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Interview with Lori Hawthorne: Disruptive Retail Puts Tech First (Part 2 of 2)

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disruptive retailAfter an awesome trip to eTail West, we sat down with Lori Hawthorne, Divisional Director and Senior Retail Analyst of Worldwide Business Research, to learn about the latest strategies in disruptive retail. In the first part of our interview with Lori, we talked about unified commerce eclipsing omnichannel as the biggest retail trend in 2018.

In part two of our interview series, we discuss how today’s retail disruptors, from Warby Parker to Bonobos, put technology first.

RB.AI: I’ve read in a few online interviews you’ve done about the notion of retail being at a tipping point. You’ve been in the retail space for some time, so is it safe to say that you’ve seen several evolutions occur already in the past few years, similar to the shift from omnichannel to unified commerce?

LH: I think the tipping point that’s being reached now is that retailers have to be technology first organizations. In the past, it was very much about being able to optimize one channel. For example, to make sure that if I have a store presence, I’m driving traffic to that store. If I’m an online only company, I have to get my online sales up and I’m only concerned about conversion rates. Now, for companies to survive in this quickly evolving industry, they have to make sure that all of their channels are optimized and they’re thinking much more holistically about them. This means having a mobile site and being aware of the changes that Google is making in terms of the way they are ranking companies based on how mobile-friendly they are. Making sure that every channel is directly tied to their online channel. Making sure even that even with their contact center, they’re really thinking about that experience from the consumer perspective and using technology to help drive it. That’s why I think AI has been really effective in terms of automating live chat. It’s a way to create a technology-driven experience that is still very responsive to consumer needs, in real time.  It doesn’t “feel” technology-driven – often times, consumers don’t realize they’re chatting with a bot instead of a real person.

There have been a number of companies that are “disruptors” that are born and bred online. They’re not necessarily thinking about themselves as being retail companies first but more as technology companies that happen to sell a product. So if big-box retail companies can adopt more of that mindset of how can I become more of a technology company and be very technology driven in everything that I do to service my customer? That’s going to help them keep pace with consumer expectations today.

RB.AI: Can you name some of those disruptors in the retail space?

LH: Many of them have actually been acquired by big-box retailers. Companies like Warby Parker and Bonobos are great examples. These are companies that have really dominated within their specific vertical and have become technology companies first. They’re agile, responsive to consumer needs, they’ve tested out offline channels, and before investing heavily in stores they started with pop-up concepts and things. There are a lot of companies in that space that are highly disruptive. There are also companies not even within the retail space that those companies can look towards to get inspiration from like the Airbnb’s and the Ubers. Those are the biggest disruptors overall in the online space so there are definitely some lessons to be learned there too outside of retail that they can try to adapt to their business.

RB.AI: What are some lessons that retailers can learn from Airbnb and Uber?

LH: I think for Uber it’s really about convenience, and being able to be really responsive to their customers. Uber was able to disrupt an industry that wasn’t changing or evolving. And they have a really easy to understand, technology-driven and convenient business model. They have been able to roll out different products and service based on their customer needs. I think that a program like UberEats was really just launched because they were getting feedback from their customers, such as I would love to be able to use an Uber-like service to have food delivered. That’s something that would make my experience with Uber more convenient, it would allow me to go back to the brand time and time again, and it’s going to make me want to spend more money with them. And so they rolled out the service and it’s been really successful for them.

Airbnb is slightly different but the premise is the same in terms of being disruptive in an industry that that was not rapidly evolving. Especially when it comes to the use of technology.  And it allows users, owners, and renters to have a lot of control within the use of the platform. Airbnb is a platform that empowers its customers.

RB.AI: Can you share examples you’ve seen in the retail space of companies that are disruptors and what technologies they are using to rival offline retail?

LH: I think overall most of the disruptive retail companies are online only companies. I can’t really think of a brick and mortar company that’s been disruptive in a way that online companies have. And the way that they are building their systems is they’re making sure that the technologies they’re using are the kind that allow them to make changes quickly. I think the biggest challenge for brick and mortar retailers is dealing with these legacy systems that are extremely difficult to operate and change and are major investments. They also have all of these systems tied in across all of their different stores, trying to make them talk to each other. When online companies are thinking about going offline, they already have the core systems in place. If they need to make changes, if they’re trying to be really flexible and adjustable to customer needs, they’re able to do that a lot more quickly. They’ve eliminated that barrier that comes from their back-end technology.

RB.AI: That’s interesting. Could you elaborate a bit on what some of those legacy systems are?

LH: Usually it’s just the core platform system that they are using and the ancillary systems that comprise the back-end. It could be their e-commerce platform, their POS system, their CRM system. Let’s say they needed to make a change around a web experience they were offering, but they’re not able to be as responsive as many online-only companies are because of these legacy systems. There were some retail companies years ago who told me that they were still working off of excel spreadsheets! It was almost a paper-based system they were using for CRM. I am not even sure how to begin to reconcile that.

I think that the biggest challenge that I saw across the board was extreme silos between different departments. Some companies were thinking about their online channel, which was still growing, as being in competition with their offline channel. They were thinking that this trend was going to steal sales from their offline channel. That thinking has definitely gone away. But it’s still very difficult when the systems that we use are not built around thinking about having a channel agnostic experience on the front end.

Breaking down these silos and bridging the online and offline experience for consumers are just some of the topics that we’ll be covering at eTail East, from August 6-8th at the Sheraton Boston. 

disruptive retail

Lori Hawthorne is a Divisional Director at Worldwide Business Research (WBR), overseeing the successful production of the company’s portfolio of B2B retail and e-commerce conferences including eTail, Future Stores, and B2B Online. She also tracks and researches the key trends shaping the retail landscape as the company’s Senior Retail Analyst, speaking regularly with senior retail executives from both Fortune 1000 companies and innovative startups alike to uncover the current and future pain points impacting retailers. A native New Yorker, Lori holds a BA in Fine Arts from the University of Virginia.

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Meredith Lackey

About Meredith Lackey

Meredith Lackey is a content producer with expertise in computer networks and systems. She received her B.A. in Philosophy from Hampshire College, and her M.F.A in Moving Image from the University of Illinois Chicago. Her output spans long form writing, B2B and B2C content, and branded video content. Meredith has worked with Tony on creative projects and at Boopsie since 2014. She loves gritty travel experiences where she can learn about diverse people and new trends.

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