At the RIS News Retail Technology Conference held in Orlando, Florida last week, there was ample evidence that retailers have overcome their skepticism about consumer enablement with smart mobile consumer technologies such as the iPhone/iPad, Droid, etc. RIS News even handed out best of mobile app awards, to Lamps Plus, Toys R Us, and usual suspects Home Depot and Best Buy. In a funny aside that gives some indication of just how fast the industry is moving in response to consumer expectations for mobile, one recipient, a store operations executive, said “When I heard we were receiving this award, I had to ask someone, ‘We have a mobile app? What does it do?’. “

Attendees at the event underlined what RSR has seen in its recent research; that retailers have moved from denial to serious consideration when it comes to consumer digital enablement — in less than 2 years. But that’s a good thing — it closely tracks to the theory of the cycle of change: pre-contemplation (often characterized by denial or minimization), contemplation (the back-and-forth dialogue between consideration and rejection), determination (acceptance of the need to change, examination of choices), action ( “get ‘er done! “), and finally, maintenance (operationalizing the change).

It was clear at the conference that most retailers who attended hover between the 2nd and 3rd stages of the change cycle, with notable outliers at either end — those who are leading edge adopters (such as keynoter Jon Kubo, Sr. Vice President & Chief Information Officer at The Wet Seal) and those who are not considering consumer mobile commerce or social media at this time. But as Jeff Roster of Gartner noted while reviewing results of the 10th annual RIS News/Gartner retail technology study, the 21% of that study’s respondents who reported that they are not planning to mobilize for mobile need to consider what the competitive landscape will be like when the other 79% succeed in implementing new consumer-facing capabilities.

The Fundamentals of Retail, Revisited

Tom Friedman, founder of the now-bygone Retail Systems Alert Group, a B2B company that loomed large in retail thought leadership in the ‘90’s through the mid-2000’s, developed — with the help of several prominent CIOs — a map of the retail operational model called the Retail Enterprise Roadmap. The map was deceptive in its apparent simplicity; it divided retail into four distinct activities. They are: Planning, Buying, Selling, and Tracking. The roadmap is useful now to recall, because it helps to visualize what we as an industry have been doing with technology enablement for the last 30 years. Much of the industry’s technology investment between the 80’s and year-2000 can be explained as having to do with bringing the full benefits of scanning to the business. And the most successful retailers of all focused primarily on eking those benefits from Buying activities — the supply chain. In the context of supply chain mastery, in-store techs like POS were not implemented to make the consumer experience better, but to make buying better. And as majority of retailers know down at the DNA level, profitability in this industry is driven first by how well you buy, secondarily by how well you sell.

But that was so 20th Century! What about now? The industry got fair warning from consumers in the late ‘90’s that we needed to pay more attention the Selling activity, with the adoption of the web as a viable channel for both content and products. But as RSR has been repeated often and loudly, the notion of the omni-channel model really kicked into hyperdrive with the massive consumer adoption of smart mobile techs. Consumers showed conclusively that they weren’t going to sit passively and let retailers push products at them. Remember that the iPhone was announced by Steve Jobs not long ago — at a January 2007 event. Now, as retail veteran and NCR exec Rick Chavie stated at the conference in Orlando, it’s no longer B2C, it’s C2B: consumers have taken control of the dialogue, and they insist on being (digitally) heard.

And so, retailers are running pell-mell towards mobility and social media.

Meanwhile, Rust Never Sleeps

While the benefits from scanning on the buy-side of the retail model enabled retailers to scale to sizes few of them ever dreamed of in the 1960’s, that is not to say that that side of the business is done forever. As a matter of fact, RSR’s recently published study Omni-Channel Fulfillment and the Future of Retail Supply Chain conclusively shows how consumers’ new shopping behaviors are having a disruptive effect on how retailers operate in all the activities of their business in order to offer a consistent brand across all the selling channels. Sure enough, the RIS News/Gartner study revealed that there’s a lot of new focus on allocation, replenishment, category management, forecasting & planning, and assortment- in short, the basics of the buy — side of the retail model. “It’s like painting a bridge “, as one CIO told me; “We’re never done. “

And that creates a tremendous challenge for retailers going forward. Not only do they need to invest in support of the new omni-selling channels, retailers need to re-invest in technologies to support their supply-side activities. According to Gartner’s Roster, 53% of survey respondents self-identified as late adopters, 36% as quick adopters, 6% as leading edge, and 5% as non-adopters. Forty-nine percent of the survey respondents indicated that they will increase IT spending — but from a depressed 2009 base, i.e. spending will not rise in the next year to pre-recession levels. And only 18% of the study’s participants indicated that they are investing in “advanced IT infrastructure with deep integration “, meaning, they aren’t necessarily recognizing the need to think holistically about their operational model.

RSR’s omni-channel fulfillment study shows that Retail Winners do think holistically, and that’s a behavior that other operators really need to emulate. Consumers are already way ahead of them all — they are the true leading edge adopters.