Managing innovation? It isn’t easy
Las Vegas — These are exciting times for retail technologists, and the IT guys are in demand. The flip side of that coin shows that change is coming, and somebody is going to have to manage it.
During the Presidents Council lunch here during the National Hardware Show, Robert Howard, a partner at consulting firm Kurt Salmon, delivered a presentation on managing innovation, and kicked it off with the caution: "It’s kind of fuzzy."
What’s clear, he reported, is expectation of dramatic changes. For instance, he pointed to statistics showing that in the next five years:
• 41% expect to provide personalized offerings, based on previous behavior, to a shopper’s smartphone;
• 35% expect to recognize their customers in the store with geofencing or presence technology;
• 42% expect to send coupons based on a customer’s location in the store;
• 56% of all transactions will be completed via mobile point of sale self-checkout at a terminal or on a shopper’s mobile device; and
• 42% of sales will come from online, mobile and social commerce sites.
That’s a lot to think about, not even counting 3-D printing and its disruptive possibilities. This technology he described as a trend in its infancy, but also a frontier in its "Wild West" stage. "It has a long way to go, but it’s coming," Howard said.
The stakes are high, as the economy moves from a service economy to what he described as "an experience economy," and customer retention can be difficult.
There is a wide gulf, he said, between the percentage of company executives who said customers might switch after having a bad experience (49%) and customers who say they have actually switched after bad experiences (89%).
Those numbers show an urgent need for companies to get the experience right.
Bob Taylor shares optimism with Presidents Council
Las Vegas — Do it Best CEO Bob Taylor offered a dose of industry optimism during the Presidents Council lunch event here during the National Hardware Show.
Taylor, who reminisced briefly about his childhood trips to the National Hardware Show with his father, said it was encouraging to see "renewed growth" at the show.
Gauging industry sentiment from visiting with many of the Do it Best members, Taylor said that even with a weather-induced slow start in the North, the business attitude in general is "extremely optimistic" for 2014 and beyond.
"When you ask them where they intend to be in the next five years, you get answers like ‘I’m going to double my business.’ "
He added that the independent retailers that are going to grow are the ones that have positioned themselves correctly during the downturn. "We’re fortunate to have a number of those in the Do it Best family," he said.
Sears plans to close more stores
There are more store closings in Sears’ future. In an address at Sears Holding Corp.’s annual shareholders meeting, chairman and CEO Edward Lampert said the company would close stores and look for ways to leverage its real estate as it continues to focus on integrated omnichannel retail and its Shop Your Way rewards program.
"Closing stores is going to be part of our future," Lampert said. "I’d rather do (fewer closures) rather than more, but the world has shifted."
He did not give an estimate on how many stores Sears would close. But with regards to marginally performing stores, Lampert said "the decision more often than not is to not renew the lease."
"We think you don’t need 2,000 stores to be relevant in the United States," he said.
Lampert said that rental income from subleasing store space in Sears stores to other retailers is likely to increase going forward. Sears has closed about 300 stores since 2010, and has spun off its Orchard Supply Hardware, Sears Hometown and Lands’ End businesses. The company currently operates approximately 778 full-line namesake stores and 1,152 Kmart stores in the United States.