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Retailers Embrace Tech Innovation as Pandemic Accelerates Change

As vice president of information technology at Ariat International—a footwear and apparel brand focused on equestrian sports, work industries and other outdoor activities—Ryan Bezenek focuses on investing ahead of the curve.

And right now, especially as families and critical businesses are relying on smooth, predictable supply chain and distribution operations, Bezenek said leveraging and growing efficiency through the use of technology “is more important than ever.”

Speaking at the National Retail Federation’s virtual conference last month, Bezenek said he believes a lot of the shifts in consumer behaviors and expectations from the past 10 months are here to stay. His advice for those companies that want to survive and thrive under this new paradigm: “take a hard look at how you’re leveraging technology to meet the customer where they are.”

Rachel Grogan-Cook, senior director, global supply chain at Burton Snowboards, appeared alongside Bezenek on a panel led by Infor retail industry and solution strategy director Elaine Gaydosh.

Grogan-Cook said the snowboarding equipment and apparel outfitter’s “motto on the supply-chain side is making sure that we have the right product in the right place at the right time.” Given the crucial role prior software investment has played in delivering on that ideal, she said the company is continuing to invest in these tools and seeking out further efficiencies moving forward.

“Even though at times it may be difficult, expensive and not really a glamorous proposition, I would say put the systems in place that will make you stand out in what I think is going to be a really competitive landscape when things return back to that quote-unquote normal,” Bezenek added.

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The pandemic shifts the innovation roadmap

Despite all the changes and disruption of the past year, Kate Nadolny, senior vice president of business strategy, operations and innovation at PVH Corp., believes the innovation roadmap hasn’t necessarily changed. Artificial intelligence and automation, personalization tools and omnichannel solutions, she said, still remain the silos her work centers around. Instead, the pandemic has simply shifted the priorities within those pillars, transforming what may have once been seen as three years out into an immediate need.

“In terms of our general roadmap, we are on the right track,” Nadolny said. “It really just is about making sure that we’re not getting stuck in what we said we were going to do in the next six months versus the next five years, and really changing those priorities and reacting to the business needs.”

Cheryl Friedman, vice president, Lowe’s Innovation Labs, and Melanie Nuce, senior vice president of corporate development at the information standards organization GS1 US, joined Nadolny at the NRF conference for a panel focused on driving technological change.

Friedman agreed with Nadolny, saying the roadmap itself has not changed, but rather programs like curbside pickup, previously planned for 2021 at Lowe’s, have simply been pulled forward.

“Our focus always revolves around a world where there’s less friction for customers, where we are distributing knowledge and keep getting it to customers when they need it to complete their tasks and when our stores can meet them one-on-one,” Friedman said. “I think that those priorities haven’t shifted but because the customer needs have accelerated, we’ve been able to accelerate deploying our solutions at-scale sooner than we normally would have.”

Though this lined up with what PVH, home to brands such as Tommy Hilfiger and Calvin Klein, experienced, Nadolny said there’s still no proven playbook when it comes to retail innovation. “I don’t think so because I don’t know if we ever should get there,” she added.

Nadolny continued, “I think innovation, especially in the retail space, it touches so many different functions and it touches so many different ways of working, it’d be hard to say that how you’re going to innovate making the best new woven shirt or the best new swimsuit is the same way of thinking about how you’re going to innovate to completely change some sort of technology infrastructure or manage your supply chain very differently.”

Nuce, who echoed this sentiment, described intellectual curiosity as the most important characteristic of an innovation team leader. “You have to be willing to learn,” she said. “We talk a lot about nimble learning and giving yourself headspace to research things because these topics like emerging tech [are] not easy.”

Retail evolves, while some things stay the same

Like Friedman, Marc Metrick, president and CEO at Saks Fifth Avenue, framed the pandemic as an accelerant to change. “It wasn’t like all of a sudden no one wants this or everyone wants that or no one wants to come to a store or everyone wants to go online,” Metrick said at the NRF conference. “This was just an accelerant to what was already happening, the consumer was already moving in this direction.”

However, Metrick stressed that some things have stayed the same. In-person shopping, for example, remains important, especially for luxury retailers, he said. Since Saks reopened in early May, he said sales have only been slightly negative year-on-year. At the same time, he added, the retailer’s digital business not only did not see a corresponding hit, but rather “began to fire even more.”

Celeste Burgoyne, president, Americas and global guest innovation at Lululemon, said the activewear firm recognizes there has been a shift to digital that won’t go away, but believes “physical is as important as ever,” and will continue to lean into the segment. “We’re really excited to see how we will continue to evolve that physical experience, while we continue to really understand that digital will forever have some momentum behind it,” she added during the panel with Metrick.

Personalization, a pillar of Saks’ strategy since before the pandemic, remains a key component of the retailer’s plan moving forward, Metrick said.

“Forever, luxury owned that high-touch relationship,” Metrick continued. “Luxury owned knowing when your birthday was, your anniversary, knowing you when you walked into the store, and over time, data became the greatest equalizer and almost everyone was able to personalize things more. So, we are taking it a step further and we’re actually building technology to be able to connect our in-store experience with our online experience using data to really give the customer the best possible experience when they come into our store.”

CEOs’ takes

When Marvin Ellison joined Lowe’s Cos. as president and CEO two years ago, he said he was surprised by the number of “fundamental things” the company did not have in place at the time. The store couldn’t offer customers an e-receipt. Store schedules were templated at the corporate office and sent out. The e-commerce platform was on a decades-old infrastructure. “So, think about your computer today versus your computer 10 years ago, and that’s the equivalent of what a multibillion-dollar e-commerce platform was sitting on,” he said in a fireside chat at NRF.

Consequently, Ellison said he spent his first couple years at the company building up what he described as its foundation. “Like building a home, once the foundation is in place, the structure goes up relatively quickly, but without the solid foundation, the structure is very unstable,” he continued. “So, when I think about operational excellence in retail, I think about it within that framework.”

Now with that base in place, Ellison said Lowe’s is taking a step back and, like Metrick, focusing on the customer. “Everything we try to do is not about our competition, it’s not trying to replicate or predict what’s going to happen in the macro environment, it’s really more about being customer-centric,” he said.

As Lowe’s works on its technology development, Ellison said the retailer focuses on simplicity and intuitiveness. “As my chief information officer, Seemantini Godbole, says to me often, ‘The most effective technology is technology that no one sees,’ it’s always behind the scenes, it’s always behind the curtain,’” he said.

In another fireside chat, Wayfair’s co-founder, co-chairman and CEO Niraj Shah discussed his own company’s approach to technology.

Though Wayfair is an e-commerce company, Shah said only roughly 20 percent to 25 percent of its more than 3,200 software engineers, product managers, product designers and data scientists work on the e-commerce experience. Instead, the large majority work on other things, such as the infrastructure to support the catalog, the recommendations algorithms or the supply chain.

In one specific case, Shah said the home goods giant has developed a means to algorithmically look for unconscious bias during performance reviews and uses that to help coach managers. “That’s just an example where you would say that has nothing to do with being a home goods retailer,” Shah said.