Leading global retailers share their predictions in the wake of digital disruption
Last week Orange Line attended Inside Retail Live as the chosen social media partner for the event. The annual Festival of Retail Ideas is hosted by Australia’s leading retail news publication, Inside Retail, and draws a crowd of the brightest minds in retail to speak, engage and witness future predictions for what is a thoroughly disrupted industry.
Several thousand visitors attended the event to listen to the hand-selected line up of international and local speakers. The Main Stage auditorium was packed from morning to night, as the 70+ retail leaders took to the floor and explored topics ranging from today’s ever-changing consumer to envisioning the future of retail.
Of particular interest to many attending the event was the imminent arrival of Amazon to Australia’s shores and how this would impact established businesses. Despite displaying a stoic front, almost all of the presentations or panels featured some commentary on how retailers should, would or could handle the inevitable disruption Amazon would bring to the Australian retail industry.
In a series of interviews that followed the thought-provoking keynote speeches and panels, Orange Line Directors David Einstein and David Klein gleaned further insight on what each leader saw as the major opportunities and challenges arising from the convergence of digital with traditional retail practices.
Jim Fielding, President of Consumer Products & Innovation for Fox Television Group and Twentieth Century Fox Film
‘What does a leader have to be thinking about in today’s disruptive digital world?’
In an animated interview with Jim Fielding from Fox Television Group and Twentieth Century Fox Film, David Klein asked what a leader has to be thinking about in today’s disruptive digital environment. Jim was passionate in his response that leaders should be challenging everything that’s going on in their business right now. He sees great opportunity in the way consumers are looking for innovation in the disrupted marketplace.
‘I think you have to have world-class digital experiences, but at the same time I don’t think you can move all your money into digital and neglect your physical stores,’ says Fielding.
He emphasised his point with his own personal experience in the current marketplace. Where Fielding values Amazon for its seamless experience in purchasing a book when you know exactly what title you want, he also still wants the opportunity to peruse the shelves of his local bookstore and benefit from the knowledge of the staff. Despite being the same consumer, there is room for both digital and bricks and mortar experiences within the same market.
According to Fielding, success will come to the businesses who provide the right experience at the right time.
Julie Stevjana, Founder of Stylerunner
‘As a Pure Player online do you have a tactical advantage over other retailers and what channel is the most successful to reach consumers and win online?’
The benefits of an omnichannel presence were also extolled by Julie Stevjana. When asked if she had a tactical advantage as a ‘pure player’ online, Stevjana was quick to reply that in the future it was going to be important to her brand to establish a brick and mortar presence. However, she added that the traditional bricks and mortar stores had a lot to learn from businesses like hers as well.
As for where she sees the role of new technologies in her business, Stevjana is excited about what AR and AI can offer her consumers.
‘We have a very large database of products; we have thousands of SKUs [Stock Keeping Units used to track inventory], so to be able to leverage artificial intelligence to be able to service our customers in a better way, where we can understand a few points about them and recommend the right product and understand their past history, their purchasing patterns, I think there’s enormous opportunity there.’
Without a brick and mortar presence as yet, Stevjana emphasised the importance of social channels like Instagram for connecting with her community of consumers.
‘Our product is very instagrammable so it’s a marriage made in heaven,’ she concludes.
Peter Wilkinson, Chairman of Forever New, Previously MD of David Jones and Myers.
‘How are the big bricks and mortar guys faring against the pure players online?’
The big players in bricks and mortar were also focussed on leveraging whichever channel was best for for serving the needs of the consumer. With an impressive resume as Managing Director of David Jones, Myers and Target, Peter Wilkinson emphasised that the key to success amidst digital disruption remains constant—it’s about putting the customer first, not just trying to push them down one channel or another.
He warns that ‘any retailer who is not giving consideration into [Amazon] will be remiss.’ Leaders must think through with clarity about how they will protect their customer relationships, shareholders and staff to survive and prosper.
‘You keep coming back to the simple retail premise that why we’re here is to serve customers … So how do you go about doing that and whether it’s going to be digitally based, or whatever, get on with doing it. Get on with employing the people, recruiting the people, rewarding the people that are capable of that.’
Wilkinson stressed the importance of recruiting those who can manage and embrace change, saying that this will make the mountains you have to climb in the brave new world of digital an easier process.
Zrinka Lovrencic, Managing Director of Great Place to Work Australia
‘With the digitally disrupted workplace, should businesses upskill existing staff or replace them with digitally savvy employees?’
Great Place to Work Australia has the ambitious mission of making every workplace a great place to work. Managing Director Zrinka Lovrencic was able to shed some light on how business leaders in the retail space can best equip themselves with the right staff to thrive in the digital world. When questions whether businesses should be upskilling existing staff or replacing them with digitally savvy employees, Lovrencic replied:
‘Organisations do have to accept the fact that things are changing. Almost every role in every organisation is turning into a technology role.’
She adds that in Australia’s two-speed economy upskilling is becoming critical for organisations. In Australia, the workforce is not in surplus, so businesses don’t have a choice but to upskill if they want to survive.
To help your staff make the transition into their new technology role, Lovrencic recommends focussing on the question: ‘Why are we changing?’ She explains that when you put context behind change people are more likely to accept it. She says the answer should always be:
‘In order to fulfill our mission, in order to fulfill our goals, in order to live by our values, we have to make changes.’
Scott Emmons, Head of Innovation Lab at Neiman Marcus
‘What is the bigger challenge, ideation and innovation itself or working with the inertia of enormous retailers and trying to get that innovation flowing through the business?’
One role that has been borne of the digital revolution is that of Head of the Innovation Labs that the most forward-thinking companies are establishing to determine where resource is best spent on technology and innovation. With so much to choose from, it’s essential that businesses utilise the products, applications and channels that best serve their customers, increase efficiency and ultimately drive the bottom line.
David Einstein probed Scott Emmons, Head of iLab at Neiman Marcus on which was the bigger challenge: ideation and innovation itself or working with the inertia of enormous retailers and trying to get that innovation flowing through the business?
Emmons identified keeping the funnel full of good ideas as the bigger challenge. He explains:
‘You have to go through a lot of ideas [that] don’t fit your particular business to get to the good ones.’
‘I think as we’ve become more adept and more agile at doing technology, some of that business inertia side has dissolved because the business has really embraced the innovation with technology.’
He goes on to explain that this is helped when the business sees the value in making customer service better, in driving foot traffic, and ultimately driving the bottom line.
John Elliot, Managing Director of TOMS Australia & New Zealand
‘There are more and more companies out there under the guise of social responsibility. How are you going to stand out from the crowd?
The digital age brings with it a whole new generation of powerful consumers—the millennials. Different in many ways from previous generation of shoppers, John Elliot from TOMS mentioned in his interview how 88% of millennials want to connect with brands that have a positive social impact.
Understandably, many companies are now jumping on the bandwagon and marketing themselves as socially responsible. David Klein asked Elliot how he was planning on standing out from the crowd in this new environment.
Elliot remains unphased by the increasing competition, replying that TOMS would simply continue the journey of elevating purpose in business. He explained that giving is what fuels TOMS and that’s why they have that genuine connection with our customer.
‘Every business in Australia and the world is saying: “how do we elevate purpose?” and it’s tough because most companies aren’t like TOMS, they don’t exist because of the give. They exist because they want to be profitable.’
Elliot advises that for such companies to connect with the Y-generation in a meaningful way, businesses need to align themselves with something that’s very credible. One such roadmap for consistency is the B-corporation certification. This is an assessment businesses can undergo based on their governance, transparency, environmental and social impact; it offers a useful standard by which consumers can judge a retailer before purchase.
The full effect of digital disruption on the world of retail is yet to come, but one thing is certain—businesses need to adapt and remain agile if they are to survive. For more insights from leaders in the retail space watch the full interviews.
The right digital consultancy can help you outpace and outsmart your competitors. Get in touch with Orange Line today for a battle-tested digital strategy that delivers tangible results.