Few sectors are changing as fast as retail, and selling into top retail organizations has never been harder. Technology trends in retail industry plus increased competition, a shifting business landscape, and major concerns over data security and customer privacy mean the sales process is longer, more nebulous, and riskier than ever. But for those fortunate few who manage to penetrate new accounts, retail can be a virtual goldmine for today’s SaaS vendors.
So how do you make it work?
To find out, we recently held a webinar featuring Johnathan Tate and Fred Pond, former IT execs at Nike and Columbia Sportswear, respectively. They shared insights on how to survive selling into an industry that’s been (in some cases literally) disrupted to death and took savvy questions from audience members, all in the interest of demystifying today’s retail landscape and helping sellers navigate the sales process with some of today’s biggest brands.
Living Through Retail’s Age of Disruption
From the old days of brick-and-mortar retailers to the new normal of e-commerce, our Emissaries have firsthand experience with the chaos caused by technology’s disruption of the retail space. That gives them a level of insight few possess, and they were more than happy to share it with our audience.
As an IT exec at Columbia, Fred watched as tech disruption shrank or outright eliminated many of the brand’s big-box distributors. That, he said, was a major wake-up call, leading the brand to realize they could no longer rely on major retailers as the sole commercial outlet. To overcome that, Columbia reorganized around four core brands, each with its own president and strategic vision. This also meant that Columbia’s IT team was faced with managing different tech stacks and priorities, as well as building the infrastructure for an all new direct-to-consumer experience.
Meanwhile, Johnathon was cutting his teeth running global shared services and data ops for Walmart. There, he witnessed the world’s largest company by revenue repeatedly break the backs of IT vendors that couldn’t support the big-box giant’s massive scale. Later at Nike, Johnathan also saw a shift to a direct-to-consumer model—and the challenges and opportunities that it presented to IT.
With so much experience on the front lines of major IT operations, Fred and Jonathon are uniquely positioned to explain where retail and IT have been in the past, where they’re going in the future, and how to effectively sell solutions to them today.
Traditional Retail: R.I.P.
What’s the forecast for traditional retail? Johnathan was unequivocal: “Retail as we knew it is dead.”
Today, he noted, when consumers see products in physical stores, they’re instinct generally isn’t to make a purchase on the spot. Instead, they’ll go to e-commerce platforms, clicking until they land on, say, a better price or more desirable style option. Yet retailers have begun responding to this behavior only recently.
For instance, retail leaders are taking advantage of new tech to minimize inventory and overhead, while using analytics that factor in users’ social media posts, cookies, and search histories to provide more personalized experiences online.
Some companies have gone farther, too. Think AI-powered mannequins attired in clothing that changes colors and patterns based on what customers in the store or passing by on the street are wearing. As both Emissaries pointed out, this is just one example of how tech can enable greater personalization and customer-centricity, both of which can drive demand.
And these changes are just the tip of the iceberg. Tech disruption in retail isn’t going to slow down any time soon. In Fred’s view, that means any retail solution built today must be implemented with the knowledge that requirements and user behaviors are going to change—and change soon. That means new systems will need to be flexible, scalable, and readily adaptable, and that most massive, monolithic technologies will be dead in the water. So instead of trying to plug in a pre-built solution, Jonathan counseled vendors to focus on selling consultative, collaborative solutions that can adapt to brand-specific needs. That way, you’ll have a much easier time closing deals.
Technology Trends in Retail Industry: New Role, New Concerns
Most leading retailers today are seeing the light on IT’s role as a strategic function, rather than a cost center. As Fred explained, that means retailers are gradually making the shift from seeing IT as CapEx—a capital expenditure, like procuring new tech or upgrading existing systems—to OpEx—an operational expenditure incurred in the process of running a business. And much of this, he said, is thanks to the flexibility and scalability of cloud vendors.
Johnathan also stressed the importance of flexibility—the lack of which, he pointed out, has made many IT stakeholders hesitant to fully adopting a cloud presence in the past. Why? Because of the concern that putting all of their digital eggs in one vendor’s basket would be tantamount to putting their data “in jail,” making hard or even impossible to migrate to a new solution down the line.
Another concern that both Emissaries addressed had to do with personalization. Namely, how can retailers use technology to gather the right data points and deliver meaningful personalization? Jonathon pointed out Under Armor’s 2015 acquisition of My Fitness Pal as an example of the investments brands are making in order to solve this problem. The acquisition gave Under Armor insights into users’ activities, the gear they wore when they did it, plus geolocation data to learn where users were. That way, the brand could not only tailor their offerings but customize retail stock for locations based on in-market demand.
How to Sell IT Solutions to Today’s Retailers
When asked about the best possible experience with IT vendors, both Emissaries doubled down on the value of building genuine human relationships between stakeholders and sellers. This requires sellers to take a consultative, long-tail approach to the sale. It’s all about working to understand key business problems and identifying aspects or features of your solution that can address those challenges.
Johnathan also stressed the value of understanding the culture and team dynamic within a target organization. According to him, the smartest question an Emissary customer ever asked him was simply, “What makes the people and teams at Nike tick?” This, he said, is crucial intel because of the footwear giant’s team-oriented approach. Without understanding how a solution can empower team-wide success, sellers have little chance of moving forward with a potential deal.
So what doesn’t work? First and foremost, steamrolling through a demo and pushing a plug-and-play solution that allegedly works right out of the box. That, they said, simply doesn’t fly in 2019.
Another tactic that turns retail IT leaders off is what Fred called the “shotgun” strategy: hounding as many IT stakeholders as you can at a given company in the hopes that one of them will eventually bring you in for a demo. IT leaders talk, he said, so they’re going to see what you’re trying to pull—and they’re not going to like it.
Two Emissaries—former IT decision-makers at Nike and Columbia Sportswear—joined us for a webinar on selling into today’s leading retailers. They shared insights on the changing role of technology trends in retail industry, how the sector itself has been affected by disruptive new technologies, and what IT leaders want from SaaS vendors going forward. In the end, it’s all about building connections, understanding each prospect’s challenges, and customizing solutions to enable retailers to scale. That’s easier said than done, but if you make it work, you’ll book valuable new business in one of today’s toughest sectors for SaaS.