In the last few years a recognizable shift in retail has occurred (and is still taking shape). We’ve seen the rapid growth of digital retail platforms, and in contrast, many well-known retail brands have gone out of business. Then there are the retailers somewhere in the middle, who are reassessing and revamping their traditional business models by placing a heavier emphasis on digital transformation and re-configuring the role of brick & mortar stores in their broader brand strategy.
I recently had the pleasure of sitting down with Sarah Nesland, General Manager and Head of Sales for Retail and Transportation Logistics at Extreme Networks, who’s witnessed this shift in the industry first-hand, and understands its impact on retail brands and their stores. While she acknowledges the industry’s digital maturity has come a long way, she also believes many of the shortcomings retail businesses experienced historically-especially with their technology partnerships – are still unfolding today. Read a summary of our discussion below to learn more.
Question 1: Based on your experience working in the industry, what are the keys to success in retail today?
There are a few big themes that are keys to success, which we see throughout the industry. These themes include:
Historically, retailers have had outdated systems that are closed, meaning they are not allowed to talk to each other and require a full stack of purchases for any innovation. More importantly, their organizational structure has also been closed off and siloed.
Five years ago, the ‘omnichannel’ phenomenon hit, and innovative retailers saw the open and agile train that was coming at them. Retailers who were both savvy enough to notice their surroundings, and had the full backing of leadership teams, were then able to create a culture to innovate; and in turn, a strategic vision started to move.
Question 2: From operations and customer standpoints, respectively, how have these keys to success changed in the last five to ten years?
Today the environment and the ecosystem mentality needs to be about automation. In the past, vendors could get away with closed loop systems while full stack integration was permitted. Retailers that don’t insist on an ecosystem approach and vendors that don’t enable speed for their end customers will experience a slow death in terms of success within the industry.
Ever miss setting an alarm clock and waking up for an important event? There is a jolt of adrenaline that courses through your body- it’s an alarm clock moment! Most retailers I work with are in that very moment right now. Retailers “want” to believe the vendors they have worked with for years; they deployed closed systems but are now labeling them as open. All that time they spent focusing on one vendor has allowed for missed opportunities and growth in innovation. As a result, companies are now serious about partnering with open, flexible, and innovative agile companies.
Question 3: Will you expand upon that point, about the importance of working with vendors who deliver flexible and adaptable solutions?
Absolutely! The retail industry today is a dynamic and forward-thinking (not to mention exciting) industry now. Successful retailers will adopt a similar mindset, but imagine your organization losing out on the ability to embrace this approach because they’re weighed down by a vendor’s technology. More and more, success in today’s landscape is a compelling combination (or an ecosystem) of solutions that play well together. How can you even develop this ecosystem when the existing technologies are designed to prevent this?
Retailers need open-based, flexible platforms or solutions that offer quality and reliability but also enable nimbleness and freedom – freedom to integrate a new 3rd party tool, freedom to pilot a new program, freedom to control their organization’s direction (not the other way around). Vendors that force retailers to a set of proprietary protocols or a set way of conducting business are doing a disservice to themselves and their customers.
Question 4: How does this mentality specifically apply to IT networking solutions/infrastructure? What should retailers be thinking about when evaluating these technologies?
Many of the general concepts and ideas I expressed before apply to IT networks solutions as well. Retailers should be mindful of how the IT solutions they’re investing in today will impactful their organizational goals (in a negative or positive way) in the future. Given the climate of the industry – like I mentioned before: dynamic, forward-thinking, and prone to sudden change – your IT provider should position you to be successful in this environment.
How does this relate to IT networking solutions? Generally speaking, it means avoiding cumbersome systems that require too many resources to maintain and manage on a day-to-day basis. Retailers shouldn’t have to allocate the majority of their time and budget supporting routine tasks, especially if the same solutions they’re managing have a much higher TCO compared to the rest of the market. I think retailers can work smarter. For example, having the ability to choose the deployment model based on the business’ need – on-premise, cloud, centralized or distributed (or a hybrid of these deployment models). Or, integrating network services into a single operating system – like network management, guest onboarding, analytics, and security. Imaging the time and money saved taking these actions, which you can then put toward more innovative use cases.
Instead of spending 80% of your time and resources just keeping the lights on, work smarter by reallocating your focus on harder-to-solve problems and experiential meaningful retailing, while continuing to move the company culture into a more nimble, innovative and satisfied entity.
Question 5: We touched upon the operational example, what about specific use cases of innovation you’re seeing that focus on delivering excellent, value-added customer experience? (i.e. AR/VR, wayfinding, mobile marketing, etc.)
In today’s era, customers expect the ability to shop where they want, how they want, and when they want. This demand has forced retailers to explore friction-free shopping experiences. In turn, we are seeing the rapid growth of customer services like curb-side and in-store pickup, where order online is placed and then picked-up either inside or outside the store.
Geo-fencing assists in the ability to know a customer is near the store, increasing the probability that the store is ready for the customer, and shrinks the time to service and provide efficiencies for the retailer’s workforce.
Along with knowing your customers are near, retailers are all seeing extremely positive business cases related to loss prevention, slip fall claim reduction, and product placement. The other innovation I see is around effective deployment strategies: focusing efforts in a core group of stores to prove theories out, measure success, and in parallel producing a scaling plan to deploy to the balance of the store footprint. Many genius marketers will promise the moon and only be able to deliver an inch.
Question 6: Personalization is a word that’s often mentioned in retail. Why is this important, and what are some technologies and methodologies that retailers can employ to increase personalization for customers?
Personalization may seem like a buzzword and one that’s used frequently, but it does have significant benefits for the customer when implemented in a targeted and effective way. Personalization is all about understanding your customer’s likes and dislikes and making offers to them that are highly contextual and relevant to their needs.
First, having the visibility to what your assets are on-hand, where they are, and what they are doing is imperative. These assets may range from sellable inventory to management devices to track inventory, to associates and customers. Once you have the fundamentals handled, then you can start to increase the level of sophistication and technology to delight your clientele.
Additionally, we are seeing technologies like RFID and electronic shelf labels that have decreased in costs, and are delivering business cases that hit companies hurdle rates. ESL has had some surprising benefits around higher velocity in decision making which leaves the store more organized as well. Location-based services are also a very hot topic in the market today. Understanding where your associates are in relationship to where your customers are, especially your most loyal and valuable customers, can reduce friction in a shopping journey and cause very meaningful experiences.
At Extreme Networks, Sarah leads the Retail and Transportation & Logistics field sales teams. She is best known over her 25-plus year career for building action-oriented, highly empathetic teams with the heart and tenacity to repeatedly deliver 360° wins that create enterprise value for all parties, eliminate wasteful operating expenses, while she lives a full and balanced life with her family. Her leadership roles span business development and sales across Wireless Service Providers, Technology Application and Product Manufacturers with expertise in complex OSS, SAAS software and Business Process Outsourcing.
