Shop.org Q&A with Scott Welty, Vice President of Retail Industry Strategy, JDA Software

JDA Software recently attended the Shop.org Annual Summit in Chicago where it demonstrated how retailers can put all-channel retail into action. Supply Chain Nation caught up with Shop.org attendee Scott Welty, vice president of retail strategy at JDA Software, and asked him to share some of his insights from the event, discuss top trends and where he sees the retail industry heading in the next five years.

SCN: What did JDA showcase at this year’s Shop.org event?

Welty: This year, we showcased a lot of the capabilities our solutions bring to the market to enable what JDA terms “all-channel retailing.” There’s been a lot of discussion over the years around multi-channel, cross-channel and omni-channel. JDA’s “all-channel” solutions help retailers optimize the shopping experience for their customers. From the moment they begin their shopping discovery process, in any channel and from any device, enabling them to manage that entire process and transactions in all the channels. So really, JDA is providing solutions that create a more seamless experience between those channels, that’s really the kind of things we’re showcasing today.

SCN: What are the top trends you observed at this year’s conference?

Welty: I think the trends we are seeing now, which are not dissimilar to what we’ve seen the past couple years, center around all things consumer centric. Everything is all about the consumer — how to understand the consumer, how to engage differently, how to leverage the knowledge of the customer and then incorporate that into more upstream and downstream activities. Whether it’s planning more appropriately for your customers’ needs, or executing on that particular customer’s needs, we’ve seen a huge shift in retailers migrating away from product centricity – where most retailers have historically operated from – into more of a consumer-centric trend.

SCN: What are some of the key traits of retailers that are leading the digital era?

Welty: One of the biggest trends and traits we’ve seen is really all about change, truly being able to look at your brand, your operation, and realizing what really is needed to become more consumer-centric and not being afraid to upset the proverbial apple cart. I mean, it’s a time of turbulent change, and some organizations that have been hesitant to make that change or really think more strategically around being consumer-centric are going to struggle if they don’t realize that it does require a tremendous amount of change in almost every aspect of your organization.

SCN: Where do you see the retail industry heading in the next five years?

Welty: One comment that we’ve been sharing with folks quite a bit this year is that more will change in the next five years than has changed in the last fifty years of retail, and I think that what we’re going to see is a lot of different changes in the way that the entire retail operating model will continue to evolve, particularly as it epitomizes the roles of the connected and the empowered consumer. I think we’re going to see retail become even more personalized going forward. For retail to become more personalized, it will require a massive reduction in overall lead times, especially given real-time, personalized offers and promotions. This is not going to be easy, especially given that we probably don’t even know right now what that change is going to be or how it will manifest itself with retailers and consumers. Who would have thought ten years ago that we would be experiencing the kind of retail interaction we have today with consumers? Nobody could have predicted these all-channel retail conditions and that there would be solutions in place that could help with those areas.

SCN: What can retailers do now to prepare for change, even though they don’t necessarily know what that change may be or what they’re preparing for?

Welty: I think they really need to look at their organization now. In some cases, it’s going to be retraining of individual people or bringing in new blood to help with the transition. Many retailers today for example are creating a CMO position which did not exist a few years ago. They are putting more emphasis into the marketing and consumer experience areas. There is also the balance between the CIO and the CMO, who both want to spend on technology. So aligning the organization around how you market to, and engage, a customer, is going to be a critical success factor. Again, that’s not going to be an easy transition because most retailers today are focused largely on delivering, assorting, and managing a product as opposed to engaging a customer, as their core competency. So I do think the more time retailers can spend focusing on that engagement model through a marketing lens will be a most important decision they can make to prepare for the future.

SCN: How can JDA help retailers through this time of transition?

Welty: I think that’s a great question because there are several things that JDA can do. First of all, we provide a thorough solution that addresses the five most critical tenets of successful all-channel retailing. These five tenets include: number one, having a consistent engagement model across all your channels; two, having personalized offers that are capable to be delivered. These offers could be in the form of a localized assortment, a promotion or a price etc. It could also include the way a display is managed in a store, a curated assortment. Three is the requirement for a flexible, dynamic and real-time responsive supply chain that can ebb and flow to meet the needs of a customer. Number four stems from the fact that in this all-channel world, it’s not just a channel-by-channel transaction any longer; it is an orchestration of orders across all channels, therefore, retailers require profitable distributive order-management capabilities. This tenet will allow retailers ensure they not only satisfy consumer demand but also determine the “cost to serve” each customer in real time. Finally, companies need to have one single demand sensing and shaping forecast that optimizes demand based upon anticipated consumer response to offers, promotions, assortments and more.

So as you can see, JDA has a suite of solutions that enables all five of those capabilities; however, those five capabilities are not the only thing we bring to the table. We also bring in elements that help drive an understanding of change management and how a company should be changing to establish a road map. Where should a retailer — using those five tenets — be exercising their number-one and number-two steps? It’s different from retailer to retailer depending on the customer they sell to, the products that they have, and the maturity of the organization. When combining all of these capabilities between the five core tenets, as well as the change management and leadership, we can really help retailers to navigate and build a road map for themselves and help them understand how they can achieve success.

SCN: Any other thoughts on this conference, any other observations?

Welty: Overall I really do enjoy this conference quite a bit and I think it’s great for retail. I think it’s a great event as it is definitely on the leading edge of what is most important to retailers right now. The January National Retail Federation (NRF) Conference in New York is, of course, extremely important and brings a lot to the industry as well, but this event brings a new twist and helps us to really share that consumer-centric agenda with all the attendees.

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