Several weeks ago I had the pleasure of being the moderator and Master of Ceremonies for a Tyco Retail Performance Council in Silicon Valley, California. Seven loss prevention retail executives representing roughly $600 billion in industry revenue joined the Tyco Retail Senior Leadership Team in a two day innovation deep dive.
The Power Agenda
Day one consisted of hands-on immersion into innovation, technology trends, new ideas and solutions through the eyes of venture capitalists, futurists, start-up companies, academia, and industry experts. First stop of the innovation tour was the offices of Andreessen Horowitz (known as "a16z"). To date, a16z has raised $7.1B, across seven funds.
Opening the a16z session was futurist Benedict Evans who spoke to "the state of tech today and what's likely to happen in the next decade: mobile, Google / Apple / Facebook / Amazon (GAFA), innovation, machine learning, autonomous cars, mixed reality and crypto-currencies."
Check out this variation of Benedict's presentation "10 Year Futures (vs. What's Happening Now).
Benedict was followed by two start-up companies funded by a16z presenting a platform that optimizes end-to-end customer journeys and cyber security solutions.
A Power Lunch plus More Innovation
At noon, the group walked to the Rosewood Hotel, a popular destination in Menlo Park for Bay Area entrepreneurs and executives. Yossi Feinberg, Professor of Economics at Stanford University, as the lunch speaker lectured on disruptive business models using Amazon and Netflix as examples. Yossi then answered questions on strategic disruption, the sub-prime crisis, and technology's impact on retail.
David Schwab followed and he presented a portfolio of retail focused companies that are part of his Vertical Venture Partners portfolio. Two start-up solutions followed from Alchemist Accelerator. Solutions sets presented to the retail executives included big data, blockchain, prescriptive analytics, mobile middleware, SaaS, artificial intelligence, and cyber security.
Debunking the Retail Apocalypse
Jeff Roster currently the VP of Retail Strategy at the IHL group and formerly with Gartner wrapped up day one with a spirited update on the state of USA retail. His presentation debunked the "retail apocalypse" popular in mainstream media (1).
Jeff's key messages:
> Ignore the mainstream media on USA retail news. Retail is strong, but retail is changing fast.
> Retailers must commit to transformational IT and remove the friction of buying. Unified Commerce, Cloud, and Mobile are huge enablers of a better customer experience.
> Customer Engagement starts with being quick and being in-stock – Don’t major in the minors. Amazon currently spending $16 billion annually on innovation. Retailer’s apathy towards out-of-stocks helping to drive Amazon’s growth.
Day two focused on Tyco Retail Solutions' vision, strategy, and innovation concepts. It consisted of interactive discussions on the state of the retail industry around loss prevention, the pain points, and the key retailer requirements for future success.
The Next Generation Formula for Rewarding Customer Engagement
The pace of change plus a highly connected consumer require retailers to adopt new technologies faster. Most retail companies do not have the Amazon $16 billion innovation investment dollars to compete and transform their businesses.
The Silicon Valley event was a great example of how the vendor to retailer relationship is transitioning to longer term strategic partnerships. Clearly on display over the two Tyco Retail Solutions sponsored innovation days was a trend that I discussed in my "NRF 2018: The Ten Quick Transformational Retail Trends" blog. Progressive retailers, to keep pace with the increased digital consumer engagement realities, need to get technology married to strategic solutions partners (2).
The next generation formula for rewarding customer engagement requires mutual innovation executive education sessions such as this Silicon Valley event. It is the start to answering the McKinsey question of "what do customers want? The savviest executives are asking this question more frequently than ever, and rightly so. Leading companies understand that they are in the customer-experience business, and they understand that how an organization delivers for customers is beginning to be as important as what it delivers."
"Customer-experience (focused) leaders gain rapid insights to build customer loyalty, make employees happier, achieve revenue gains of 5 to 10 percent, and reduce costs by 15 to 25 percent within two or three years."
The very positive retailer response and the innovation examples in Silicon Valley confirmed that this is the age to disrupt or be disrupted. Building lasting strategic technology partnerships is the critical next generation formula for rewarding customer engagement and a brighter future of retail.
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(1) Read more about "Debunking the Retail Apocalypse" in the original IHL research.
(2) See the blog "2018: It Starts with the Voice of the Customer" for additional retailer insights on strategic technology partnerships.
