Amplify the Human Experience
I find it extraordinary that shares of Amazon have a price-to-earnings ratio of 173.35. That is amazing for any stock, but Amazon's unique situation tells us something important about the retail success of the company. Especially when it comes to amplifying the customer experience. That is, investors in the stock market place a premium on Amazon's ability to innovate and make its website and associated digital devices and platforms a seamless, one-stop shop for today's plugged-in consumers. Why else would a company have such a high p/e ratio? The answer: Investors have confidence that the company will keep pushing the digital envelope.
As I prepare for the annual "Big Show" of the National Retail Federation, where Infosys is presenting a host of tech showcases, I can't help but give readers of InfyTalk a brief preview. I am constantly asked what I see as the top technologies that amplify a customer-centric retail experience. The fact is: You don't have to be a global retailing giant to harness these technologies. They are available to all, and if you are able to get the combination of technology with responsive customer strategy right, you could well be on your way to being the next big thing.
A shopaholic once famously quipped, "Whoever said money can't buy happiness, simply didn't know where to shop." The joke now seems to be on retailers as customers shop on their mobile device, television set, and not to forget, in different formats of brick-and-mortar retail stores. Given the heterogeneity of shop fronts and availability of brands at diverse price points, retailers - and not shoppers - seem to need therapy.
The shopper's digital genome compels the retail industry to reinvent itself to serve existing and emerging demographic segments. Just as the cable industry rises to the challenge of the digital 'cord-cutter' generation accessing content on their mobile devices, retailers need to serve millennial shoppers who prefer 'adding to cart' rather than paying at checkout counters. Even when shoppers visit the store, retailers need to influence their pathway to aisles that stock goods in their shopping lists.
eBay: How online boosts offline sales
There's an old proverb that reads: May you live in interesting times. I always think of that saying when I consider the exciting changes taking place in the retail industry. Look around at any global chain or online retailer, and you'll find that we're living in times that go beyond interesting.
Consider the giant online retailer Amazon.com. Its financial performance has been less than stellar, yet its stock continues to trade in the stratosphere. That sign of investor confidence is based, I think, on the premium placed on innovation. Their CEO and founder, Jeff Bezos, is so committed to the rapid delivery of merchandise ordered online that he is flirting with deploying a fleet of unmanned drone aircraft that can airlift orders straight from warehouse to front door in minutes. Indeed, investors are rewarding Amazon's penchant for innovative thinking when you consider the multiple at which the stock continues to trade.
In some countries, the government-run post office can often be a poster child for inefficiency and all that is wrong with federalizing an organization. Add to the mix the decline in mailing traditional letters because of email, and post offices have faced some challenging years.
In the United States, for example, a debate has raged over the future of the country's post office. Some people say it should go private. They point to companies like Federal Express and United Parcel Service as examples of how efficient a mail delivery system can be when it is run for shareholders instead of by the government.
There's an empty Big Box store near where I live that used to be bustling with activity. It was a Border's bookstore that had a gourmet coffee shop right in the store. Every weekend a classical string quartet would perform in the main gallery while shoppers perused the latest titles. Everything about the shopping experience was upscale and delightful.
Yet now that store site sits barren ... a reminder of the potent and powerful online retailing revolution.
Today, retailers are seeing consumer behavior and social expectations change on a vast scale. There is a confluence of forces in the global markets that make the era in which we're living a very important one to large retailers. Forces like omni-channel retailing, ability to understand and respond to the context of each and every consumer touchpoint, and a concerted effort to revamp the information systems--have created tremendous pressure on even the savviest of companies.
Best-in-class retailers are quick to adopt processes and models that cater to the new demands of the industry. That sounds fairly straightforward. However, rapid and steady adoption of customer-focused processes is the exception in the retail industry. It's an industry that's very traditional and doesn't exactly change direction easily (art vs. science), especially when technology is involved. Too often, decisions are made on the basis of 'gut feel', competitor insights and current trends, some of which are not destined to survive another purchasing season or two. Once these investments do not yield the desired results, retailers often struggle to justify their decisions. By that time, however, it's too late and the monies are already spent.
Dise Digital Signage New Shopping Experience! [Source: http://www.youtube.com/watch?v=LX_4bd4t_vo]
I found myself the other evening watching one of the most delightful old movies: "Breakfast at Tiffany's." Because it hit theatres back in 1961, it's definitely dated. The references in the movie to the retail world are fascinating, however, because of the transformation that digital technology is having on that sector today - more than a half-century later.
In the movie, the young protagonist tells her would-be suitor that she loves going to Tiffany's because simply walking around the jewelry store makes her feel good. She can enter with all sorts of worries on her mind and then leave a half-hour later without a care in the world. She wasn't speaking about the jewelry per se. She was talking about the entire in-store experience: the combination of the layout, the lighting, the way the courteous staff greets her, and how they wait on her as attentively as possible.