Planning for a Profitable Retail Future at eft’s Inaugural D3 Conference
By Hugh Williams, managing director, Hughenden Consulting and D3 conference chair
During my recent visit to Brooklyn to chair eft’s inaugural D3 retail conference, I felt a real sense of what our excellent keynote speaker Jim Tompkins meant when he talked about ‘metamorphosis.’ In my youth, Brooklyn was a risky place for an Englishman hailing from the shires to lose their way in a shiny new rental car! Today Brooklyn is one of New York City’s priciest boroughs, where nannies with double pushchairs jockey for café space with bearded hipsters sipping flat whites.
Brooklyn’s gentrification is an apt metaphor for the many changes happening in retail due to digital transformation. Both happen very gradually yet feel momentous and inevitable. Many welcome the change, while some actively resist it. Still others want to delay it, making important decisions using selective data and wishful thinking. Companies like Kodak and HMV are notable examples of industry giants that drastically underestimated the uptake in digital media to their detriment.
Supply chain leaders at D3 are in the first camp, acknowledging the need for new ideas and action. They know it takes much more than a pretty website to survive and profit from the digital revolution. Stories from brand leaders like Home Depot and CVS drove home the importance of optimising the extended supply chain, starting with accurate demand sensing, providing a fast, friendly, secure and easy customer experience through all channels and delivering products and services to customers, when and where they want them - and at the best price possible.
Making smart trade-offs on multiple dimensions can be mind-boggling to many supply chain professionals. It is tempting to take knee-jerk decisions like skimping on ethical sourcing or human customer service in order to provide something a competitor is offering, like same-day delivery. This can lead to costly crises down the road if customers’ needs and the total cost of ownership aren’t understood. In a fascinating debate led by Wall Street Journal’s Loretta Chao, pioneering retailers Target, Home Depot and Aldo shared supply chain strategies to plan for the “consumer of the future”.
D3 delegates learned that companies don’t need to resort to trial and error today thanks to IoT sensors and data analytics tools becoming easier to use and much more affordable. Google’s Head of Retail, Brett Goffin explained how delegates can use his company’s free analytics tools for more accurate forecasting and demand-planning, procurement, merchandising and inventory management. My ‘Fireside Chat’ with Daniel Purefoy, VP Supply Chain Strategy & Engineering, Michael Kors talked about how to use the wealth of data flowing through his channels to make informed decisions about where to invest based on cost and speed.
Providing trading partners agree to be transparent and honest, all this data supports better ways of collaborating and achieving genuine win/win negotiations – processes which I’m currently helping several clients to improve upon. During a session I moderated with The Gap, Birchbox and Teradata, we discussed ways for analysing data to improve stock availability, increase revenue and save costs using real-time shared inventory data, collective demand-planning models and pooled decision-making.
Bearing in mind that this retail metamorphosis will profoundly affect people and recruitment, we finished up day two with an interactive discussion on “Cross-Functional Collaboration and Establishing an Omnichannel Work Culture”. Software is not enough. Retailers will need to employ skilled data analysts and also business experts who know the right questions to ask of them. They will need the right mix of people to deliver human and interactive online service and serve as in-store brand ambassadors. Shop floor assistants will need training on how to understand and serve customers depending upon where they are on the omnichannel journey. When a customer enters a shop they may likely have already researched the product they want online and just want to find, inspect, pay and go. Selling to this type of customer takes a completely different approach to selling to the customer who starts out ‘just looking’.
I am incredibly proud to have chaired this outstanding, highly praised event. My favourite comment came from Brendon Gredig, General Manager, Supply & Logistics for Smiths City Group who had travelled all the way from New Zealand to take part. He told me that it was well worth the long flight and expense to meet “some of the best minds in retail logistics” and had really appreciated the interactivity of the sessions and the networking opportunities.
I expect D3 to be an eagerly anticipated annual event where retailers embracing and adapting to digital transformation continue to share their triumphs and lessons learned to benefit the industry as a whole. It’s not always going to be plain sailing, but as one of my one of my favourite Brooklyners, Mel Brooks, famously said: “As long as the world is turning and spinning, we're gonna be dizzy and we're gonna make mistakes.”
On that note, I hope to see you next year at D3 2017. This year’s event was a sell-out, so register here to ensure you secure your space early!