Sharmeelee Bala, Chief Information Officer, JCPenney, in interaction with CIOTechOutlook, shares her views on how the retail industry is witnessing a paradigm shift in the way consumer expectations are changing and the various challenges the retail industry is facing in its digital transformation journey.      

The retail industry is witnessing a paradigm shift in how consumers demand the supply of their favorite goods. How do you see the changing role of the CIO of a retail enterprise?  

Customers are at the center of everything in the retail industry and it starts with ensuring that we are taking care of our customers.  Today, customer experience is a need, and making sure that we are focusing on that is what is setting all our priorities these days.

We focus more on customer experience with an aim to make their life easy. And, therefore we make sure that we meet them where they need us. How do we actually offer them the value that they are looking for and connect with them so that we are building that relationship, instead of just being transactional is something that is definitely prioritizing our work. And as a CIO for a retail brand, I would say it is very important to focus on the fact that it is not just about the products that we sell, but having that mindset change of starting with the customer, making sure that we are thinking about the customer and making them the center of everything that we do is critical.

What are the challenges faced by a retail enterprise in digital transformation? How can they be addressed?  

Digital transformation is not just about technology but more about people and processes that we have in place and ensuring that it is similar to a mindset change. From a typical way of doing things the way a retailer would do, and then moving on to this is a transformation we are talking about. It is not just about building new technology, or new applications but it is about changing in terms of the processes that are involved. How do we change the mindset of our people? So, all three - people, process, and technology - put together, is what makes it much more difficult.

Furthermore, we do not have the luxury of time to say let us stop everything, let's pause everything, and then move on to that next, the other dimension that we are talking about. This is not possible and we have to carry on with what we have. We have got to focus on and continue to work with what we have. And then at the same time, we have to transform into a world where everything is going to be different than where we are today. That is what makes it more difficult.

Also, we must identify the things that we have to prioritize to make sure that we are all sitting in the same room. When we are working as a team, we sit with our business partners, we sit with our product management teams, we sit with our data scientists and our engineers, and we start with understanding the problem that they are trying to solve.

We discuss the problem, understand it, and then together as a team we can come back with a solution that is relevant - whether it is about a product that we buy or a product that we build. Hence, such kinds of decisions that we make will all depend on the problem that we are trying to solve, and having that seat at the table; the technology team having that seat at the table to be able to come back with the solution is very critical. And I think that is what is pushing most of the organizations to be part of the solution instead of just being an order taker to get things done.  

Integrating the data collection processes has become important for retail businesses today. How can they harmonize the management and optimization of data from varied and complex infrastructures?

Retailers who have been in existence for a long time possess a lot of data. However, at the same time, we just do not want to use all the data and we cannot afford to use all the data. Therefore, we have to cleanse and curate the data, and then focus on specific data that is required for us to solve the problems. JCPenney has three categories/layers of data. The first one is the ad hoc data, where you want to provide answers to simple questions such as what are my sales? How good was the performance? What is my inventory? – the type of data that can be easily available, and can be easily solved.

The second layer is called intelligent data. Here you should be able to predict or forecast something, by using the existing data that comprises both structured and unstructured data, utilize them, and then come up with some insights, and recommendations. The last and final one is an interesting one which is data modelling.

There are a few data elements that can be automated, and then the machine tries to model the elements which result in predicting some of the scenarios that do not exist today. Therefore, ensuring that you are creating something that is not easily available, and utilizing it for specific problems that you are trying to solve helps us in ensuring that we are focusing on the problem that we are trying to solve. Therefore, everything begins at this point and hence it is important to first understand the problem that we are trying to solve, analyse the kind of data which should be utilized, and then create, curate, and cleanse it in order to derive the solution.  

There is an accelerated shift to e-commerce. However, according to a study by Deloitte, 60% of consumers still prefer to interact with products in the store. How can retail CIOs devise the right omni-channel strategy to help the company offer better customer experience?

It is true. All these studies have said that we want to have a way for our customers to go to the store, touch, feel and buy. But at the same time, there are also others who want to buy products online. It really depends on how you share the information. We have something called an omni channel. It depends on where it starts and we have to start planning it well in advance. We have to know, based on the merchandise that we have; we need to be able to place them in the right location, which is called a strategic inventory location.

We have to make sure that we are building Omni everywhere. Similar to omni channel, we have Omni inventory. Therefore, if I need something in a couple of hours, I am going to check online but will pick it up from the store. I need to be able to place that merchandise in the right location. If I need something that I want to touch and feel and then see if I want to pick it up, I would go to the store, try it on and then pick it up.

Sometimes customers are aware of the brands and they would be like “I know this brand, I have always used this, I don't mind waiting, I am just going to click on it, and get it in a couple of days.” Hence, in such scenarios, we have to make sure that we are actually utilizing the history and some of the external data as well.

The other thing is that the customers we have today are looking for sustainable products. It is also important for them to not have split shipments. How do we make that happen? We must make sure that we have the data that we can collect. That way we can place the inventory in the right place so that we can pack them all together and send them out. Thus, we can make sure that we are focusing on not just omni-channel, but also omni-inventory.