Retail Executives Have No Clue About Digital

I remember attending a conference a couple of years ago, where, as the conference was concluding, the people around me were saying to each other, “I don’t know what the organizers are going to do next year. I mean, omni-channel is done – we’ve figured out what we need to do, and now we just need to figure out how to do it.”

At the time, I kind of agreed. It felt a lot like the tail end of the Internet Bubble, when, desperate to keep the frothiness going, people were moving on from basic internet and holding up mobile as the next big thing. Mobile WAS the next big thing – but it didn’t arrive in 2001. It took until 2007 to get here in any meaningful way.

In the same way, I hear fellow analysts and industry pundits say things like “omni-channel is dead” or try to invent some new term to mean something even bigger and better than omni-channel – in the same way that web people were holding mobile up as the next big thing in 2001.

And at the same time, I look around at the retail shopping experience and think, “Where are the flying cars?” This is scifi speak, by the way, for “We’ve been promised a vast and shining future, and it’s not here yet. Why not? What the heck is taking so long?”

How can both of these perspectives exist at the same time? One view is that omni-channel is over, it’s all figured out, the only thing left to do is get the cogs and gears running, and everything will be great. The other view is that what retailers present as a shopping experience in 2016 still looks an awful lot like the one you could get in 2007. Which, to be really honest, especially when talking about the store, looks an awful lot like the one you could get in 1985 (you know, when Doc Brown invented the time machine).

Well, my partner Brian and I have cracked open the data from our latest benchmark report (due later this month), and what we found answers the question. The disconnect is at the executive level, and it comes from having no clue what digital really means to the retail business.

We’ll go into detail in the report about this disconnect and how it manifests, especially in the largest retailers. But that statement – retail executives have no clue what digital really means to the retail business – actually is pretty obvious, once you think about it. When 90% of retail business comes from stores, when digital has only impacted the business over the last 10 years or so, when even the CMO is more likely to have come from traditional advertising than from digital (and marketing is the department within retail most impacted by digital today), it shouldn’t be too surprising that the executive team has no clue.

Generally, companies deal with these gaps, these blind spots, by bringing in people to educate them. By spending focused effort on understanding what digital means to retail in general, and what it means specifically for their own company. And we’ve had at least 10 years of a lot of people spending a lot of brainpower trying to understand and predict what digital means for retail. So it’s not like there isn’t a lot of material to start from.

So why is this understanding so hard? I think there are a couple of reasons. One, these people were raised in stores, or traditional merchandising or marketing. These are the things that are familiar to them. When faced with uncertainty, it’s easy to fall back on what you know. Two, generationally, these are people who are not digitally savvy. That’s an easy accusation to level, and one that is probably not true in the specifics – my grandmother was teaching herself web page development nearly up to the day she passed away.

But even then, using the tools is not the same as understanding how these digital tools change how customers see the world. It’s way too easy to lose touch with customers, the problems of their lives, and how your brand fits into those lives.

The bottom line is this: no substantive change is coming to a retail enterprise unless and until the executive team understands the nature of the digital transformation that is impacting their business. This isn’t about fixing the store, or even “creating a more seamless customer experience”, a phrase I often hear thrown about.

This is about understanding how consumers are changing their own shopping experiences. This is about understanding how technology – consumer-provided, retailer-provided – will continue to change shopping experiences. And, apparently, until retail executives develop a deeper sense of empathy along those lines, traditional retail will continue to fail to meet consumer expectations.

And those flying cars? They’re still nowhere to be seen.