By Paula Rosenblum, Managing Partner
10/7/2008
Last week, I had the opportunity to speak at IBM’s European Multi-channel Summit at its Innovation Center in La Gaude, France. For those who are unfamiliar, La Gaude is located about ½ hour from Nice, in the foothills of the Alps. My accommodations abuted both Nice’s old city and the highest of high-end retail shops, so I really did get a chance to see retail’s past, its present, and in all likelihood, pieces of its future.
Nice is beautiful and a fascinating juxtaposition of images. A modern art museum (Musee d’Art Moderne et d’Art Contemporain) sits amid buildings dating from the 18th and 19th century and retaining walls built even earlier than that. Small souvenir shops and cafes coexist with stores catering to the rich clientele that dock their yachts in the ancient harbor.
At La Gaude, attendees had a chance to see not just the distant future, but actual possibilities for today. Our tour guides were very specific, that each of the technologies we saw is in fact, available today. For a variety of reasons, they just have not been put together yet.
I followed one tour that described a day in the life of a just-about-to-turn-sixteen girl. She moved between virtual and physical worlds with ease….going to stores and looking at clothes, texting images to her friends for review and approval, and allowing in-store computers to accessorize her. Those items she could afford, she purchased. Those that were over her budget went onto a wish list, which she fully planned to present to “grandma” later as potential birthday gifts. She updated her virtual Sweet Sixteen registry on the fly. Once she returned home, she went about the business of picking out an outfit for that Sweet Sixteen party. She used a virtual model to try clothes on, sent the images off to her friends for their blessings and ultimately settled on her ensemble.
The convergence of technology on disparate devices was so powerful as to be completely unnoticed. Our teenager moved seamlessly from mobile device, to computer, to TV. The data she saw across each media was identical, and each device remembered exactly where she’d left off.
Ironically, from talking to attendees, and from the data we’ve gleaned from our multi-channel research, the hardest part of this whole exercise is getting to that single view of data. The “whiz-bang” technologies all exist. We can have virtual closets in Facebook using applications like Bevy and run our ideas past our friends, we can create wish lists on almost any web site, and graphics rendering is generally mature enough that we can get a pretty good idea what something is going to look like before we buy it. But much like their American counterparts, European retailers are challenged to bring customer information together in one place.
It is clearly easier to start with a blank slate of paper and create something new than it is to pull information from the morass of systems retailers have in place. PIM’s (or Product Information Management systems) which promise to at least solve the product side of the equation, have gained traction slowly. Why? The data cleansing required to even populate these systems has made ROI difficult to achieve. Different applications, even in the same suite, may know a product by different names. Normalizing that information to get the PIM started just takes too much time. The logical NEXT step, Global Data Synchronization, also stalls for the same reason. Not only must internal systems know a product by one name and one name only, now suppliers must ALSO know the product by the same name.
The same challenge exists in creating a single view of the customer. Different identifying numbers, customers registering with different e-mail addresses…it’s a data cleansing nightmare.
This is retailing’s present. The customer is super technology-empowered and growing more so every day. For a consumer, getting a new mobile device is as simple as spending a few hundred bucks, and requesting that information get downloaded from the old one to the new one. For the retailer, creating new applications to go on the next generation of mobile device, or the next channel is somewhat challenging, but getting everything to work together is a nightmare.
The current economic environment doesn’t seem like the best time to make investments in new technologies, especially ones that don’t drive immediate bang for the buck. Integration buses clearly fit into the category of “low ROI today – big ROI for the future.” Retailers around the world may have a hard time swallowing that kind of message. The problem is, you can’t get to the future without it. You can’t tell a 15 year old girl that your legacy applications are older than she is, so she’ll just have to show the items she picked out on-line to a sales clerk once she gets in the store. This isn’t a future retailers can live with, primarily because the consumer just won’t have it.
In the most exquisite of ironies, the drama of the US financial bail-out bill played out while I was in Nice. I got an e-mail from a friend asking, “Do they even know what’s going on here in France?” Right as I was reading that e-mail, Bloomberg Europe reported France was attempting to broker a similar (but smaller) bail-out bill for the European Union. And as I watched that same station, at least three European banks were bought and sold in similar manners to Wachovia and others in the US.
Retailing’s past was simple, but its present borders on intractable. President Clinton used to talk about a “bridge to the 21st century.” Those bridges never quite got built in retail. Retailers have to build them now, under less-than-desirable economic circumstances. Channels will continue to proliferate. New technology will continue to empower consumers. And retailers must become more nimble, or they will not survive.
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