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Retailers must change and adapt to technology disruption

Caroline Baldwin

Retailers need to change with the times of technology disruption or they will not survive, according to the US retailer Pier 1 Imports.

“Retail hasn’t changed in thousands of years until 1994 with Amazon.com,” said Andy Laudato, SVP and CIO at Pier 1.

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The first disruption to traditional retailing was the onset of eCommerce 20 years ago, he said. Then social media with MySpace in 2003 and Facebook in 2004.

Laudato also said other social collaboration platforms such as Pinterest have changed the way customers engages with the home furnishings company. Pinterest allows users to create images on ‘boards’, and Pier 1 Imports is seeing customers creating dedicated boards for the store, resulting in dynamic content on the web about the business.

“But we don’t get to call her up and say ‘change this font and move this picture’,” he said. “We’re seeing our customers arranging products in ways we hadn’t even thought about.”

“There are limitless ways our intelligent, educated consumers who love decorating can use our products in different ways,” he said. “But if they’re not happy they could create a board saying ‘I hate Pier 1’ too.”

He also pointed to the proliferation of mobile devices that has disrupted the market in recent years.

“From 2000 BC to 1992 it was all good, and then all these things in our lives started changing everything we do.”

Laudato talked about the ‘digital diva’ who moves from innovation to expectation very quickly. “In IT we think ‘isn’t that great?’, but she has more knowledge than the store employees.”

Pier 1 Imports have recently begun offering email receipts to customers who shop instore. Laudato said he was telling his daughter, who was shocked they were not already offering the service. “It’s not hip to her,” he said. “It’s the new standard – the new normal.”

The American company has a total annual revenue of $1.8bn from its 1,080 stores in North America as well as its eCommerce offering. While the company was founded over fifty years ago, it has only really started selling online in the last 20 months, after reconsidering its strategy after a failed attempt in early 2000s.

Speaking at the Demandware Xchange event in Miami this week, he said Pier 1 Import’s point of sale (POS) technology is “not quite integrated, but we’re getting there.” The retailer is experimenting with tablets in a few of its stores to sell and engage with the customer.

Pier 1 Imports is a customer of Demandware, which provides digital commerce cloud-based software-as-a-service (SaaS) solutions for 204 customers worldwide, including seven of the top ten fashion brands, seven of the top ten sportswear brands, four of the top ten beauty brands and three of the top ten department stores.

From a back-end technology perspective, Pier 1 Imports still has many IT operations that are disparate. “But the more and more you come to the cloud, the more technology integrations go away,” he said.

Speaking at the Xchange keynote, Demandware president and CEO Tom Ebling said retailers are suffering from strained legacy systems, and he is seeing a trend in investing in a single digital platform that supports eCommerce online as well as instore transactions.

Ebling also said retailers are under threat from the “Amazon Effect.”

“Amazon poses a healthy dose of competition,” he said. “They are leaders in retail, dominating with Kindle in the cloud, offering web services, and also delivery logistics with Amazon Prime.”

“They used to only sell books – now it has 31 million global customers shopping just for clothing.”


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