RSR had the opportunity to participate in a retail CIO-focused event on August 29^th, hosted by CDM Media. CDM offers CIO summits for a number of industries (for example, they held events for consumer products and financial industry CIOs before and after the retail event), and the company has developed a successful formula for delivering a lot of focused content in one no-nonsense day. At the Scottsdale, Arizona event, seventy five retail IT leaders, including representatives from Walmart, Costco, Guess, Petco and Sears among others gathered to discuss the pressing issues in today’s retail IT world. And without any question, what was most on the CIO’s minds was mobility, “the cloud “, and next generation BI.

One speaker, Scott Kitlinski of Akibia, summarized all of the day’s content and conversation with this list of “realities “:

• Consumerization is happening
• Process before technology
• “Big data ” is getting bigger
• Costs matter – but “impact ” matters more
• Un-harvested value is rampant
• Security is a pervasive issue.

Virtually every session at the meeting included a discussion of opposing demands: the need to adopt new technologies based on solid ROI projections vs. the need to “catch up ” with digitally empowered consumers. As Sears CTO Dr. Phil Shelley said about technologies used to help retailers make something useful out of big data, “We don’t know what the ROI is – nobody does! ” But Hermann Nell, CIO of Petco, reminded the assembled during his presentation that the issue facing retail IT leaders is also organizational: CIOs need to align their organizations to be able “to quickly respond to the changing needs of your company. “

Enabling Next-Gen BI

It’s almost unavoidable that any discussion about Retail IT will land on the subject of big data. Sears’ Shelley put it simply, that (and I paraphrase) “big data is just a lot of unaggregated and frequently unstructured data that might, when analyzed, have some undiscovered value that retailers really need to know. ” The CTO specifically talked about Sears’ work with HADOOP technologies (open source technologies that enable companies to examine massive amounts of unstructured data). According to Shelley, HADOOP is an ecosphere that will change how you:

• Capture your data
• Store your data
• Structure your data
• Analyze your data
• Manage the costs of data storage
• Control the size of your data
• Expand what you can analyze
• Improve the speed of analysis
• Change the skills of your team

That’s interesting stuff, but not all the CIOs at the gathering agreed that getting into open source technology is the answer to gaining the advantages from analyzing big data (for example, several stated a preference for Netezza or Teradata systems).

But what all agreed is that CIOs need to find a way to reduce the strain on legacy systems from new business requirements, reduce the cost of supporting them, and enable the creation of new business opportunities. And who is the business executive that is pushing retail IT’ers to address thes issues? The CMO, that’s who (that’s why in the forthcoming RSR benchmark entitled Marketing in Retail: Making the Case for the CMO, published this week, makes the claim that “the relationship between the CMO and the CIO could form the power duo of next generation retailing – but only if those two executives join as true partners “). New customer-facing capabilities that the CMO is a key sponsor of, live almost exclusively in the “digital domain “, and that means lots’n’lots of very granular data (big data) that must be understood to create value and profits.

Mobile, Mobile Everywhere

As one speaker put it, nowadays mobile is the “first play ” for retailers, who then work their way back to their more traditional web-based capabilities. This is a remarkable claim, but was accepted as truth by the assembled CIOs, and it reflects what we have heard from technology vendors themselves (for example, SAP has stated that the mobile interface is their primary development target).

Of course the question is, what is the business imperative that demands that response? Technologists from Safeway, SuperValu, Ralph Lauren, and Lilly discussed that question. Echoing what RSR has learned through our own research, there seems to be a clear line emerging between specialty/apparel and fast moving consumer goods (FMCG) retailers. Ralph Lauren and Lilly are focused on customer facing assisted selling or endless aisle capabilities, whereas grocers Safeway and SuperValu are focused more on back-office functions (with the objective of getting them out of the office and onto the sales floor).

When it comes to customer-facing mobile capabilities, the representative from Ralph Lauren flatly rejected the notion of technology replacing customer service employees. “We’re not willing to give up the personalization opportunity during the process, ” he said, “we want to keep the employee involved, to walk the customer through the process. ” The grocers in the discussion weren’t content with enabling the store manager or merchandising replenishment teams. They are looking forward to “the magic of check-in ” (as one technologist said). Specifically, those retailers are experimenting with “geo-fencing ” capabilities that will enable them to touch consumers with value offers at just the right moment in the store shopping experience.

There was no consensus among the retailers about the use of mobile as a next generation POS, either customer or employee activated. And the retailers said that they are definitely taking a wait-and-see attitude about next-generation payments. As the Safeway representative said, “we’ll probably have to support them all. “

One point that four retailers agreed on: whether for customer-facing or back-office mobile enablement, the best way to get permission to experiment is to get smart mobile technologies into the hands of the executives first.

What about the Cloud?

There’s been a lot of talk in the technology industry about the efficacy of cloud delivery of business solutions. None of that has to be repeated here now. What the retailers at the CIO Summit agreed on is that it’s mobile that is driving cloud adoption more than any other factor. As one attendee put it to me, “Instead of forcing people to go to where the applications and data are, we want the applications and data to go to where the people are. ” That’s both a mobility and a cloud statement.

That comment also provides the bottom line for all the discussions during the Retail CIO Summit: people (both consumers and employees) are on the move, and so retail business processes and the technologies that support them have to move too. And since we’re not talking about a stationery environment, retailers need to track not just the final transaction, but also the movement itself, so that it can be analyzed quickly enough to influence which next step is taken.

RSR has stated often that the retail industry is at a true reset moment – and it’s clear from the gathering of IT leaders that what that means in terms of information technology is becoming more clear every day. But as one speaker bluntly put it, “There’s an 18-24 month window of opportunity for retailers to figure this out. Then there will be a great consolidation, and laggards will fall by the wayside or be swallowed up. “