Digital Technology Transformation

By: April Butterfield, Senior Director of Technology, Jabil And Gary Cantrell, CIO & SVP Information Technology, Jabil

April Butterfield, Senior Director of Technology, Jabil

Thanks to technology and the evolving digital economy, consumers have better access to goods and services than ever before. In fact, consumers have come to expect on-demand access. Think about all the ways that digital technology is making your life easier. Amazon, for example, has increasingly removed “friction” from its end-to-end buying process by reducing the number of steps customers need to take in order to complete a transaction. And it doesn’t end there. Amazon is also exploring 30-minute delivery of certain items in certain areas. Its Dash service, incorporated into our appliances, automatically orders and delivers items like laundry detergent when sensors detect supply is running low. Brand Now, imagine a world where every industry from automotive to healthcare transforms its customer experience while adding value through novel business services. How will that transform the retail sector? It starts with digital thinking.

“With the IoT market still in its formative stages, this is the right time for retailers to understand how data from sensors and connected devices will impact their businesses”

Internet of Things (IoT)

The Internet of Things (IoT) has the potential to drastically change the way products and services are developed, sold and consumed. The IoT is capturing the attention of executives who aims to differentiate their offerings and value-add through connected solutions, ultimately providing companies to capture and analyze new types of data at faster rates than ever imagined. With the IoT market still in its formative stages, this is the right time for retailers to understand how data from sensors and connected devices will impact their businesses. What is the potential for new revenue and how will IoT change the competitive landscape? IoT will provide various benefits for both the consumer and retailer such as:

• Optimizing store execution
• Enhanced consumer experience in their stores
• If retailers get IoT right, consumers will be even more loyal to their favorite retail brands
• If retailers deploy the whole retail technology ecosystem, retailers will have a labor force that is more focused on the customer and less focused on inventory management and store execution
• Proactive retailers will gain share and/or see incremental boost in $ per cart
• Shoppers will make more informed decisions
• Retailers should see a reduced percent of return transactions
• Shoppers will prefer/expect customized experiences where sales associates ‘know’ the shoppers and can immediately access information to support that shoppers purchasing decision(s)

Big Data Analytics-A New Paradigm for Retailers

Data yields value if it’s crafted and presented in a way that’s understandable and actionable. Thanks to the IoT, sensors and cloud connectivity, end-to-end insights never possible before can now be collected and analyzed for many more products and processes. With this rich diversity of data, retailers can use analytics tools to make sense of this data, allowing them to make quicker, informed decisions. Integrating data across the retail enterprise to have a 360 degree view of the customer can be a challenge to execute properly. Retailers have data on their customers from various sources-sensors collect information on their customers in-store movements, they have data from loyalty cards, they can analyze data from electronic shelf labels (ESLs) and compare it to what consumers are responding to store wide, regionally internationally, and information from their websites

However, retailers run the risk of turning their customers off by pushing too much communication. They need to utilize the data they have collected to enhance the consumer experience and not make it intrusive and to not take the human aspect out of the communication loop.

Data collected by the retailer needs to be handled with sensitivity and all privacy and anti-discrimination laws need to be followed and retailers need to avoid the “Big Brother is Watching You” feeling by giving consumers the ability to Opt Out of both receiving data from the retailer and having the retailer collect data on the consumer. Some examples of data collected by retailers and how they use it are:

• Accurate records of each shopping transaction
• Personal data to shopping transactions not associated with a loyalty program (eg. Software to estimate gender, age, race based on physical characteristics)
• Retailers have the option to mine the data elements and draw conclusions regarding the percent of minorities purchasing specific beauty aids, or the probability that a shopper buying dress shoes also buys matching accessories ( belt, bag, etc.).

By using this data retailers can then accelerate the analysis and implement processes that convert shoppers to buyers or add items to the shopping cart each visit.

Transforming In-Store Experience for Retailers

Gary Cantrell, CIO & SVP Information Technology, Jabil

With the rapid change disrupting commerce in the age of online shopping, brick-and-mortar stores must adapt to build a new, interactive and more intuitive shopping experience, by utilizing the latest technologies. One of the first leaps toward tomorrow’s retail outlets starts with beacon technologies at the moment consumers walk through the doors. Beacons are the most disruptive technology–external systems are used to ‘pull’ shoppers in the geographic area into a specific store with messaging tailored to that shoppers’ recent experience/demonstrated preference. In-store Beacons are used for push marketing and/or provide more detailed product information to curious shoppers.

This beacon technology is available now and one-third of active smartphones are compatible via Bluetooth. The quick adoption by some of the world’s largest retailers will help quickly grow the market to 3.5 Mn active beacons by 2018 year end. BI Intelligence says that, “Beacons are the most important retail technology since mobile credit-card readers.”

Other ways retailers can improve the in-store experience is by eliminating centralized check-out desk/registers to enable their sales people to collect payment from customers anywhere in the store. Digital signage will also be used to inform the shopper and to recommend accessories.

CIO Lessons Learned and Changing Roles

There are three items that standout as imperatives no matter the business.

First, take time to fully understand your business processes, customer base, competitive position and strategic challenges. This is a combination of strategic and tactical activities, but focus on the strategic aspects and the challenges one to five years out.

Second, understand your technology base, currency and relative leverage by the businesses and the IT function relationship with their key constituent’s. Communication and collaboration will be critical to get an accurate picture but these perceptions will impact every conversation and must be openly addressed; be it good or bad. A customer centric empathic approach will serve you well.

The pace of change in our businesses and the supporting technology is changing exponentially. Most importantly, the business and leadership expectations of IT have changed the most. While the business still depends on IT to deliver the “foundational” services necessary to run the business, they increasingly expect IT to bring business solutions and thought leadership to the discussion. The improvement in our technology has given rise to impressive disruptive companies like Uber and Airbnb. Our business partners are looking for the IT function to be a key contributor to the formulation of disruptive opportunities as a way to gain competitive advantage.

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