While technologists and marketers gathered in Vegas at the 53th annual CES in Las Vegas to gawk at the latest and greatest in connected toilets, the retail industry gathered shortly thereafter in New York City from Jan. 12-14. But instead of looking for cool tech breakthroughs, attendees sought solid ground to re-build margins and keep customers loyal. It was appropriate then that Microsoft CEO, Satya Nadella, served as both keynote speaker and symbol of the possibility of retail’s rebirth, as many have credited him with resurrecting Microsoft’s fortunes.
Nadella opened the conference by calling retail the “demand signal for the world”, as it generates 40 terabytes of data every hour and accounts for 31 percent of the world’s GDP. What retailers do with this data will determine the direction and health of the economy moving forward, he asserted. Here are the four major ways Nadella sees technology assisting in this transformational moment for retail.
Tech Must Empower Companies and Employees
It’s hard to believe that Microsoft – with 92 of the top 100 retailers using its cloud platform – has become the “good guy” in tech, while Google is now the awkward black sheep whose mantra “Don’t be evil” rings hollow in light of recent internal rifts and PR blunders. At NRF, Nadella took gentle potshots at both Google and Facebook, while positioning Microsoft as the benevolent tech vendor who empowers retailers and employees with solutions that don’t leave them beholden to a vendor.
“What’s the proprietary technology that you can claim as your own?” Nadella asked the audience, who added that retailers can’t become cool simply by associating with a tech vendor or brand. He urged retailers to stop blaming their legacy systems for a lack of agility and to build out new tech capabilities that unleash what he called “tech intensity”, a term he introduced in 2018 that is a “…fusion of cultural mindset and business processes that rewards the development and propagation of digital capabilities that create end-to-end digital feedback loops, tear down data silos and unleash information flows to trigger insights and predictions, automated workflows and intelligent services.”
While retailers aspire to instill “tech intensity” into their cultures, Microsoft and Samsung announced a new phone at NRF designed specifically for retail employees. The Galaxy XCover Pro comes with a push-to-talk feature enabled through the Microsoft Teams app. The phone will come equipped with a point of sales (POS) solution that lets customers make payments by tapping their contactless card, phone or watch against the Galaxy XCover Pro.
Learn more about the Galaxy XCover Pro
Real-time Personalization Is the New Baseline
A required buzzword for all keynotes, Nadella cited personalization and its favorite cousin, the recommendation engine, as critical components to boosting sales and increasing customer satisfaction. Building out an AI tech stack for real-time updates (versus a slower overnight batch process) is the next evolution for serving customers smart, timely recommendations along the purchasing journey. Nadella praised Starbuck’s Deep Brew AI initiative as a model to emulate.
Turn Your Store into an Experiential Computer
“Data is only useful if you can predict something better, automate something better, or gain an insight,” said Nadella. To generate useful in-store data, Nadella recommends thinking of your stores as computers that should be equipped with sensors, beacons, cameras, and other technology to collect 2nd party data in order to understand how the store should be organized, stocked, and, ultimately, experienced.
Nadella cited UK grocer Marks & Spencer as a model for using real-time data, which can inform on-the-fly responses like cleaning up a spill in an aisle or reconfiguring product placement to reduce congestion. More grandly, the data can be used to inform the entire in-store experience, as Canada Goose exemplified with a new store model that recreates extreme winter environments (brrr!) and maintains minimal inventory with a same-day delivery service once a user selects their jacket.
Learn more about Canada Goose’s new store
RethinkeCommerce: Imagination and Monetization
Finally, Nadella urged retailers to re-think the underlying ecommerce experience, which despite its relative newness has become a stagnant click-and-pick experience without much immersion. He cited Italian company Natuzzi as a brand using HoloLens 2 to bring the showroom home, so that online buyers can feel like they are in the store through virtual reality.
For more conventional ecommerce experiences, Nadella recommends following the Home Depot model of turning the ecommerce store into an advertising platform. “You have the real data and the most valuable asset, which is commercial intent and consumer behavioral data. How can you convert that through your marketing efforts into new online advertising channels for every company, every supplier? This will reshape business models.”
