assisted shopping, and voice commerce. The key will be having technology assist in the consumer’s life and living their rural lifestyle. She shared, “Technology is going to continue to integrate itself into how we interact with customers and what the experience looks like. How they get information should be very specific to what they want to achieve.” 

Gina agrees that technology has the power to create even more differentiating and personal experiences, but also believes that the future will lie in platforms that can scale effectively. “Where and why to innovate is really as important as how to execute the ideas, and making sure you have prioritized them and aligned to a business case that enables the overall strategy…then determining how to scale and accelerate those ... that’s really what most companies are trying to figure out right now.” Addressing this topic further, Brie shared her point of view on scale by asking “Is the hypothesis big enough?” and discussed FedEx’s “Path to Scale” philosophy, which is based on the premise that agility is defined by speed to value and that there is no value without scale. “This is the prioritization framework that enables FedEx to drive quick deployment across more than 220 countries with agility."

Resilient Supply Chains

Supply Chain systems often define an organization’s ability to deliver on its brand promise at scale. All our panelists had a lot to share on this topic from same-day delivery to real-time visibility. 

Gina pointed out, “Consumers can now know literally from the source to the consumer, everything about the product; if it’s food, the temperature all along the way. We’re doing some projects in the food space in this area. This helps convert supply chains from centers of cost to centers of competitive advantage as customers are willing to pay for transparency." She also referenced the logistics business, FedEx. “What’s happening to the packages from Point A to Point B? You can track that and share key data points along the entire supply chain, across all the entities involved. Therefore consumers can build trust with brand transparency - whether they’re concerned about fair trade, the environment, or health - whatever their priories are. They can trust the product. Consumers are willing to pay more for products that come with these insights. So I think there will be more investment in enabling this transparency over the next few years.”

Brie said FedEx has a platform called SenseAware that tracks factors like temperature, humidity, barometric pressure, and applied shock all along the delivery route. She expects that the healthcare applications would be “rapidly accelerated especially in a post-COVID world.”

Another area that Brie expects to be accelerated in the wake of the pandemic is e-commerce and same-day on-demand delivery. “Incredible innovation is same-day, which compounds a trend we’ve already seen. That’s why we’re so excited about Roxo, which is a same-day on-demand delivery robot … because we know there’s a huge untapped market for pharmacy, for grocery, for food on-demand."

Trust as a Competitive Advantage

Every panelist agreed that the current crisis will accelerate the digital/physical integration of the retail experience. Letitia said, “The current [coronavirus] situation will change the retail entity even more so and how many retailers will come out on the other end of this … speeding things up by five or six years.” She added, “Five years from now, I think e-commerce will be very much an on-demand local experience, and I think the winners from a retail perspective are going to have mastered the experience across physical and digital.” 

This integration of physical and digital will put a premium on brands that are able to collect, analyze, and unleash the power of their data to unlock new revenue models. Brie points out that decades ago, FedEx Chairman Fred Smith coined the phrase “the information about the package is as important as the package itself.” Gina talks about the idea of HyperTrust between suppliers, distributors, retailers, and consumers.  “As consumers demand more knowledge and insights about where they spend their dollar, they want to align with brands that share their values and interests. Especially in the context of COVID-19, it’s becoming even more crucial to build these capabilities.” 

As Maya Angelou once said, ”You don’t know where you are going unless you know where you came from.” Brands and retailers have always had one core mission – to serve their most important stakeholders – the consumers. Technology innovation, world events, generational shifts in values put pressure on traditional business models. In order to build for the future, retailers and consumer brands will have to bridge from their past. In Gina’s words “the key to unlocking innovation is really about removing the cost and complexity of the old legacy business processes and systems and replacing with the agility to capture the demands of the adaptive enterprise.”