e-commerce
INSIGHTS AND PERSPECTIVES

Living in retail’s digital theme park

BY David Orgel

You can see that deer-in-the-headlights look on the faces of some retail executives.

Fast-paced digital disruption is having its impact.

Amazon-Whole Foods was the highest-profile wakeup call. However, it’s far from the only alert. A range of players are battling for advantage in this space — from ecommerce to digital marketing — all powered by new technologies. These include tech players like Google and Facebook, as well as such traditional operators as Walmart, Target and Walgreens.

Fear can be paralyzing to the retail industry.

Excitement, on the other hand, is contagious.

I felt excitement in hearing recent comments by Narayan Iyengar, the senior vice president of digital and e-commerce at Albertsons. At the Shoptalk conference, he was asked point blank why he decided to leave Disney about a year ago and come to ‘oh-so-glamorous grocery?’

“I’m here because this is where action is,” he asserted during the event’s Grocerytalk track (now being reintroduced as the Groceryshop show). “In the e-commerce and digital space, the next five or so years in grocery will have tremendous change. It’s very exciting and it’s all happening here.”

That’s contagious excitement, and Albertsons has already made some impressive moves. And to be clear, the excitement isn’t just for grocery, far from it. The same can be said for all retail channels, because they are being transformed by digital developments.

The key is to look at the digital battlefront from the high ground. That means getting out of the weeds and going hundreds of feet up.

What do you see? Using a Disney analogy, I see a new kind of theme park. Retail has become a digital theme park — there’s E-commerce Land, Digital Marketing World, Artificial Intelligence Village — and so on.

OK, maybe you say this sounds fairy-tale-ish. Or you maybe you think this isn’t your version of fun. Perhaps you don’t like the rides. But this is where the action is.

Plus, there’s really no choice. There are signs that e-commerce will move faster at retail than expected. Pure-play e-commerce companies are benefitting from access to data that’s more robust than physical-world data. Mobile marketing is proving itself as a retail star. Retailers are already offering case studies on how technologies ranging from augmented reality to machine learning have provided advantages for customer experiences.

No one knows how all this will play out. There’s no guarantee of a fairytale ending.

Nevertheless, this is once-in-a-career excitement. The trick is to feel more excitement than fear.

What does it mean to move forward in all this?

  1. Experiment, test, and learn. No one has all the answers;
  2. Pick your spots. You don’t want to battle Amazon across all its businesses;
  3. Don’t forget about the physical store. Digital strategies will help advance the store; and 
  4. Keep your focus consumer-centric. It’s best to be agnostic about platforms. Let the consumers decide.

It doesn’t even matter if a retailer embraces digital for the right or wrong reasons. There are cases in which retailers decided to switch to digital advertising and marketing because it saved money over print. That’s probably not the most visionary reason to go digital, but whatever gets you there is ultimately okay.

I see some incredible new senior digital talent being added to the traditional retail ranks. They are passionate. Tap into that excitement.

The point is, engage with this new digital theme park.

You can even learn to deal with the digital roller coaster.


David Orgel is an award-winning business journalist, industry expert and speaker who was the longtime chief editor and content leader of Supermarket News. He is currently the principal of David Orgel Consulting, delivering strategic content and counsel to the food, retail and CPG industries.

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Toys R Us
INSIGHTS AND PERSPECTIVES

Editor’s note: Game over for Toys ‘R’ Us

Lack of investments stalled steady growth

BY Seth Mendelson

What killed Toys “R” Us?

If you think it was a combination of intense competition from other traditional retailers and online operations like Amazon, you are only half right — if that.

The rest of the load falls squarely on the private equity companies that bought Toys “R” Us over a decade ago and saddled the company with more than $5 billion in debt. That is billions with a capital B, and it was enough to prevent the chain, which was already under intense pressure from Wall Street for some previous serious missteps, to keep pace with its competition.

In case I am not totally clear here, let me put it another way. Toys “R” Us will go down in retail business history as a poster child for just how badly private equity operators can ruin a business — a venture so big that at one point some said it was simply too large to fail. By the way, that says a lot, because private equity does not have a very good record when it comes to the retail industry.

The problem with private equity money is that it comes with a very crucial string attached: make lots of money and do it quickly. The folks that got involved with Toys “R” Us and some other retailers have failed to see that retail requires constant investments in infrastructure, marketing, assortment and advertising. Starting a new venture a few billion or more in the hole caused the leadership to forgo some of these necessary investments in hopes of returning dividends to the investors. Just a wild guess here, but I do not think those investors in Toys “R” Us are very happy right about now.

Consumers noticed the lack of attention pretty quickly. I know that I did. Organized clean stores with the right assortment of products turned into a maze of junk on messy shelves, and not enough in-store help at crucial times of the year. Shoppers left in a hurry, most to chains like Walmart and Target and, of course, Amazon, which offered more basic assortments but in much neater surroundings and often at lower prices.

Many people will say that the chain had it coming to it. The bottom line is that Toys “R” Us did a great job of putting just about everyone else out of the retail toy business over the last 30-plus years. It did so at one time by using devastating firepower — a lethal mix of great prices, broad assortment and strong advertising — to make toy retailing virtually impossible to be profitable for other retailers.

The lesson, of course, is that to be successful retail needs to be run by professional merchants, those individuals who know that this is not a sprint, but a marathon. And private equity does not normally work very well with retailers. Just ask the folks at Toys “R” Us.

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ECRM RangeMe
INSIGHTS AND PERSPECTIVES

How ECRM stays relevant at 25

BY Wayne Bennett

For more than 25 years, ECRM has been able to bring suppliers and retailers together in highly productive, category-relevant venues to help with their business needs and growth plans. For those that have attended an ECRM event in the past, the infamous luggage tag and “three minutes” door knock are all too familiar branding moments.

Just as retailers and suppliers alike have evolved over the years, so has ECRM. It has worked to emphasize business services focused on category management support to accompany growing sales, increasing productivity and saving time and money for busy and often overworked merchant teams.  

One significant step taken by ECRM recently was acquiring product discovery platform RangeMe. Currently, more than 30 large national retailers are using RangeMe to help their merchant teams in the product discovery process, offering them access to retail-ready suppliers. New suppliers looking to gain retail distribution can use the platform to submit their products directly to any of these retailers, whose merchants can review the standardized, vetted information.

With RangeMe, ECRM is becoming a key marketplace for new brands to onboard quickly with major retailers, enhancing speed to market, product discovery and, most importantly, business alignment to jumpstart sales growth for all parties.

Beyond RangeMe, ECRM is dedicated to working with merchants to develop and customize a purposeful plan to help clients accomplish white space co-creation, source new vendors and find the latest product innovations based on category growth needs.

When ECRM provides services to help merchant teams — many of which are stretched thin — save time and money, we think of ourselves as an extension of your team. Recently, a major retailer looking to discover new innovation called on ECRM to conduct a significant sourcing review, which led to the delivery of nearly 400 new potential suppliers with whom the retailer could create new assortments and source new capabilities to stay relevant.

For many years, ECRM’s services have also helped support retailers with their category planning and review processes. We have helped provide the resources, tools and infrastructure to support promotional planning, line reviews and seasonal planning programs across all product categories. These customized programs have brought the retail community significant cost savings, productivity enhancements and streamlined merchandising operations. In the past year, we have conducted more than 80 of these programs, significantly reducing the time it would take to implement these efforts if they were undertaken by the retailer’s team alone.

Also in the past year, ECRM has provided the retail industry with more than 280,000 meetings between retailers and suppliers. Our footprint, which covers national and regional retailers in all major CPG categories — including health and beauty care, consumables and general merchandise — is vast, particularly with regard to the information exchange, industry conversations and interactions that we facilitate across the mass market. For challenger brands — the bright spot in industry growth over the past several years — ECRM has always been the ideal place to gain a foothold in the retail space.


ECRM’s Wayne BennetWayne Bennett is senior vice president of retail for ECRM.

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