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In other words, if you are operating a
business in a digital world with a rotary
phone mentality, you simply cannot succeed.
“Ninety-eight percent of the economy will be
impacted by digitization,” she said. “And, 65
percent of children entering primary school
today will have jobs that don’t even exist yet.”
But if those comments pointed to a future
that requires imagination to envision, Maffei
also talked about Google’s approach to
business that is rooted in everyday realities.
For example, she asked if the businesspeople
in the room (and outside the room, for that
matter) are “setting goals that go beyond
accepted industry standards.”
She talked about the notion of banishing the
notion of “online” and “offline,” and focus
on “all-line,” creating a new standard that
is “seamless” and “end-to-end,” establishing
“lifetime value” that is not just transactional.
And while technology obviously is a driver
– and the notion of voice-activated, artificial
intelligence-driven, screen-less and wearable
computers would seem to propel us into
a Star Trek-like future – Maffei actually
suggested that retailers not start with
technology as they establish priorities
and strategies.
Rather, they should start by thinking about
what problem they are trying to solve,
and what pain points in the consumer
experience they are endeavoring to eliminate.
Technology can change the way business
interacts with consumers, but there is an
epiphany that must precede the tech choices
that businesses must make.
One of the things that a visit to Silicon Valley
offers is a chance to visit communities like
Palo Alto – where net worth and IQ are in
a constant race to see which one will be
higher compared to the rest of the known
universe – and see some of the unique retail
concepts that are being funded by tech guys
with big bucks. Some of them are pretty out
there, but still can offer lessons for more
traditional retailers.
For example, there was B8ta (pronounced
“Beta”), a fascinating retail store that caters
to both consumers and business customers.
Essentially, the store leases out small spaces
on Apple Store-like tables to technology
businesses that want to test out their
products’ viability. The products range
from electric-powered skateboards to
juicers and virtual reality viewers to high-
tech security systems.
B8ta has a highly trained staff that helps
guide customers through the store, and
rotates products regularly to make sure
there is variety; it also has technology that
is able to track how customers interact with
products, so suppliers have the maximum
amount of actionable data. B8ta has a full
supply of products for customers in the
backroom, and it only profits from the table
lease payments; it takes no cut of the sales.
What B8ta made me think about, though,
was how retailers may want to approach the
whole notion of new products if they want
to infuse their bricks-and-mortar stores with
excitement and make them a destination.
Maybe there should be whole sections of
new products with generous sampling
available that are used not as a way to get
money out of the manufacturer, but as
distinguishing the retailer from both online
competitors and the guy across the street.
We also visited a store called Relonch,
which is designed to address the precipitous
decline of the traditional camera business –
10 years ago, 127 million cameras were
sold, a number that was down to 20 million
last year.
Relonch takes the position that it is in
the photograph business, not the camera
business – so it essentially gives its customers
a high quality camera which automatically
sends photos taken back to the company,
which then sends the customer a preview
version of those pictures, and you pay $1
apiece only for the ones you want to keep.
This got me thinking…
What would happen if a food retailer went
to a customer and said, “We want to give you
a new refrigerator/freezer, and all you have
to do is commit to buying $200 worth of
refrigerated or frozen foods a month from us
for X number of months.”
I have no idea how the economics of this
would work, and I suspect that most retailers
would find this unworkable. But I also
wouldn’t be surprised if Amazon announced
such a program next week.
Which I think was the point of a trip and the
GMDC conference. Pretty much everything
is possible.
Tarpenning said that it usually is easier
to create a disruptive culture in a start-up
company than it is in an established, legacy-
based company. I think that is true – but it is
an explanation, not an excuse.
To compete in the 21st century, it strikes
me as critical to understand that new
competition can come from anywhere and
everywhere, and that this new competition
is likely to have a disruptive culture based
on questioning traditional assumptions.
Competing with such entities won’t be
easy. And it seems to me that one of the
first things retailers have to do is look at
themselves and pose one simple question:
If we were starting this company tomorrow,
how would we do it?
■
VIEWPOINT
“Technology can change the way business interacts with consumers,
but there is an epiphany that must precede the tech choices that
businesses must make.”
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ALABAMA GROCER |