retail news in context, analysis with attitude

by Michael Sansolo

SCOTTSDALE, Arizona — Good timing can never be taken for granted. And good timing is the reason why the For Marketing Institute (FMI) Midwinter Executive Conference took on special significance and importance by focusing heavily on Big Data and the challenges of cyber security.

Both issues are increasingly central to business discussions, but never more so than now as news stories focus on the massive data spill at Target and subsequent reports that Neiman Marcus and other retailers may have been impacted. As a result, a program heavy on data use and management, a topic that once would have been consigned to a technology meeting, had unusual relevance for the food industry’s leadership.

Charles Wheelan, author of "Naked Statistics: String the Dread from Data," took the group through a review of Big Data, highlighting what it is, the values it produces and also the pitfalls it creates. As Wheelan explained, Big Data enables companies to combine massive amounts of findings from multiple sources and studies to create an unheard of level of insight on many topics including consumer behavior.

Such data driven insights produce benefits as divergent as the improved safety of automobiles to the sophisticated valuation of baseball players as documented in the book and movie Moneyball. Armed with Big Data, the food industry can make connections that could lead to improved shopping experiences by target marketing to expected and unarticulated customer needs.

But Wheelan offered those benefits interspersed with the downsides of Big Data. He explained the obvious, but frequently overlooked necessity of blending data with common sense and experience to help produce better decisions.

Robert Mueller III, who in September stepped down as head of the Federal Bureau of Investigation (FBI), examined a different angle on data management with his review of how terrorism, technology and cyber crime have changed the nation’s top law enforcement branch. Mueller took office shortly before the terrorist attacks of September 11, 2001, and he explained how, not surprisingly, that incident altered the FBI’s role and priorities.

Mueller’s experience had an especially strong parallel to management challenges. He explained the FBI’s pivot from reacting to crime to preventing it, in order to stop future terrorist activities. Mueller’s experience, as well as his admitted difficulties in adjusting to the new world of technology-based crime, demonstrated the growing complexity of the world.

In many ways, it was a message similar to that from Kevin Davis, the president and CEO of Bristol Farms and also chairman of the Midwinter Conference. Davis opened the conference talking about the enormous scale of issues industry leaders must focus on these days. “ We have to know more than we ought to know,” he said, paraphrasing Mark Twain, adding that there is really no option.

The first day of the meeting also featured:

• A update on FMI activities across a broad spectrum from FMI Chairman Fred Morganthall, the President and COO of Harris Teeter, and Leslie Sarasin, the president and CEO of FMI. Sarasin also examined some of societies changes, especially population and technological shifts, and how those changes impact supermarkets.

• Panel discussions of industry professionals followed the presentations by Wheelan and Mueller to add real world experiences to the topics of Big Data and cyber security.

• Dina Howard of Saatchi and Saatchi examined the human connections company must make to build great customer loyalty and experience in stores or with products.

• FMI also ran a special program geared to independent operators examining the changing customer; the importance of heightened focus and opportunity in fresh products and meal solutions; and methods to improve communications between suppliers and smaller buying operations.


Michael's View: Without putting too much importance on a single meeting, it’s possible to see the data-dominated discussion as a sea change for a topic once widely avoided by CEOs. In many ways the Midwinter discussion of data was reminiscent of past discussions of food safety, which thanks to news events grew into a prime industry concern.

Clearly both the topics of data security and Big Data require some broad industry thinking. On data/cyber security, recent events have shown the vulnerability of retail and there is no possibility that the problem will disappear anytime soon. Just as with food safety, the companies not directly impacted by a problem might consider themselves lucky, but will likely still suffer from the same loss of confidence by customers.

In other words, marketing against another company’s misfortune would look mean-spirited and short sighted because no company can believe itself immune from this topic. It suggests that FMI is on the right path to elevate this topic and produce an environment for sharing of both problems and solutions.

A similar approach came up in the panel discussion on Big Data, featuring representatives of Safeway and Hershey. Here again the ability to gain the largest benefits of these enormous data gathering efforts might come from mutual efforts between trading partners.

One personal note: as someone who , while working at FMI used to spend a lot of time on this Midwinter event and a technology show, Marketechnics, it was amazing to see this topic move so clearly to center stage. But as former FBI director Mueller made clear, the nature of crime is very different today thanks to technology and the situation will likely get more, not less complex, in the future.

Problems and challenges constantly evolve, tasking top management to evolve with them or risk getting overwhelmed.

KC's View: