In January, Walmart hired a new CIO and Executive Vice President from GE. Clay Johnson was brought on to oversee and unify Walmart’s entire customer experience, both in-store and online.
Bringing on a new exec to lead this change requires a hefty amount of buy-in from the top of a company. It also requires building and executing a strategy that’s aligned with and supported by the entire business.
It also sends a big signal.
In the rapidly changing retail game, driven by growth in mobile and other digital channels, Walmart is doing its best not to fall behind. (We’re already seeing changes: Walmart has launched a new service similar to Amazon Prime, offering ecommerce shoppers free shipping and no membership fee.)
A Sign of Retail to Come
Walmart's not the only retailer hustling to improve customer experiences online and off. Target recently hired Rick Gomez as CMO and Executive Vice President to improve and better connect different facets of the company’s customer interactions.
Place your money on other big-name retailers to follow suit. It’s clear that traditional retailing is not just changing, it continues to disintegrate and re-form before our eyes: it’s a race to become one of the strong that pivot to survive.
Most broadly, omnichannel experiences and multi-platform selling is the way forward for retailers and brands. And based on the data, there’s still a lot of ground these companies will have to cover. Relative to the potential shift, we’ve only just scratched the surface.
Retail’s Untapped Digital Potential
You might be thinking, “Any brand or retailer that matters today is already online.”
And while that’s true, it’s only part of the story. According to the National Retail Federation, retailers saw a four percent increase in 2016 holiday sales compared to the year before — and only about 18.7 percent of that was online.
Think about that: we’ve seen massive change in retailing over the past decade, with winners and losers (and many dead or dying companies left behind). However, ecommerce represents a vast minority of total retail sales.
Mobile commerce is only supercharging ecommerce growth, and there’s still a lot of change yet to happen as consumers shift their buying preferences to digital channels. Meanwhile, retailers are trying to catch up, unifying disparate channels, bolstering online and mobile experiences, and improving in-store experiences, too.
The data exhibiting the rapid, steady growth in ecommerce shows retailers aren’t going to get ahead with a focus on opening more stores. They’re getting ahead by being more responsive to the customer and letting the shopper set the agenda.
Take Walmart: it's not saying that its 2017 plan is to build 1,000 more stores around the world (it plans to open 59 stores this year). It's making a major pivot led by a CIO steering a 50-year-old company in new directions. Walmart is a global retail leader, but not quite yet a global internet retail leader. Its $3 billion plus acquisition of Jet.com in 2016 was one big step. But what else is up its sleeves?
A Glimpse at the Future
Back to data, and the seemingly vast untapped opportunity for retailers to grow and make a meaningful impact in their market. What will the retail world look like when 30 percent of retail sales happen online? How about 50 percent?
Perhaps not surprisingly, Amazon has already given us a glimpse at what we might be in store for. It's patented a floating warehouse that will deploy drones to pick up products and make deliveries. It's also debuted a cashier-less grocery store that takes all the waiting out of food shopping.
If anyone had talked about these approaches even a few years ago, most everyone would have called it crazy. Even now, Amazon’s retail approach can be hard to accept as reality. But it also means there’s huge potential for other retailers to start thinking big about digital experience. Amazon wants warehouses in the sky and drones to deliver packages — its version of great customer experiences. What’s your plan?
You Don't Have to Be Walmart to Disrupt
In the end, any company can still be a digital disruptor if they combine the right strategy with the right technology. The next five to 10 years promise more massive change — and more opportunity to blend strategic thinking, digital capabilities and precise execution to differentiate and stay ahead in your market.
Retail (and other markets) will be defined by the companies and brands that can harness technology to drive a strategic agenda aligned with customer needs and expectations in a fast-changing world. A couple years ago I would have laughed at the idea of drones delivering my Amazon order. I’m not laughing now. Amazon, for one, is setting expectations that competitors will be forced to reckon with.
Big retailers will likely lead this evolution toward new, larger-than-life experiences and promises to customers. But you don’t need to be Walmart-sized to make an impact and innovate for the next phase of your business. Even smaller, incremental changes towards a stronger digital presence and better customer engagement make a huge difference.
Example: Can you leverage Amazon Echo to provide a voice-activated way to interact with your information, products and services? Can you better use customer data to build seamless experiences that personalize the experience of your customers as they move from website to mobile to walking into your store? Can you empower your in-store staff with technology and best practices to engage with these shoppers who cross seamlessly from web to store?
This is your chance. Ecommerce accounts for only 10 percent of retail sales today, yet look at all the disruption that has occurred. How will you inject your brand or business into the next 10 percent of that growth to better serve your customers and remain relevant?