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Last updated on September 20th, 2021 at 10:40 am
To achieve the best possible outcome of success, omnichannel adoption should comprise one of three main priorities for retail CEOs. When digital transformation takes precedence for senior leadership, the urgency to evolve will accelerate for all other areas of the business, ultimately creating a more consumer-friendly brand.
According to Dustin Jones, CEO of Unified Commerce Group, the case for omnichannel must be made at the most senior level to ensure buy-in from the rest of the organization. Dustin’s extensive retail career included 14 years with Macy’s before he moved to Asia to work with Alibaba, the Fung Group, and Macy’s on their international expansion. His experience with these retailers has enabled him to identify potential stopgaps in omnichannel adoption—typically from leadership—and understand how the convergence of global consumerism has made omnichannel a must-have for any retailers seeking to expand their audience.
Dustin recently sat down for an Endless Aisle podcast episode with NewStore’s Senior Director of Marketing, Marcus LaRobardiere, to discuss Macy’s digital transformation journey and why support for omnichannel must start at the highest echelons of an organization. Read on for several highlights from Marcus and Dustin’s conversation, some of which have been edited for clarity.
On Macy’s omnichannel evolution
“We built a manual process with Excel that registered and fulfilled demand from stores. We worked with those stores’ inventories, creating detail pages from products we didn’t have on the site so we could sell all those products on macys.com. It was a standout home run. Within six months, we were able to prove that our ability to sell anything was real. There were some constraints—at that time, the homepage was king, and you could only fit 20 things on a homepage.
“Since then, we’ve figured out how to show 200 things. Mobile came out, and scrolling became more commonplace. Nonetheless, we used those results. We got Macy’s to approve the cost of a warehouse connecting all of our stores nationwide to macys.com in a single view of inventory, and that was really the evolution. From there, everything else developed.
“All of the systems—buy online, pick-up in store, buy online, return in store, the predictive algorithms that help you margin analyze the fulfillment of your products—became a playground of experimentation and optimization, and this word ‘omnichannel’ continued to balloon. In the beginning, we called it omnichannel 1.0, omnichannel 2.0, omnichannel 3.0. But at some point, it’s just omnichannel forever.”
On the biggest barriers to digital transformation
“The biggest barrier starts from the CEO. A CEO can effectively do three or four things—maximum. If you look at what a CEO over the last few years was prioritizing, just building your ecommerce business was in your top three. There was a massive consolidation happening too around centralized points of fulfillment—either your digital engine was growing or you were acquiring. Macy’s was buying companies. Walmart was scaling through markets. So, your top three growth strategies really define what the organization can do. Ultimately, the CEO is going to drive those three things and probably will fail to effectively drive the others.
“One of the things we had was a CEO that was dogged. He had three priorities. He was a visionary for digital and omnichannel. When omnichannel became his priority, that’s when the accelerator button happened. The people from bottom to top said, ‘Well, every speech he gives, every town hall he gives, he says three things, and it was always in that narrative.’ For me, that gave me ultimate permission in my ability to execute.
“If you look more broadly at larger companies and what they face today on their journey to digitization, there is no doubt in every CEO’s roadmap in every large company: digitization outfalls the top three.”
On keeping pace with global consumerism
“By working with Alibaba and seeing how they built and bought companies, I saw the power of data through every angle of an organization, and how—if you harness and attribute and leverage it—there [are] so many possibilities created from it. The distribution is how people succeed in retail, and that distribution went from maximizing main street to maximizing malls and department stores to maximizing vertical stores to then ecommerce. The new world distribution is data.
“It’s how you lower costs and create efficiencies and deepen learnings and insights and create the most relevant product and personalization. Most people don’t understand how to use it, particularly in our retail sector where a lot of giants were dominating business, but they were archaic on their backend. I [also] saw this power of the converging global consumer happening right in front of my eyes.
“When I first started going to Hangzhou, the headquarters of Alibaba, finding a hamburger was nearly impossible. Now, you can find everything: a microbrewery, a hamburger, a pizza. Also, [in] anywhere but New York City, it was impossible to find dim sum. Now, pretty much anywhere you can go, you can find dim sum in many locations. There’s a converging appetite of global taste. You see brands starting up—like Allbirds—within two years becoming successful in China as well. There’s very limited space between being successful in one place and finding your tribe in another, and I felt like there was this great global brand opportunity if you could harness the right portfolio of brands.”