In RSR’s recent study entitled Marketing in Retail: Making the Case for the CMO, we said:

“The new selling channels ‘live’ in the digital domain, new media are digital, and virtually all the information needed to offer personalized and relevant products and services to a large group of consumers must be captured digitally… the CMO cannot succeed without the active support of the CIO. But it goes both ways: the CIO… has a big opportunity to be impactful by supporting the CMO. 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. “

Getting retail CIOs and their line-of-business compatriots to participate in the same event is often hard to do. After all, “CIO ” subjects tend to be about governance and “alignment ” or about technology, while business discussions tend to be about market competitive issues. That’s why there are events like NRFTech, the RIS News Technology Conference, and others. It’s a concession to the reality that IT executives just speak a different language than their business counterparts do.

But just as channels are converging and retail verticals are blurring, so are the lines between what is business and what is technological. Nowhere is that more clear than in marketing. And so it was fun to participate in an event called the NG Retail Summit last week in Orange County California. “NG ” not-so-modestly stands for “next generation “, and as if to prove the point that everything is converging, participants included both IT executives and retail marketing leaders from both pure-play retailers and “landed ” retailers. And the verticals were well represented: people came from luxury, fashion & apparel, consumer electronics, grocery, big-box general merchandise, automotive, hardware, and discount.

And regardless of the discipline that the speakers and participants came from or what retail vertical they represented, one unifying message emerged: “click’n’brick retailers need to bring “Internet ” marketing tactics to the store.

The Emerging Story Line

RSR was at the NG Retail event as the “analyst partner “, and one of our tasks was to summarize the main messages of the event. As the speakers presented their various points of view, a consistent storyline emerged:

1. “Omni-channel ” is real and is the generally accepted model for next generation retail. It’s time to give the model a new name- it’s a channel-less buy anywhere/get anywhere selling environment. Consumers don’t “see ” channels; the vast majority of consumer purchases are researched online first. And according to one study, 98% of purchases over $400 are researched in the digital domain first.
2. “Legacy ” retail executives, particularly in the fast moving consumer goods vertical, are the most challenged to accept the new selling model, and their companies are in the most danger of being disintermediated as new direct-to-consumer models proliferate.
3. Nonetheless, digital is “in ” the stores whether retail execs accept it or not. Consumers are using smart mobile technologies to assist in their purchase decisions with search. The top consumer searches are:
   1. Price comparison
   2. User reviews
   3. Social sites (female shoppers) or expert opinions (male shoppers)
4. Customers are smart and nimble, so store employees need to be too. A quoted research report showed that 73% of consumers prefer to use their smart phones rather than to talk to a store employee. For the store to remain relevant, employees need to be accurate about product and customer information wherever it is in the enterprise. This is driving the need for employee empowerment with technology.
5. Interactive digital content needs to be in the store, just as it is in the digital selling environment. Uses will vary, depending on each retailer’s value proposition. To that end, it’s a new baseline requirement that businesses establish a “data infrastructure ” to integrate all product, customer, and vendor data across all the channels.
6. In new generation marketing, retailers need to understand consumers’ paths to purchase – which often begin outside of the store and often traverse several “channels ” for a single purchase decision. This is the #1 reason for retailers to develop a mobile app (it generates the metrics needed to help measure the path to purchase).
7. Communication to consumers has moved from a one-way “push ” to 2-way multiple communications. The results of these communications are a) more measurable, b) more accurate, and c) more cost efficient. Hot Tip: although Apple’s stumble on the iPhone 5 Maps might be funny, it’s important nonetheless that marketers be prepared for the app’s influence, since map searching is often the beginning of consumers’ path to purchase.
8. Successfully engaging with customers (especially in social media) demands real transparency – retailers must communicate when things are both good AND bad.
9. Price transparency: embrace it! You can’t hide!
10. Digital media is converging (Paid, owned, and earned media). Marketing automation tools are important, and they need to be scalable and easily adapted to new selling situations as they emerge. Retailers absolutely must tear down organizational silos within their companies – especially re. marketing decisions.
11. Retailers’ “social capital ” is measured by “return on influence ” and “return on insight “.
12. When retailers think of “community “, they need to consider both “digital ” and “physical ” community building. Measure: a) awareness, b) engagement, and c) acquisition.
13. Remember than when you empower your customers, you also empower yourself at the same time – IF you measure. KPI’s need to be specific, measurable, achievable, relevant, and timely.
14. “Big data “: a shift is occurring in information, from structured and transactional, to social and “sensing “. That shift is causing an exponential increase in data ( “big data “), but its also causing a shift in the type of analytics being used. Big Data is often “dirty “, and queries are often more exploratory in nature ( “tell me something I didn’t know before “).
15. Supply Chain re-design is likely to be the next big challenge for “brick’n’click ” retailers. It’s likely to dominate the dialogue in the next 12-24 months.
16. Retailers once and for all resolve the question of how to assign the sale for an “omni-channel ” purchase! Best Buy did it based on the geographic proximity of a sale to a store. Whatever method is used, failure to address this one issue is preventing more rapid adoption of the “omni-channel ” model by traditional retailers.

The Bottom Line

The one thing that virtually each of these bullet points has in common with the others is that retail’s new dynamic duo (the CMO and the CIO) should be leading the charge internally to make them happen. It’s a great opportunity for them both; one exec is ascendant while the other is forever worrying about “alignment “. Here’s an opportunity to align on the next generation of opportunities to better position the company for its future.