Published on: October 5, 2016
Content Guy's Note: The goal of "The Innovation Conversation" is to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive, the originator of Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.
This week's topic: Business lessons from how baseball has embraced technology as a game-changer.
And now, the Conversation continues...
KC: You and I are both NY Mets fans, and we're both cheered by the team's unlikely return to the playoffs after an injury-ridden season, so I wanted to employ the Innovation Conversation this week to use baseball, and sports in general, as a metaphor for retailing. I've been arguing for a while that one of the reasons that MLB decided to allow instant replay, beyond a basic desire to get the calls right, was that those of us watching at home actually had better views than the umpires. We have these big HD televisions, the networks are able to show us a variety of views in amazingly slow motion, and so we knew immediately whether the umpires were right or not. To me, that has a lot of resonance for how technology affects retailing - companies have to be better at trackability, traceability and transparency because consumers, in the end, may be able to have more information than they do if companies are not careful. Would you agree?
Tom Furphy: I absolutely agree. It’s a great metaphor. In the not-too-distant future, consumers most certainly will have at least as much information available to them before, during and after the shopping experience as do retailers. Retailers should count on it. In many cases consumers will have access to even more information at any point in time than the retailer. From digital recipes to shopping list to product information to sourcing and supply chain, to shopping tools and purchase history, shoppers will have virtually unlimited data available to help them along every step of the way.
It already has happened in other industries. Think about the experience of buying a car, which today is nothing like it used to be. Every consumer who wants to have more information about the car he or she wants to buy is able to, right down to what the profit margin is and what every other dealership (anywhere in the country!) is selling the car for.
Ultimately, this is all a good thing. This information will give shoppers more control and will allow retailers that embrace the new environment to deliver a better, richer shopping experience for customers. With the assistance of data, retailers will be able to cater to all shoppers precisely and individually, before during and after the trip. Regardless of if the trip is an e-commerce trip or a store trip. That’s a big win for both shoppers and retailers.
However, unlike MLB teams and umpires, retailers do not have the luxury of instant replay. They need to be on their game, real-time, all the time. They are not afforded the opportunity to reverse a bad shopping experience in the same way that umpires can reverse a bad call.
KC: It also has been interesting that this year, for the first time, Major League Baseball made a deal with Apple that allows managers to use iPads in the dugout, giving them access to far more information and far more quickly than in the past. Video technology makes it possible to analyze the way players swing a bat or throw a ball with far more precision than any scout ever could have - which is an enormous advantage, especially if the opposing team did not have access to the same info. Again, a great metaphor - companies cannot afford to concede these kinds of advantages to their competition.
TF: Having a deep data strategy is not optional today. And this goes for customer-facing functions as well as any function throughout the organization. Data can make everyone better at what they do. The retailers that have the most data and have developed the best capabilities to leverage that data will be much better suited to win with shoppers than those retailers that don’t. The retailers that are out in front of this will benefit from a flywheel effect – they will deliver a better experience rooted in data, those experiences will generate even more data, and that data will be used to reach more shoppers and deliver even better experiences. Retailers that are behind will find it more and more difficult to gain ground on the leaders.
KC: Sometimes people bemoan the impact of technology on sports the same way that they talk about how Amazon uses algorithms to such advantage, and how Jeff Bezos says he'd prefer to operate with as few people as possible. But I'm not sure it ever is an either-or situation. Michael Sansolo and I talked here a few weeks ago about our being the opening act for Lou Piniella at a conference, and we talked with him about technology's impact on the game. And he said something that really resonated with us. Piniella said that all the technology could be an enormous help, but at the end of the day, a manager has to be able to walk out to the mound, look a pitcher in the eye and tell whether he's got anything left in his head, heart and balls. It seems to me that even with all the technology available, that's an important quality that a leader/manager always has to have - the ability to gauge human potential and possibility. Even Jeff Bezos. Agreed?
TF: I’d say that I pretty much agree. While technology has absolutely allowed us to rely less on human variability, I think leaders and organizations ultimately need to strike the right balance of technological and human influence that works for them.
Technology takes data from the past, mines it to recognize patterns and then develops and applies algorithms to predict future events. So, in baseball, could data and algorithms detect a breakdown in a pitcher’s form? Could the pitcher’s trailing ball location and speed data be used to predict a forthcoming breakdown? Maybe. Actually, it’s probably likely.
Perhaps Mr. Piniella’s pitcher feels great and genuinely believes that he can keep going. His competitive juices, pride and desire to perform for the coach could very well overwhelm his recognition of an actual mechanical and physical breakdown that is occurring. However, statistical data might actually calculate there is a 90% chance that he can’t make it through the rest of the inning without being unacceptably vulnerable to walks, hits and home runs. Maybe then it would be a good idea to bring in a reliever.
However, like Mr. Piniella, I do believe that it’s critically important for leaders and managers to have the ability to connect at a deep human level both to assess potential and, even more so, to help inspire people to realize their potential. It’s one thing to set up quantifiable goals and “program” people to use the tools at their disposal to reach those goals. It’s another thing to inspire them to dig deep, leverage the emotion to obliterate the goals and be inspired to set new, even higher goals.
Let’s go Mets!
The Conversation will continue...
- KC's View: