Changing Technology Equations in Retail
The retail industry is riding along a huge transformation curve – largely driven by the dynamic changes in the consumer market. With customer expectations set on 1:1 marketing and demanding uncompromised personalization experience, the retail industry is scrambling to bring home advanced technologies like data & analytics, computer vision and other AI and ML algorithms. While many of the retail concerns continue to burn their hands with panic-buys and misaligned implementation strategies, it’s important to understand what is the best strategy to adopt technology in order to ensure business continuity amidst dynamically transforming market trends and behavior.
To comprehend about the latest technology trends in the retail industry – from data management to omni-channel retail – from a technology leadership perspective, CIO Insider interviews Piyush Chowhan, the group CIO of LuLu Group International. Established in 2000, Lulu Group is a multinational conglomerate that operates a chain of hypermarkets and retail companies, headquartered in Abu Dhabi, United Arab Emirates. A technology aficionado and thought leader, Piyush possesses 25 years of experience in the technology domain.
In a candid conversation with Piyush Chowhan, Group CIO, LuLu Group International
You have witnessed the entire transformation of the retail industry in the digital era. How do you perceive the transformation? Where is the industry at when it comes to digital transformation?
There is a huge legacy of physical retail companies out there. I chose the word legacy because a large portion of the retail industry still engages in old ways of working. The change & transition of the industry hence has been slow and difficult over the years. However, in the post Covid era, there are multiple headwinds propelling this industry. The digital adoption is now moving faster than ever before, accelerating at least two-three fold. But unfortunately, there is no slow and measured transition that retailers can go through.
However, one of the major reasons for this rapidly growing digital transformation is that consumer behavior when it comes to technology adoption is changing at a pace that we have seen in the past. For example, it’s been quite a while since the advanced self-checkout technology was introduced, but it hasn’t yet replaced human intervention in billing counters even after decades. So, you can imagine the pace of transformation that was happening in retail.
But over the last seven years, things have changed dramatically, thanks to mobile technology, internet penetration and data science. Customers today wouldn’t simply accept any sort of friction, be it identifying the products needed for them at the store, checkout, or even returning/exchanging the product. Customers are looking for customized and personalized experiences rather than just products or product discounts, which I think is the biggest challenge right now for a legacy physical retailer.
When it comes to personalized customer experience, how would you describe the penetration of data & analytics and the AI & ML algorithms in the industry? Are these futuristic technologies really driving the decision making process?
Well, when you read a technology magazine, you would think that it has come a long way. But in reality, I think we are still in infancy when it comes to data driven decision making as you call it. Although, it’s fair to say that things have changed dramatically already. Today, instead of the traditional way of retailers saying that “I know exactly what you need”, and asking you to make a choice, the customers are calling the shots, powered by smartphone technology and the platforms like Google Shop, Amazon & Flipkart that have democratized product information sharing. This is something that retailers wouldn’t have imagined, say a decade back. Because 10 years ago, if you wanted to buy an appliance, there is no way you would have been informed like you are today. Customers know exactly what they want and the retailers are left with no alternative than providing them with exactly what they are looking for.
The tables have really turned. The manufacturers are challenged constantly to bring a design desired by consumers to the market with a speed that they couldn’t have imagined in the past. That’s the case even in the fashion industry. We are talking about ‘hyperspeed’ fashion, wherein when the customer places an order, the garment is getting manufactured almost near real time. This is what is the power of data and once these kinds of frictions between the entire supply chain are broken, we will see a lot more designs and offerings that are driven by the customer.
Where is Lulu positioned amidst these trends? What is the kind of transformation that is currently happening in Lulu?
We are also obviously responding to the market. We have a transformation strategy in place. Our cloud transformation journey, data transformation journey, reprioritization of the data and all these initiatives are underway and have been going on for a few years now, and we believe that it is accelerating rapidly.
We have accelerated our push towards e-commerce and creating more digital engagement platforms. For example, in order to make sure that there is less friction we launched Digital Receipts, which in fact serves multiple purposes like sustainability, frictionless engagement, and convenience. We have launched such multiple initiatives, including creating new cloud ready applications because we believe that there’s no point in moving the legacy applications to the cloud. We are trying to build new applications on the cloud so that they are native and cloud-ready. We are on a multi-dimensional transformation journey.
From being a facilitator to becoming a crucial pillar of organizational growth, the role of a CIO has changed dramatically over the last many years. How are you responding to this change and opportunity?
I think it is a golden opportunity and a great time for every technology leader. Technology leaders are going to be change agents and that’s exactly why the mindset of a technology leader needs to be transitioned from an enterprise’s technology provider to an innovation thought leader and a change agent.
There in fact are two sets of CIOs who have come in. There are CIOs who hail from the pure IT Infrastructure domain. They lack so called business strategy and in-depth understanding of the business. They are struggling to add value to their respective organization because digital transformation is not just about technology. It’s about creating and disrupting models and using digital innovation to transform the company. So until and unless you possess that much of business acumen & knowledge, you will not be in a position to drive that change and add value. It’s a common belief that going digital is all about buying the latest technology products and implementing them. But I believe it is not. It’s about using the right technology for the right job in the right way, because technology is in abundance today. It is all over the place. You have to identify what works, what is the business value, and you also have to identify whether the customer likes it or not in order to make an informed decision. Managing the IT infrastructure and technology assets is going to be less than 20 percent of CIOs' jobs in the days to come and this transition has already begun. It is a great opportunity for CIOs to stand up and transform the enterprises.
The tables have really turned. The manufacturers are challenged constantly to bring a design desired by consumers to the market with a speed that they couldn’t have imagined in the past
Going forward, what is your technology roadmap? What are the kinds of innovations that you’re working on right now?
There are multiple aspects, and obviously there’s a roadmap in place. There are a lot of customer related changes that we are trying to implement as well as the changes in the way we source products. We also endeavor to make our stores much more engaging by moving from being a transaction oriented store to a product experience centric store. So a lot of our stores will now have breakout areas, dining areas, and multiple experience areas where you can go in and experience a product.
On the other hand, we also want to merge our online and offline journey, which is not easy for such a large setup. We serve more than a million customers every week. Hence doing it at scale is something that needs meticulous and extremely calculative measures. We are on the path of creating a true omni-channel experience for our customers.
What would be your advice to your budding CIOs in the retail industry who are trying to get on this transformation ship?
I can’t say it's advice, but watch out for the trends around customers. In the future, my belief is that digital is going to change and disrupt a lot of things beyond our imagination. With customers calling the shots, technology leaders should be able to build a lot of capabilities within the organization. Make sure that you are leading it from the front, while working with other CXOs in the organization that you work with. You need to ensure that you are working hand to hand in terms of developing the strategy. Until and unless the barrier between other CXOs is broken and you are part of the strategic discussions & the strategic roadmap of the organization, the digital transformation journey will not be that effective
Piyush Chowhan, Group CIO, LuLu Group International
A digital evangelist with a passion for transforming businesses with the use of technology, Piyush possesses over two decades of experience working with global consumer and retail companies. He has an excellent track record of delivering results and creating value across organizations. Having kick-started his career as a Consultant in Tata Infotech in 1997, Piyush’ stellar professional journey as a technology leader spans across organizations including Wipro, TESCO, SanDisk, WalmartLabs India, and Arvind Lifestyle Brands.