Retail leaders need to care more about tech

Discussion
Photo: RetailWire
Feb 13, 2019
Nikki Baird

Through a special arrangement, presented here for discussion is an excerpt of a current article from the blog of Nikki Baird, VP of retail innovation at Aptos. The article first appeared on Forbes.com.

Technology has gone from a cost to be controlled to a primary enabler of a retailer’s ability to sell, which increasingly puts technology at the heart of the customer experience. Yet business leaders’ understanding of these technologies — what they’re capable of and how they deliver what they do — has not really increased as tech capabilities have grown.

I’ve seen it many times: a “talk to the hand” moment of “Yeah, I get that you want to talk bits and bytes, but I don’t really care about that stuff. Talk to the IT guy.”

Tech is a tool of the trade now, like it or not. If you don’t understand how your personalization solution works, how are you going to best take advantage of what it has to offer? Artificial intelligence only makes these risks larger and more immediate.

The net result of this attitude is pressure on technology vendors, influencers and  even “the IT guy” to cast technology purely in business terms. The problem is that a lot of the value of technology is in how it’s deployed. For decades now, business leaders have had more control over the technology budget than ever before, and when faced with the low-cost version of deployment vs. the higher-cost-but-better architecture option, they’ve pretty consistently opted for expediency and low cost.

It hasn’t helped that it has become increasingly difficult to explain the technology purely in business terms.

And thus, retail technology is loaded with technical debt, because the people paying for IT didn’t want to know or care about how the technology works. One example is POS: retailers using Windows 7 thought they were saving money by not upgrading and are now scrambling to overhaul their hardware and software to get to Windows 10.

Equally, the tech industry has a responsibility here too — to make sure that our solutions can be understood by people who don’t already love technology, and to ensure that we do our best to help business leaders see when they are making decisions that will put them right back into their technical debt corner. Too often, tech vendors are enablers of retailers in that regard. And in the end, that serves no one’s purpose.

DISCUSSION QUESTIONS: Has expertise in technology become a core competency that a CEO can no longer delegate to others? Are tech vendors in some ways acting as enablers of a short-term IT investment mentality?

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"It’s time to catch up with the times. Otherwise, emotional decisions that lead to 'magic bullet syndrome' will continue."
"Technology is not only a core competency, it is a competitive advantage and critical for success."
"...it’s all about building a team of executives within their merchandising, innovation, strategy and operations teams. "

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23 Comments on "Retail leaders need to care more about tech"


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Shep Hyken
BrainTrust

CEOs don’t need to know how the technology works. They need to know how it impacts the process, the customer experience and the bottom line. Does the technology make something in the process easier? Will the technology make it harder or easier on employees? Will the customer notice it? And if they do, will it be because it made shopping harder or easier? And finally, will the investment in the technology pay off with either dollars or winning more customers from a competitor?

Mark Ryski
BrainTrust

There’s no question that CEOs today – in retailing and virtually any industry – need to have a solid understanding of how technology can be applied to benefit the business. These are mandatory and essential skills. However, the reality is that there are so many tech-enabled solution providers pounding on the doors of retail executives, claiming that if the retailer subscribes to their service or buys their solution, it will rain money, that it can be overwhelming and annoying. In my experience, lots of these “solutions” have yet to be proven and it’s completely understandable for retail executives to be skeptical and demand some assessment of the value the solution delivered.

Bob Amster
BrainTrust

We know that, over the last 10 years, retail heads of IT have had to become more businesspeople than they had been before. That is how they got a seat at the executive table. I believe that a good CEO needs to have an intellectual understanding of the importance and benefits of information technology in their business. That, however, does not necessarily mean that they should understand the details of technology in order to successfully run a successful company.

Paula Rosenblum
BrainTrust

This is true in retail and in politics. No more plausible deniability. It’s time to catch up with the times. Otherwise, emotional decisions that lead to “magic bullet syndrome” will continue.

Adrian Weidmann
BrainTrust

While CEOs don’t require expertise in technology as a core competency, they do need to accept its necessity and value in today’s shopping journey. This is not just limited to CEOs — this should include everyone in the C-suite. I’ve worked with organizations where the CMO only cared about the perception of the brand — not how their customers interacted with and shopped the brand. And yes, they are currently scrambling to upgrade their technology to meet shopper expectations.

Technology vendors are equally to blame for the gap. Too many tech products and services are wonderful tactical trade show demonstrations in a desperate search for a strategy. This combined with far too many promises of “buy this and money will fall from the sky” has tainted the well.

Retailers and brands alike need to respect and accept technology as a required enabler of workflows and solutions that help and bring value to the shopper. Innovate, experiment but ALWAYS measure and optimize!

Lee Peterson
BrainTrust

I agree that tech has to be an important part of a retail leader’s brain, but two things: 1.) that doesn’t mean putting the head of IT in charge and 2.) that’s probably not going to be fully realized until digital natives start to run things rather than the 65- to 70-year-old digital immigrants leading most of retail right now. We’re going to need a generational shift before tech becomes fully integrated and is not just some kind of test gizmo to get PR out of. Here’s to 2026.

Ralph Jacobson
BrainTrust

Twenty years ago, a CEO told me face-to-face that he got where he was not knowing anything about technology. I know several CEOs today whom are still living that life as we speak. As Nikki pointed out so well, this is a two-way street. All senior leaders need to dive in and understand at a high level how technology can augment the performance of their businesses in specific functional areas. At the same time, technology companies must have sales and marketing messaging that cuts through the techy goop and demonstrates the business value of the tech in a straightforward manner.

Zel Bianco
BrainTrust

Yes and no. Clearly a good CEO needs to keep up with significant new developments in technology but not at the expense of leading the business. After all, with technology changing so fast and every new solution claiming to be the one that will impact the business the most, when would a CEO have the time to run the business? A good CEO hires smart people that can and should be the ones to filter the technology solutions that are a good fit and then assess their benefits specifically for the issues they are trying to solve. How could a CEO be able to fully grasp every piece of technology on the floor of NRF and have time for anything else?

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
4 months 4 days ago

Technology is a core competency to the success of the 21st-century enterprise. It matters not the size or industry. How and where it gets applied may be different, but it has become a constant across the board.

The old paradigm viewed technology as an efficiency and productivity engine: doing things faster and cheaper. Today, technology does that and much more through the power of artificial intelligence, machine learning, and predictive analytics. New business processes in the back office and customer-facing are being reinvented and connected in real-time. All this is creating opportunities for those companies and CEOs ready to harness this emerging potential.

Short-term IT investment mentality is shaped by how we define the challenges ahead and the need to deliver against financial market’s expectations on a quarterly basis. Those decisions reside ultimately with the CEO and the board of directors.

Ryan Mathews
BrainTrust

Yes, I believe that technological expertise is now a requirement for the job, and I respectfully disagree with those that feel the CEO needs to know, “what it does,” not “how it works.” The CEO doesn’t have to have the depth of skill of say, “the IT guy,” but she or he does need to have an independent, full understanding of how a technology works and what it is — and isn’t — capable of. Technology is just too important, in terms of overall budget allocation, systems efficiency, and customer experience. Attempting to optimize investment on the basis of superficial insights and understanding is a dangerous game.

As to the second question, tech vendors are doing that precisely because C-suite executives — with the exceptions of the CIO and/or CTO — don’t have the depth of context to fully evaluate the sales pitches they are listening to.

Cynthia Holcomb
BrainTrust

From my experience out in the “field,” I firmly agree with Ryan. C-Suite execs “do not have the depth of context to fully evaluate the sales pitches they are listening to.” Compounded by CIO/CTOs who do not have the full spectrum and depth of context to fully evaluate how a new retail technology will impact the human side of the retail customer experience and end-product supply chain.

Cathy Hotka
BrainTrust

I talk to retail CIOs every day, and every one of them says that obtaining the right level of tech investment is a struggle. In the age of Amazon, starving your technology department is senseless. The phrase “adapt or die” has never been more relevant.

Ken Morris
BrainTrust
Technology is not only a core competency, it is a competitive advantage and critical for success. Technology is an enabler or hindrance offering customers a frictionless and seamless customer experience across all channels. And without the right technology, you can’t provide customers the personalized experience they expect. Many retailers are saddled with legacy systems that are cobbled together to offer omnichannel services. Unfortunately this faux omnichannel approach is not working. We believe the best approach is to move to a unified commerce platform and leverage cloud-based applications for as many systems as possible. What would Amazon be if they hadn’t embraced technology early and often? It’s time to offer the Amazon experience in the store and that will take investment from both retailers and software vendors to revolutionize today’s staid retail store model. While this may be an extremely expensive proposition for many retailers, it is a necessary investment. The way retailers look at funding IT may need to change. Rather than looking at IT as a percentage of sales and keeping it the same… Read more »
Brandon Rael
BrainTrust

The main objective of the C-suite is to lay out the foundations for success, mission statements, financial goals, and objectives, and to set up the organization to achieve these. Technology is certainly part of the equation, yet from the C-suite perspective, it’s a means to solve complex business challenges.

Technology certainly is a top priority for retail leaders, however it essentially is the tools and solutions to drive increased revenues, improve margins, and most importantly enhance the customer cross-channel experiences. They have to care of course. But it’s all about building a team of executives within their merchandising, innovation, strategy and operations teams. Their main goals are to integrate the technology tools and business processes for success but also drive the critical change management initiatives to ensure that the technology is adopted with a business purpose in mind.

Cynthia Holcomb
BrainTrust
Let’s reframe the discussion. Twenty-plus years in, CEOs still do not believe technology is a core retail leader competency? IT teams, whose job descriptions require NO worldview or experience in retail (customer experience, building products inspiring a human to purchase, understanding the human decision to purchase) replace the CEO in tech leadership? Who thinks this makes sense? Flip the coin to tech vendors? Tech vendors have already realigned their value proposition to read like a business school textbook. Three disparate mindsets circling around and around. The result is that the CEOs need to sit down and care about tech. There has been billions of dollars spent on hundreds of solutions and still the promise of technology needle has not moved. The evidence: digital shopping still has a 3 percent conversion rate [97 percent do not buy] along with the deadly 40 percent+ return rate. Retail leaders must educate themselves. Only then will CEOs and leadership have the ability to filter and build solutions to cross the technology chasm in their minds. Put the third leg… Read more »
Dave Wendland
BrainTrust

As my co-owner, Shawn Theesfeld, and I discussed, “every retailer is now a technology company.”

Making this a priority from the top throughout the ranks of an organization is vital to success.

Doug Garnett
BrainTrust

Let me caution retailers. Yes, tech is critical to your future; not as “tech” but as tools to make your stores and operations better.

I fully agree with Paula Rosenblum’s caution about the shiny bauble (my term) syndrome that has caused significant problems for retailers.

I’d even suggest that a massive group panic think within the retail market has been encouraged by companies selling tech solutions as a way to create the fear, uncertainty, and doubt often used to force tech into places it shouldn’t be.

What should retailers do? Tech is maturing. It does not trump good retail store service. It does not become more important than having the right mix of products on the shelf. It will not bring people to the store.

But it CAN make all of that more efficient and more profitable and, sometimes, more effective.

Cate Trotter
BrainTrust
It’s all about mindset. I don’t think it’s necessary as CEO to be a technology buff, but you also can’t just wave your hand and ignore it. The problem with tech is that everyone wants to sell their piece of it — whether it’s right for that retailer and their customers or not. It may be that a competitor would be better or something different or nothing at all. But with so much out there, and appearing all the time, it can be easy for CEOs to bury their heads in the sand because tomorrow we’ll be talking about something different. What you need to do is to understand what you want to achieve in terms of customer experience or operations or personalisation or whatever, and then figure out the tech that can help (if it can help) deliver that. There should always be a real benefit to the tech, but to understand what that is you have to be willing to learn. If you don’t understand it then how can you determine if it’s… Read more »
Bethany Allee
BrainTrust

Unfortunately, retail orgs are leaning too heavily on tech vendors as advisers. And yes, this does cause short-sightedness. My company battles this daily — execs buy off on a sexy piecemeal solution because it comes from a big name and then it comes time to deploy … and they realize they don’t have the staff to not only implement it, but maintain it. And they haven’t considered the implication of the required downtime. Etc, etc. CEOs must have a baseline understanding of technology to have a forward-thinking strategy. OR a killer CIO/CFO/CTO who they can truly leverage as a partner.

At the end of the day, the retailer who does the best job of preparing for rapidly changing customer requirements is going to win — and technology will power this.

Sterling Hawkins
BrainTrust

The needed core competency here is the ability to grow, adjust and learn new things over time. Personally and as a business. The approach of “I’ve been running this operation for 30 years and I know how to do it” doesn’t fly in a world changing as quickly as ours is; and the pace of change is only increasing. When the leadership can step into the unknown and be willing to try/learn/do something new, it starts to set a tone for a culture that’s no longer just surviving, but actually growing.

Ricardo Belmar
BrainTrust

It’s not critical for CEOs to understand how the technology works, but to know what the enabled business outcomes will be. Without that knowledge, how can the overall business be expected to properly leverage new technology? There is absolutely a risk of “shiny object” syndrome and CEOs need to be careful not to fall into that trap or a “me too” trap by copying other retailers.

It’s also not as simple as just asking “the IT guy” to figure out how to best implement new technology — it’s a cross-functional effort that requires IT and the business to come together to understand benefits of any implementation. Where IT really contributes here is in understanding the “how” of each technology AND understanding what underlying infrastructure is needed to support it to ensure success. This is where implementations often fail — the devil is in the details!

gordon arnold
Guest

Information Technology (IT) is expanding into ever increasing facets of our lives quicker than ever before and is increasing in size and scope exponentially. Very Large Scale Information systems (VLSI) have been highly structured and specialized for decades. To expect a CEO, CFO, COO and any other non IT executive to have a working knowledge of current proven technology is simply preposterous.

Companies of any size must identify business needs, create an affordable plan and execute. Third party specialty IT companies are a great way to keep current at affordable prices. Companies must keep the door open for new and innovative methods from the established industry leaders.

Oliver Guy
BrainTrust

CEO buy-in to technology and board level understanding is critical. Multiple pieces of research show this and that when this happens the organisaiton performs better financially. Consequently shareholders need to be looking for this technology competence when CEOs are appointed.

Tech vendors vary in terms of their approach — however my feeling is that as technology (and software is first for this) moves towards subscription based pricing models, there is an incentive for the vendor to look after the customer and ensure they are successful for the longer term — they have “skin in the game” to ensure things stay long-term focused.

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Braintrust
"It’s time to catch up with the times. Otherwise, emotional decisions that lead to 'magic bullet syndrome' will continue."
"Technology is not only a core competency, it is a competitive advantage and critical for success."
"...it’s all about building a team of executives within their merchandising, innovation, strategy and operations teams. "

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