Editor’s note: While attending the Oracle Crosstalk 2013 user group event in Chicago in June, I had the opportunity to sit down with Mark Hurd, President of Oracle, to discuss his insights on the retail industry.
Hurd addressed the overall focus for retail companies moving forward: “The direction of retail is toward a more common front end, either in-store or on the web. You hear a lot about omnichannel, and the question is: How many different looks and feels and channels will this consumer deal with? I think the answer is not many. Those that get it right will have share shift.”
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Regarding customer service, Hurd shared a personal example from the telecommuncations industry. “My ability to change my (phone) service is very limited these days. And they want me to go into a store for help? I just don’t have the time to do that. I go to a lot of different countries that have less-developed infrastructure and I could use some help getting the best service in those countries. The company that offers me better service will get my business.”
Showrooming also is an important issue for retailers to manage, Hurd explained. “I can go to a store and look at all the TVs, then I can scan one and surf on the web to get the best price. This causes a big issue if you’re a retailer — you’re putting all these stores in place, hiring employees, acquiring merchandise, optimizing assortments, etc. — but if I can buy it on the web for $200 less that is what I will probably do. So how do I deal with that if I’m a retailer? Clearly the shopper wants to touch the stuff. How do you (retailer) avoid being disintermediated by the technology?”
Certain types of retailers have an advantage when it comes to connecting with consumers, he explained: “Obviously the brands that have more service orientation are more susceptible to an emotional pitch, like at John Lewis. This will shake out over time. Do shoppers want to have a relationship with a nameless, faceless company? The answer will be sort-of, not yes or no. The winners will be defined on the edges. The issue that comes up is that the technology gets ahead of these processes.”
Adding secular trends to the mix does not make it easier, he added. “A guy in 1999 told me there would be no more cash. My company made ATMs, so if there is no cash there are no ATMs and we would have a lot of work to do. But today there are more ATMs than there were in 1999. I also was told there would be no more cash. While the cash supply is down a bit, it’s not down by that much. Additionally, the death of a check has been talked about for years, but there are still checks. Someone told me there would be no more bank branches, but there still are.”
He added: “So I could make the argument: Why are there still stores?”
Hurd also addressed global commerce, a particularly relevant topic for Oracle, since executives from 27 different countries attended the event (a 50% increase from 2012). “I think retail is a global industry. The reason it’s attractive to us (a software company) is that you can build something once and deliver it many times.”
Finally, when asked about the key technologies, strategies and initiatives that will help retailers moving forward, Hurd stated: “I think, obviously there are fundamentals — the building blocks must be in place. You better be good at merchandising, pricing, assorting inventory, buying inventory. Then you have to get better at how you deal with your customer. You better be good at connecting. In my Telcom example, I have your device and service but you don’t connect with me. It would be nice if you talked to me and asked: Where are you, what are you doing, how do you feel about your service, how about if we give you more bandwidth, etc.?”
Hurd continued: “I think you’ll see more innovation in the web environment. When the catalog on the web is different than the one in the store, it leads to a lot of complexity. SKU management is different, etc. These silos have got to merge. In the near future, I don’t think you’ll see a point of sale solution that is different from a commerce solution. As we go forward, these will be one and the same. I will want to see common processes, common catalogs, common SKUs across all channels. It won’t be effective for retailers to maintain these silos moving forward. You’ll see us pushing really hard on deep integration between these two channels.”
Mark Hurd is President of Oracle Corporation and a member of the company’s Board of Directors. He joined Oracle in 2010, bringing more than 30 years of technology industry leadership, computer hardware expertise, and executive management experience to his role with the company. As President, Hurd oversees the corporate direction and strategy for Oracle’s global field operations, including marketing, sales, consulting, alliances and channels, and support. He focuses on strategy, leadership, innovation, and customers. Before joining Oracle, Hurd served as Chairman of the Board, Chief Executive Officer, and President of HP. Prior to that, he spent 25 years at NCR Corporation, where he held a variety of management, operations, sales, and marketing roles, ultimately serving as the company’s Chief Executive Officer and President.