Consumer is not about discounts

Technology will drive the future of retail and customer understanding will be the key. What makes you different will make the difference. In conversation with Gunjan Piplani, Robert McKee, Fashion Industry Strategy Director, Infor, shares what and how will transform the industry.

Gunjan Piplani (GP): Where do you see retail technology changing the face of the Industry domestically and globally?

Robert McKee (RMK): Since I deal with the globe, the big changes that I see on horizon related to retail and functionally fits here as well, is to ensure continuous touch with the customer, much more open and avail listening, asking rather than telling and hoping to get more input from consumer. This means that more products can be brought to consumer that will suit his needs, rather than just guessing. The objective in fashion industry is to seduce the consumer.

Everybody in industry needs to focus on consumer. For a very long time in the industry we talk about “time to market” and it says am going to make this product and am going to give it in retail.

We spend more money on discount as an industry than we spend on the cost of the product itself while consumer pays and is willing to pay for the product. We go to different parts because the labour is cheaper, that seems little bit insane. When considered that’s not the biggest cost, it’s not even close to  the biggest cost and look at the cost of a product being charge in retail, the per cent age of the labour compared is meaningless but we discount-discount-discount, when we have globally economics down to it. That’s a point consumer realise their possession has been changed.

GP:  Does an integration of brick and mortar stores with e-commerce, and e-retail, what kinds of transformation will that bring to retail on a larger basis?

RMK : From my perspective retail is retail, industry need to recognise those organisations that are in retail business, should take the opportunity to interact with consumer at every point and every way the consumer wants to interact. If that is mobile phone, computer, interactive television, or its some hybrid that combine that stuff, whether you place the COD or your store pick.

 All those things are direction of the industries is pointed. You see a tremendous expansion of the different elements and components. Amazon is now building a new model store where the yang became yings. We need to constantly be looking for what the consumer expectation is. One of the company, that was very successful on the internet among lot of is shoe company called Zapel.

And the interesting part of his business matter was no commitments to in store and he wouldn’t go out and secure the shoes. And essentially what he did he had a inventory of bags and boxes, like if the shoes is coming from Nike. Nike just has a zapel box so he gets the order sends it over to Nike. In next step, Nike packs the order into zapel box and ships.

GP:  If we talk about the technology per say apat from the changlenge of understanding consumer behaviour or buying pattern? What are the others challenges right now?

RMK : Retail doesn’t understand consumer. Truly or you wouldn’t have things that are on sale to 70 to 80 percent off. If retail really understood the consumer behaviour as well as they think they do, we wouldn’t be selling anything off price. What other things is critically important customer loyalty, trying to find out ways to stimulate brand loyalty because brand loyalty is really gone away, more retail organisation moving into the direction of private brands rather than no brands and international brands. The other side of the thing, certainly luxury brand enjoys great brand loyalty and even in case of luxury the store has the connection to the consumer. Too many retailers organisation are trying to analyse consumer behaviour rather than simply communicating with consumer. Retail actually get to know the need rather than guessing process.

GP:  If we probably talk about the industries which all industries do you see right now need a lot of technology integrating or probably to connect the dots?

RMK : The technology is just a willingness to see how much advantages is going to come from, as an industries we tends to get very stuck in the way we were always done things.  In embracing technology that will bring about fundamental change is always difficult for this industry. As an industry we are much more willing to invest in something that has tangible component, well it’s fundamentally changing your business but its only organisation can’t adjust, can’t even handle that.

GP:  About Infor which all latest technology you brought in the fashion industries and what would be the step next for you?

RMK: Continuing to move forward with the same enhancements to our existing software as well as the components that will be very much based in creation of product, collaboration of suppliers and customers and touching the consumer with social interaction and interacting socially with suppliers and vendors as well.

GP:  What all changes do you see is need to be coming in the Indian retail market right now probably in terms of technology and otherwise as well?

RMK : One of the biggest challenge I see in India is one of those blessing and curse kind of situation everybody has. People, who have a Master and PHD, and some formal computer science, also think they can build their new retail system and their new supply chain system. One of the things we encounter certainly in India that’s quite a challenge because everybody is thinking to achieve it. Huge underestimation of what it takes to really become a domain expert to understand what it needs to be done, and will bringing 35 years of 100 thousand customers into what we have created.

GP:  How important is it to have customised technology for India?

RMK : The industry is more important. There is nothing that happens differently in India. The footwear industry, the apparel industry, from the supply chain all over through retail pretty much operates the same. There is a little bit of difference from one place to next, but the industry operates in a very similar way.