DistilNFO had an opportunity to interview Venu Gopalakrishnan, Founder and Global CEO of Litmus7 Systems Consulting. Venu and his team are working on leading the change in the Retail Industry through “Retail Singularity” initiative. We thank Venu for sharing his thoughts with our readers.
1. You are a thought leader in the Retail Industry, what is your vision of how Retail will be in the next 10 years?
I am greatly fascinated and at the same time curious to see how retail will evolve post 2025. In my view ‘retailing’ as a word in itself is probably all set to change.
My bit of philosophy : As I see, the world is going to use Technology to advance our race to singularity, which is inevitable. We have seen it happening in retail with the onset of online buying, which revolutionized the concept of retailing. Today it has reached a point where a segment of the industry got smart enough to use the same advancement of technology to monopolize the industry. This cannot last for long. Such monopolization in itself is an indication of the inevitability for change. And I believe we have already come to that stage in the world of retail.
Amazon showed us what can be done with online retailing, which helped influence the shopping behaviour of the entire world today. But currently the intent of the online shopping channel has been trivially reduced to two critical points, which are ‘price competition’ and ‘speed of delivery’ that blind sighted the possibility of decentralized and democratized retailing.
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The world has already peaked at the price war and is presently squeezing on quality too. At this stage, the next wave of change would be in helping consumers make unbiased purchase decisions and also enabling brands to know their consumer base independently. Decentralizing consumer data would be considered key in the next generation retailing models.
Retailing in the future requires reinventing and remodelling. In my view, today’s model of catalogue-based retailing will vanish and we will soon see the tables being turned. The present retailing model has already become a bottleneck between the consumer demand and supply industry. Retailing is at the cusp of changing to something futuristic, where the focus will be on enriching consumer decision making and empowering brands to reach directly to the consumer space. This doesn’t mean retailers will be going off business, but then they will be forced to change to meet the challenges of the future. A major process of decentralization is on the horizon.
2. Tell us about “Retail Singularity”. What according to you is Singularity in Retail and when do you think we may get there?
There are three constructs to everything that we do in life – space, time and effort. If we look at each one of us at a very abstract level, we are all constantly trying to save on distance (Space), speed (Time) and effort. So in reality we are racing to find ways to bend space, minimize time and of course reduce the effort too. I envisage RetailSingularity as a collective effort by many of the leading retail scientists and influencers from across the globe towards finding ways to enhance the acceleration of all these three constructs. In retail parlance, I have defined the vision for RetailSingularity initiative as an attempt “To reduce the distance between supply and demand with sensitivity to consumer and brand concerns around Space, Time and Effort”.
Singularity in retail will be achieved when, “As I wish for something, the whole universe converges to deliver it to ‘my world’”. And I believe we are not too far from attaining this. We will start the journey now and get to stage-one of retail singularity by 2028. All we need is a slightly better computing power, advanced AI, ML, AR, MR and VR capabilities and they have to become table stake.
3. What is your advice to large retail CIOs? What should they be thinking of as they make strategic decisions in the short, mid and long term?
I don’t know whether I can give advice to anyone, so it’s not as an advice, but in my opinion CIO’s can play a tremendous role in building the soul of the brand and in disrupting their digital channel before someone else does it. Today there are no incentives for a CIO to think for the soul of the brand and to innovate as appropriate.
As the digital conversion rate escalates from the present 10% to 14%, moving beyond 50% and more, the thin line separating a CIO and a CEO is probably set to merge from the growth aspect. At this point their roles and KPIs would be redefined to suit that of a business owner and the purpose of innovation will be more towards accelerating the soul of the brand.
4. If you could share a single piece of advice to someone just starting out in retail what would it be?
Never dilute the brand story. Your unique and authentic story is what sells! Design your brand for the digital world. Today’s ‘limitations’ will disappear in three to four years. Your access to direct-to-consumer will see a drastic change. In short, you have a great market shaping up which will be completely different from what it is today.
5. Your thoughts on driving innovation in the midst of all the transformation the retail industry is exposed to?
This industry needs complete disruption. Like I mentioned earlier, the world needs to pursue a different approach to further optimize any facets of the three constructs of Space, Time and Effort. We have already attained most of what we could do to these three elements with the current two-dimensional, boundary confined omnichannel offering.
Perhaps, we have few more years remaining to bet our investments on further fine tuning and investing in the same architecture. But for the next big leap to happen, we have to think phenomenally different. What happens when the medium which we are using to see technology suddenly changes? What happens when the consumers are meaningfully empowered and they don’t rely on the current ratings and reviews anymore? What happens if someone disrupts the “buying” decision-making aspect of the consumer?
We can always find substantial innovations towards loyalty, price matching, traffic acceleration etc. But in my view, retailers and brands should aspire to make every consumer their brand ambassador and define a new marketing model to get the entire consumer world to sell their products. Believe me, it is going to happen in the next 5 to 6 years. And that will change every existing norm about the way we see retailing today.
6. What are the top retail technology trends you are seeing?
In my view, Micro Services is a preparation that knowingly or unknowingly we have embarked upon to ready ourselves for entering the future world. Confusing, eh?
The future will ride on intelligence and the ability to constantly learn (AI/ML) will enable a different digital experience. Therefore, AI/AR/VR/MR/ML/Analytics will be top technology focus areas and it will disrupt retail.
Blockchain is where the new retail world is going to emerge and I see all of those experiences we talked about being built on top of this.
7. What are your thoughts on Social Commerce?
Do we have time to create friends in the physical world today, the way our forefathers did? The answer is a big NO.
The social engagements that we see today will undergo a sea change and become more realistic in nature. The current ‘social’ mediums like FB, Instagram etc., are in my view, just primitive steps to expose us to the incredible opportunities the digital world has in store for us. So it’s going to be all about Social Commerce irrespective of whether it will happen today or tomorrow.
Very soon, the pace at which people migrate to the digital space will increase radically. More conversations will happen in the virtual space than in the real world as is the case even today. Life is all about relationships and in a physical world one is bound to have only limited relations. And that, I would say is the motivating factor which is prompting people to migrate to the digital space, where you have the freedom and access to get connected to almost everyone with whom ‘you want’ to be connected.
“Social First” is the term I use, to refer to one of the key goals of retailers for the immediate future, and each one of us should focus and aim for this objective today as well as in the future. We have stepped into the age of “Social First” and “Distributed Retailing” and so it’s time to model our thoughts around it, start thinking of the world and relationships again.
8. How is AI changing the retail industry?
This baby is growing faster than I imagined and is what gives me the kick and the confidence that the technology landscape is all set for a revolutionary change and hence retail too will be transformed. There are three immediate challenges that I see, which is why AI has not gotten into the regular world as much yet.
a. Disparate systems
b. Organizations missing AI at its center of thoughts
c. Cost of adoption
AI will be largely used in understanding buying patterns, relationships etc., may be even to the point of “why buy to subscribe” situation.
9. Very recently, we heard you talking about Blockchain, any thoughts on how you see it impacting the retail industry?
This is a deep topic and one very close to my heart. I don’t think I can justify this subject matter with just a few lines of simple answers here.
I have seen a rush to force fit current requirements, even trivial ones, to match blockchain architecture for things that can be done even without it. But my take on this is a bit different. I see blockchain as an architecture for the future and now let’s find out how we can redefine our thinking to justify the real possibilities and intent of this architecture combined with how we should envision the future of retailing.
I see blockchain eliminating the trust dealers largely! We all know it and it is going to happen soon. I also see it changing the way we perceive retail industry in the imminent future.
10. So here’s a completely random question. If we get to Mars and you happen to be the person entrusted to start retail, would you do it any differently?
Oh yeah! Did Elon Musk know you will be asking me this question? I wonder if that was not a coincidence! 🙂 Before I start worrying about retailing in Mars, let me drive around in that Tesla Roadster which has gone ahead of me to Mars. After the drive I will break my head over our “Two Day shipping” from Earth to Mars.