Walmart turned
heads at SXSW earlier in March by
billing itself as a tech company for the first time. The retail giant
hasn’t been shy about investing in newer technologies such as VR,
robotics
and NLP-powered
voice technology, making the case that tech will be a major part of its business
going forward. The investments come as chief competitor Amazon continues
to redefine its own customer experience (and everyone else’s) with
technology, while Kroger continues
to center its new
store experiences on innovative technologies.
The RTP edit team
discusses the pros and cons of retailers identifying themselves as tech
companies, and which aspects of tech company culture align with what retailers
need to achieve success.
Adam Blair, Editor:
It’s a bit of a mystery to me why retailers want to brand
themselves as tech companies, at a time when Silicon Valley’s mystique is
wearing thin. Presidential candidate Elizabeth Warren is asking whether big
tech companies should be broken up; Facebook appears to be playing fast and
loose with people’s personal data; and Twitter is the megaphone for the
ugliest, most extreme viewpoints across the political spectrum. Perhaps this is
just a case of Amazon envy; the
elephant in the room famously acts more like a tech company than a retailer. I get that
merchants want to let customers, competitors and investors know that they are
forward-thinking and agile — not stuck in the past like Sears or Toys
‘R’ Us was. But if I were running a retail company, I would play up my
relationships with customers, along with the trust they (hopefully) have in my
stores and products. In fact, maybe tech companies should start talking about
how they resemble the world’s best retailers.
Glenn Taylor, Senior
Editor: What Amazon and Alibaba have
accomplished, outside of getting people to buy products, suggests that they in
fact have earned the “tech company” label. Amazon has ridden the cloud craze to
consistent profitability, while Alibaba is showing its ambition to take
a similar role across China. This works if you’re the powerhouses, and
other big names in retail that want to bring tech into their own ecosystem are
making an intelligent decision — if they hire the right people. With that said,
I really hope this doesn’t become a situation like the “lifestyle brands”
movement today, where you have everyone and anyone labeling themselves as such.
It’s one thing to try to keep yourself within the consumer’s consciousness
outside the shopper experience, but it’s another to deny what you truly are at
heart by trying to gain popularity off the buzzword of the day. Yes, retail is
changing to the point where technology is a necessity. But let’s not get
carried away here — a retailer’s job is to be there for a consumer’s shopping
needs.
Ditching the retail narrative doesn’t do these companies any favors,
especially in the cases of Walmart and Kroger, the two biggest sellers in the
U.S.
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Bryan Wassel,
Associate Editor: I doubt any retailer that calls itself a “tech company”
means it literally, and from a marketing perspective the term is all but
useless — no shopper is going to switch a purchase from Amazon to Walmart because
of that proclamation. The real target is investors: executives who claim
technology as one of their primary enterprises are also signaling that they are
taking the current AI, personalization and AR/VR arms races seriously. This
primes shareholders and investors to accept acquisitions that better fit a tech
company than a major retailer, which can be an important consideration when
making deals that don’t produce a direct ROI — they may pay off in the long term,
after the retailer launches a new friction-reducing POS solution or sees a drop
in late shipments, but investors eager for the next quarter’s dividends need a
reason why they should tolerate what are often large expenditures. The tech
company moniker can help well-positioned retailers carry their current success
to the future, by giving them an excuse to invest in tools that will help them
stay ahead of the game.
