The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

The Five Pillars Of Consumer Technology And Retail

Ray Wang published a great piece on innovation in enterprise software last October, which I found last month, and the only reason it’s taken me this long to write about it is because I’ve been trying to absorb what, exactly, it means for retail.

The short version of Ray’s thoughts: there are 5 pillars of consumer technology, and more innovation in enterprise software is coming from these pillars than from the software companies themselves. The five pillars are mobile, social, cloud, analytics and game theory, and video and unified communications. Think of things like’s Chatter as an example of where a social network activity stream has been taken into an enterprise software capability.

I’ve long thought that the retail industry is in a unique place when it comes to the intersection of enterprise and consumer technology. It’s one thing when the executive team shows up with iPads and insists that the company support them. It’s another thing entirely when customers start showing up with smartphones, wanting to access the retailer’s shopping app over the (possibly non-existent) WiFi network in the store.

I always have a sense of supreme irony when I consider that kind of situation. Here is an industry that historically has had to be dragged, kicking and screaming, into any enterprise technology investments. Where, according to RSR’s 2010 Benchmark on IT Alignment, almost a third of retail respondents reported that they have no IT Executive Steering Committee, as but one example.

I have come to the conclusion that resistance to technology is nearly institutional in retail. I once had to argue with a small business owner (and my boss) that I was not going to check the math on computer-generated invoices to make sure that our suppliers weren’t cheating — something she was as convinced of as the inaccuracies of scanners. Her arguments against the latest in technology sounded eerily similar to those that came out of the mouth of the Director of Store Systems of a major retailer, defending his decrepit and ancient POS software that was only up for replacement because the hardware it was specifically developed for was no longer going to have spare parts. That company is no longer in business, by the way.

And now, retailers’ IT strategy is rapidly being dictated by the technology that happens to be in shoppers’ purses when they walk through the door of the store — or, even more challenging, dictated by whatever other tabs they have open on their browser when shopping online from home. When your success with your customers depends on how well you can adapt to their breathtaking adoption of personal technology, you’d hope that this might be something of a core competency for your company — and in retail, you’d be wrong.

However, all is not lost. While it’s not a retail core competency, we have seen big changes in retailers’ approach to consumer technologies in the last few years in particular — especially now that the procession of distractions over the last decade (starting with Y2K, moving through PCI, and wrapping up with a major recession) seems to be nearly over. In all of those cases, retailers didn’t really have control over their IT strategy, but for completely different reasons than consumer technology adoption.

But what shape are consumer technologies taking within the retail enterprise? I’d like to highlight three that I think are particularly interesting (and challenging) for retail: mobile, social, and video.


Retailers, like everyone else, have had to deal with an influx of personal devices as part of the enterprise IT architecture. The best advice I’ve heard from a CIO struggling with an executive team in love with their iPads: whatever devices the C-team walks through the door with, buy a couple more and give them to the Help Desk team right away. But it’s the other end of the corporate hierarchy that promises to be the most interesting in retail. As soon as a retailer installs WiFi in stores for customer use, what’s going to stop employees from bringing in their own devices to ride on that network?

The key question here is do you want to stop them, or do you want to welcome them with open arms? An employee-only app that’s available in the iTunes store? Where they have to log in with their employee ID perhaps? Where the cost is only in the software and not in supplying handsets that are either so enterprise-hardened that they may not be stolen but do cost a fortune, or so desirable as a consumer product that you’d never be able to keep track of them?

Store employees aren’t waiting around — I saw for myself an employee with a personal iPod Touch riding on his store’s customer WiFi access. And he was using it to help customers. The store manager loved the initiative, loved that this employee was actually providing better service by having his own device in hand, and hated the fact that he no longer had any visibility into how, exactly, this store associate was helping customers — because it was all off the enterprise grid.


Ray’s prime example of social in an enterprise setting is activity streams, a la’s Chatter. When you work for a small company like RSR, it’s hard to see something like that as any different than, say, instant messaging. However, with what companies like Facebook have done with automatically updating news feeds — that does change the game. And I could see a benefit for stores, where task management in particular is hard to manage. Could you imagine a store activity stream: Amy just opened register 3. Joe just marked the men’s restroom as clean. Mary just finished the end cap reset on aisle 5. Or how about an internal-oriented Twitter for store associates: Customer asked about this warranty — found the answer at

From the rise of the retail chain, retailers have struggled to strike a successful balance between central management and local control. The store can be an especially isolating place, where the only attachment of employee to company is through a store or department manager, and the only coworkers that employee knows are the people he or she sees on shift. An internally-oriented social network might help create more attachment in workers that often experience upwards of 100% turnover per year. And it might just help them serve customers better while they’re at it.


Last but not least, I want to address video. Retail has played around with video for a long time — and not just as a customer-oriented thing. Back before centralized buying, JC Penney would use satellite time to broadcast the latest fashions to store buyers. Many a company, retailers included, have played around with video-based training. There have been multiple tries at connecting customers with the best available associate via video conferencing (remember Experticity?). Companies like Home Depot have also been successfully employing YouTube to help deliver how-to videos for customers trying to learn do-it-yourself projects on the fly.

But video in the enterprise — I always picture the swiveling view screens from the movie Demolition Man, which now seems eerily prescient — I just didn’t see that as having a lot of impact. That is, until I sat between two CIO’s at a user conference, where they gushed about their video conferencing capabilities. One CIO also happened to be the VP of Supply Chain, and he said he couldn’t imagine staff meetings with all of the distribution managers without video conferencing. Sociologists and linguists have been arguing all along that in-person communication conveys the most meaning, and that much is lost when it’s voice only (or worse, a terse text-only exchange). We even tried it at RSR, using Skype. It worked. But I think we were somewhat distracted by the novelty of the medium.

However, where video gets interesting to me is when you combine cameras and data. Augmented reality holds promise, for example, by providing a data or analytics overlay on a real-world image. Could you imagine walking a store and seeing a real-time feed of which displays were doing well and which weren’t? Which out-of-stocks had more stock in back or when the next shipment came in? Seems too sci-fi? Go check out the two Demolition Man links above.

And make fun if you like, but is Google’s gesture-mail April fool’s joke that far-fetched? A keyboard, ultimately, is a more limiting user interface than a person’s whole body. Otherwise, how would you explain the wild popularity of Microsoft’s Kinect or the Wii?

I got the sense that Ray intended his piece at least as much as a critique of the enterprise software industry as a sendup of consumer innovations that are invading the enterprise. For my part, I think he’s partly right. Why does it take a revolt from employees seeking to bring consumer innovations inside the enterprise to enable access to innovative thinking in how to make people more productive and/or connected? But while it’s easy to point the finger at fat-cat software vendors living large off of ridiculous maintenance fees, I have to ask — how many companies come to those vendors with demands for innovations only after their own employees have blackmailed them to support a consumer technology?

For software vendors, innovation is great, but only as long as their customers are willing to give it a shot. When it comes to that kind of experimentation and risk-taking, I think retail is one of the most conservative industries of the bunch.

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Articles & Opinions May 3, 2011
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