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Technology Every CEO Needs to Know

Technology has gotten easier to use, cheaper to implement, and with today’s prevalence of collaborative commerce, keeping up with the latest has become absolutely essential.

Ever inducing jaw dropping reactions to new technologies, Kurt Cavano, founder, vice chairman and chief strategy officer for GT Nexus, enlightened the audience at the American Apparel and Footwear Association’s (AAFA) Executive Summit earlier this month with talk of today’s latest tech tools.

First addressing the obvious elephant in the room, Cavano said referencing Amazon, “We all in this room are distracted by these guys, but avert your eyes. They are invading, but take your eyes off of them.”

Most companies will never catch the e-commerce king, but capitalizing on what they can do in the high-tech space will be key.

And incorporating relevant technologies should come as a simpler investment, because, according to Cavano, “Technology not only got easy, it got free.”

From a kilowatt point of view, the technology of running software has gotten so affordable it is nearly free. Cavano explained that the iPhone 6 has more computing power than MIT had on campus in 1965. “Something that five years ago cost thousands of dollars, now costs pennies,” he said.

Despite the present ease in terms of cost and implementation, retailers have to take technology to all channels as mastering one platform is no longer enough.

“Every one of the successful former pure play guys are opening brick-and-mortar,” Cavano said. E-commerce companies like hip eyewear retailer Warby Parker, fashion clothier Nasty Gal and menswear seller Bonobos have all made the move to physical forms.

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“We can’t be pure play, we need to think about this a lot more strategically. Retailers are really taking to heart the idea that you don’t just have a store, you need to have a place where you can show your goods,” Cavano said. “Every store becomes a distribution center, fulfillment center.”

Warby Parker is now doing $4,000 per square foot, which puts it second between Apple and Tiffany’s, Cavano said. “We need to learn as an industry how we think of our physical footprint.

Then there’s the “Uberification” of everything.

Collaborative commerce, or the idea that consumers obtain what they need from one another or pay for access to goods or services instead of owning them, is changing the way consumers buy, and will ultimately shift the way retailers present their product offerings.

Uber, a mobile app-based transportation network made possible by crowd-sourced taxi drivers now valued at $41 billion, has influenced a flurry of like-minded businesses offering consumers easy access to formerly more exclusive services.

Saucey, an alcohol delivery app, lets users order beer and spirits from their mobile phones for home delivery, Kitchensurfing is a community that lets members order a personal chef to make dinner at home for them, and Bannerman provides orderable bodyguards.

“From an economic point of view, this is commoditizing everything,” Cavano said.

Another tech entrant, the near field communication chip, lets smartphones and other devices communicate when touching or in close proximity.

“Think of it as RFID [radio-frequency identification] without the power drain,” Cavano said, after explaining that the challenge with RFID and its requisite mobile readers is that using one of those to read the technology can kill a phone in about 15 minutes, and doing consumer facing applications with RFID won’t work.

Adidas has incorporated the near field chip behind shoelaces in some of its footwear, and a shopper can tap the shoe with their mobile device and it calls up the Adidas website and all of the item’s info. Once a consumer goes home with that shoe, they can tap it again and customize it to connect with a running app, for example. Then, when the owner goes for a run in Las Vegas wearing the shoe, they can tap the shoe and it will map their run and share it socially, showcasing the shoe.

“The whole idea that you can interact with things is going to change, and that’s what the near field chip is going to do,” Cavano said. “I don’t think it’s going to supplant RFID, but this technology is really going to change the way people interact with their stuff.

An audience member asked whether U.S. mainstream retailers are keeping up with technology enough, to which Cavano responded, “Macy’s is actually doing a pretty reasonable job of keeping up and doing some things. People like Wet Seal that are in the teen market are just gone, and that’s going to happen to a lot of people. If you don’t have a team innovating and working around technology, then you’re going to be hurting.”

He added, “Shopping is going to shift from computer to tablet to phone so quickly that in the next three years the majority of shopping is going to be on the phone. So if you’re not building an experience for your customer on the phone, you’re going to be in trouble.” This, he said holding up his smartphone, is your competition.