Start Over Strategy For Tomorrow's Future


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Josh Siegel, CIO of Natural Markets Food Group and Mark Collin, Head of Retail, ThoughtWorks Europe at ThoughtWorks Live Europe 2014.

Today's retail food landscape is in a constant state of change - with digital disruption creating multi-channel challenges. In addition, there is increasing consumer demand for healthier food options. Retailers must adapt by learning how to address these continual shifts and develop meaningful customer experiences across multiple touch points. Learn how Natural Markets Food Group is leveraging experience design and technology to create a truly innovative approach in the retail food and food service industry.

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  • Hello, my name is Josh Sigel. I been the CIO and Technology leader in a number of organizations. Recently I was with Natural Markets Food Group and today I was to share with you our “Start Over” journey.
  • Hello, my name is Josh Sigel. I been the CIO and Technology leader in a number of retail and distribution organizations. Recently I was with Natural Markets Food Group and today I am excited to share with you our recent “Start Over” journey.
  • To understand our journey it’s important that I quickly share with you some facts about the Organic and Natural Foods Industry. It’s hard to turn on your TV or open a newspaper (or Turn on a newspaper for those who have gone paperless!) without hearing about the benefits of Organic or the health concerns raised by nutrition experts regarding all the antibiotics, pesticides, and other bad things being introduced into our food supply.
  • The customer journey will continue to cause the channels to blur.
    The customer will demand mobile payment and loyalty cards.
    The value of conventional loyalty programs will continue to be questioned – creating a higher purpose.
    The “currency” or the value to the customer is in giving.
    Do you need demographics? Then check the research.
  • We believe that Ralph Lauren needs an IT system that will act, as a platform for innovation, one that can meet the business needs of today and evolve to meet those of tomorrow…
    How do we build such a platform? Well firstly, it is important to think about the architecture and domain in terms of capabilities, which, for online retail there are really 5 key capabilities that one can think of:

  • We believe that Ralph Lauren needs an IT system that will act, as a platform for innovation, one that can meet the business needs of today and evolve to meet those of tomorrow…
    How do we build such a platform? Well firstly, it is important to think about the architecture and domain in terms of capabilities, which, for online retail there are really 5 key capabilities that one can think of:

  • 12 screens making up a window into the world we are creating. We have a concept we have been developing and presenting soon.

    A farm scene made up of cut-paper creates the background. In front we use the concept of the Farmer’s Almanac, old-time but with modern sensibility. Tweets
  • Eye catching imagery connects the space with the upper floor. Landmark place. Combination of typography and messages that draw people in, and imagery of fresh food, coffee, treats. Atmospheric, not pushy.
  • Our virtual host puts a face to the space. She talks to the our audience and provides education for how to get the most out of the experience. She makes the use of the mobile app less mysterious. She represents the quality of the food. She is tech savvy, but not tech obsessed. She is smart and uses it to get more time for her life.
  • On the floor, we see imagery that points people to the space. It’s a welcome mat that points the way and highlights the kitchen brands.
  • The screen rotates among several messages, ranging from how to best use the app, what is looking good, highlight our Children’s area, reinforce the brand.
  • Separate area dedicated to families with small children provides a detail that separates this space from a common food court.
  • A unified design based on typography and letter pressed menus has a modern feeling with the old time charm. Anachronistic it avoids nostalgia and being ‘fake.’
  • Balanced with chalkboards, the design works together, and each medium focuses on what it does best. Digital is able to be updated from the central system, and the analog boards can high light a special or even a particular associate.
  • Start Over Strategy For Tomorrow's Future

    1. 1. START OVER STRATEGY for tomorrow’s future
    2. 2. C U S T O M E R ENGAGEMENT ?
    3. 3. TIME INTUITION Machine Learning People
    4. 4. •  Doug Stephens is one of the world’s foremost retail industry futurists. He was recently ranked #9 in Vend’s Top 50 Retail Influencers. •  Doug conducts speaking engagements globally on retail & consumerism and has 10,000+ followers on Twitter @RetailProphet •  Author of the ground breaking book, The Retail Revival: Re-imagining Business for the New Age of Consumerism. •  Presenting “The Future of the Retail Store” About Retail Revival
    5. 5. Natural / Organic Grocery Sales Traditional Grocery Sales organic growth rate MORE THAN 2X growth rate for all food “IT’S JUST A FAD.”
    6. 6. U.S. ORGANIC MARKET SALES $1B 1990 $11B 2004 $27B 2012 Global organic food & beverages market is expected to reach USD 211.44 billion by 2020, growing at a CAGR of 15.7% from 2014 to 2020
    7. 7. global $100Bby 2018 U.S. $21B by 2016 organic ONLINE GROCERY SALES $13Bby 2016 Organic Personal Care
    9. 9. •  Existing operating environments and technical infrastructure •  Define and gain internal agreement on the “to be” •  Define and gain agreement on roadmap, development and deployment plan •  Budget •  Time •  Organization •  Internal resources/capability •  Training •  Culture •  Vendors – current and future •  Competitors – current and future •  Technology in general OUR CHALLENGES ARE NOT UNIQUE
    10. 10. WHERE DO WE BEGIN?
    11. 11. Do we look at this as a POS decision? What about on-line ordering and grocery shopping? How does mobile come into play? If we choose a platform that everyone else has deployed how do we create a competitive edge? How long will it take to make changes? How expensive will those changes be? where do we begin?
    12. 12. 5MONTHS (the clock is ticking) we only have
    13. 13. Retail Food Food Service
    14. 14. Guiding Principles 1platform create a JOURNEY leverage our smaller size let history inform the future, not drive the it LETGUESTSCHOOSE quickly move from DECISION to ACTION
    15. 15. Digital Shoppers Multi-channel buyers Researchers Physical store buyers OUR CUSTOMER
    16. 16. 20   WHERE IT STARTED
    17. 17. in both grocery & restaurant properties OBSERVATIONS 1 Individuals interested in eating with their colleagues spent the bulk of their time alone. •  Decide what to eat •  Separate to place the order •  Wait for the order •  Find each other •  Look for a table 2 Families were in the restaurant together but were not necessarily interested in eating the same food or eating together
    18. 18. in both grocery & restaurant properties OBSERVATIONS 3 Payment options were “traditional”
    19. 19. 4 Customers made multiple purchases from multiple stations = multiple payments and standing in multiple queues. 5 The “Queue” during lunch = people leaving the queue in both grocery & restaurant properties OBSERVATIONS
    20. 20. 6 Moms and dads had difficulty finding a safe way to navigate AND had a hard time finding seating that was "friendly" 7 Differently abled customers struggle with “the queue” and seating in both grocery & restaurant properties OBSERVATIONS
    21. 21. •  Multitude of order options: Self Service Kiosk; Mobile; Online •  Unique Payment Options for families and groups •  Food related information •  Queue busters •  In-store format that makes it safe and easy for parents with children, differently abled, and seniors to order and enjoy their food •  The ability to grocery shop AND enjoy let’s address the breaks in the journey & CREATE
    22. 22. what we saw EVERYTHING is still channel based SINGLE- CHANNEL MULTI- CHANNEL OMNI- CHANNEL CATALOG CATALOG ?
    23. 23. MULTIPLEX brand experience
    24. 24. •  Start-ups will continue to enter the market in a variety of roles and they will rapidly drive change –  Technology –  Business models •  Larger retailers will begin to more seriously investigate opportunities to transition to a more nimble, customer experience driven operating environment •  The definition of convenience will continue to morph as new technologies are introduced •  Labeling is the tip of the iceberg •  Local origin, artisanal, small batch is the fastest growing segment – and one of the most difficult to incorporate •  Mobile payment will become THE form of payment WHAT’S NEXT?
    26. 26. A retail solution should not be a big box!
    27. 27. …it should be a combination of discrete capabilities…
    28. 28. …that leverages the right solutions… Bespoke solutions that are differentiators and offer a business advantage. Commodity solutions that add value, but don’t differentiate.
    29. 29. …to build a platform for innovation and evolution. REPLACEABILITY FLEXIBILITY SCALABILITY AVAILABILITY EXTENSIBILITY
    30. 30. 60:40
    31. 31. JOHN LEWIS
    32. 32. Q&A
    33. 33. @JoshuaSigel
    34. 34. APPENDIX
    35. 35. 379+ stores growing to 1000 with a market cap matching that of Kroger 150 stores growing to 1,200 & Sprouts IPO'd in August of 2013 and raised $344M 344 stores in 25 states with an estimated $11B in revenue. Raised $290M for IPO and operates 131 stores in 25 states with estimated $1.3M in revenue
    36. 36. The  “Nature’s  Market”  sec/on  is  featured     in  more  than  1,300  of  their  2,500  stores.   Launched  it’s  own  brand  of  natural  and  organic  food  in  2009   Promising  to  drive  down  organic  food  prices  by   25%    with  a  new  line  of  organic  food  products  
    37. 37. Free  same-­‐day  and  early  morning  delivery  on  orders  over  $35  of  more   than  500,000  Amazon  items,  including  fresh  grocery  and  local  products.  
    38. 38. •  Our own stores •  Competitors stores, online and off •  Other consumer facing businesses •  Past work experience •  Customers •  Street and analyst community •  Employees Observation (The good, the bad and the ugly)1 Research2
    39. 39. Identify & Prioritize Customer Segments3 Create a contextual end-to-end customer journey map for each segment 4
    40. 40. Create and prioritize action-oriented tasks5 Identify overlapping tasks and actions6
    41. 41. Identify value of the tasks, and ease of implementation 7
    42. 42. Define the roadmap8 Define tools that support execution of roadmap AND allow for flexibility 9
    43. 43. •  We did not have time to execute a traditional approach –  who does anymore? •  A traditional approach would have given us a “Traditional” solution and would force us to execute a vision that was not ours •  “Traditional” solutions were developed to solve channel issues not to address the complexities of today’s customer journey – do we build a future based upon the past? •  We needed to work with a partner that would ask: –  Understood the importance of “Speed to Value” –  Embraced service and experience design as a necessary step in delivering a solution –  Believed that innovation was driven by more than technology
    44. 44. •  Approaching the project with the goal of supporting the customer’s mission was key •  “How do we continue to create an awesome customer experience?” •  Adopting a test and learn approach to rolling out initiatives can make a huge impact •  Design experiences, not touchpoints •  Manage expectations and transitions across the ecosystem –  Customers –  Executive level, mid management, store associates –  Vendors – from food purveyors to IT consultants •  Do not underscore the importance of testing and training
    45. 45. Where it Ended
    46. 46. For  Concept  Purpose  Only    
    47. 47. For  Concept  Purpose  Only    
    48. 48. For  Concept  Purpose  Only    
    49. 49. For  Concept  Purpose  Only    
    50. 50. 6 1 For  Concept  Purpose  Only    
    51. 51. 6 2 For  Concept  Purpose  Only    
    52. 52. 6 3
    53. 53. 6 4
    54. 54. 6 5
    55. 55. 6 6
    56. 56. 6 7
    57. 57. Experiences Digital  Signage   •  Subway  Entrance  Video  Wall   •  Atrium  Column  Wrap   •  Virtual  Host  Hologram   •  Entrance  Floor  Projec/on   •  Express  Market  Signage   Children’s  Area   •  Children  Interac/ve  Video  Wall     Digital  Menus   •  Kitchen  Sta/on   •  Bar  Screens   Customer  Ordering  POS   Single  Kitchen  Kiosk   Express  Market  Kiosk   Fulfillment  Screens   Kitchen  Sta/on   Column  Screens   68