2017Issue4_Alabama_v3_COVER_Proof

VIEWPOINT

“Technology can change the way business interacts with consumers, but there is an epiphany that must precede the tech choices that businesses must make.”

Relonch takes the position that it is in the photograph business, not the camera business – so it essentially gives its customers a high quality camera which automatically sends photos taken back to the company, which then sends the customer a preview version of those pictures, and you pay $1 apiece only for the ones you want to keep. This got me thinking… What would happen if a food retailer went to a customer and said, “We want to give you a new refrigerator/freezer, and all you have to do is commit to buying $200 worth of refrigerated or frozen foods a month from us for X number of months.” I have no idea how the economics of this would work, and I suspect that most retailers would find this unworkable. But I also wouldn’t be surprised if Amazon announced such a program next week. Which I think was the point of a trip and the GMDC conference. Pretty much everything is possible. Tarpenning said that it usually is easier to create a disruptive culture in a start-up company than it is in an established, legacy- based company. I think that is true – but it is an explanation, not an excuse. To compete in the 21st century, it strikes me as critical to understand that new competition can come from anywhere and everywhere, and that this new competition is likely to have a disruptive culture based on questioning traditional assumptions. Competing with such entities won’t be easy. And it seems to me that one of the first things retailers have to do is look at themselves and pose one simple question: If we were starting this company tomorrow, how would we do it? ■

universe – and see some of the unique retail concepts that are being funded by tech guys with big bucks. Some of them are pretty out there, but still can offer lessons for more traditional retailers. For example, there was B8ta (pronounced “Beta”), a fascinating retail store that caters to both consumers and business customers. Essentially, the store leases out small spaces on Apple Store-like tables to technology businesses that want to test out their products’ viability. The products range from electric-powered skateboards to juicers and virtual reality viewers to high- tech security systems. B8ta has a highly trained staff that helps guide customers through the store, and rotates products regularly to make sure there is variety; it also has technology that is able to track how customers interact with products, so suppliers have the maximum amount of actionable data. B8ta has a full supply of products for customers in the backroom, and it only profits from the table lease payments; it takes no cut of the sales. What B8ta made me think about, though, was how retailers may want to approach the whole notion of new products if they want to infuse their bricks-and-mortar stores with excitement and make them a destination. Maybe there should be whole sections of new products with generous sampling available that are used not as a way to get money out of the manufacturer, but as distinguishing the retailer from both online competitors and the guy across the street. We also visited a store called Relonch, which is designed to address the precipitous decline of the traditional camera business – 10 years ago, 127 million cameras were sold, a number that was down to 20 million last year.

In other words, if you are operating a business in a digital world with a rotary phone mentality, you simply cannot succeed. “Ninety-eight percent of the economy will be impacted by digitization,” she said. “And, 65 percent of children entering primary school today will have jobs that don’t even exist yet.” But if those comments pointed to a future that requires imagination to envision, Maffei also talked about Google’s approach to business that is rooted in everyday realities. For example, she asked if the businesspeople in the room (and outside the room, for that matter) are “setting goals that go beyond accepted industry standards.” She talked about the notion of banishing the notion of “online” and “offline,” and focus on “all-line,” creating a new standard that is “seamless” and “end-to-end,” establishing “lifetime value” that is not just transactional. And while technology obviously is a driver – and the notion of voice-activated, artificial intelligence-driven, screen-less and wearable computers would seem to propel us into a Star Trek-like future – Maffei actually suggested that retailers not start with technology as they establish priorities and strategies. Rather, they should start by thinking about what problem they are trying to solve, and what pain points in the consumer experience they are endeavoring to eliminate. Technology can change the way business interacts with consumers, but there is an epiphany that must precede the tech choices that businesses must make. One of the things that a visit to Silicon Valley offers is a chance to visit communities like Palo Alto – where net worth and IQ are in a constant race to see which one will be higher compared to the rest of the known

15

ALABAMA GROCER |