Adam Simon and Chris Petersen interview Lucas Perraudin, HP
This is part of our series examining a wide range of collaborative ecosystems that are emerging in response to consumer behaviour and expectations. While omnichannel is the new normal for customers, the transformation is still in process for many brands, retailers and distributors.
Few retailers and brands can independently afford to build their own end-to-end solutions. As a result, the next phase of transformation is collaborative commerce:
ecosystems of partners who can deliver what customers want anytime and everywhere.
The culmination of this blog series will be a panel discussion at our CEO Breakfast at CES2018. We have invited three senior executives to share their perspectives from three points of view: Brand/Supplier, Distributor, and the Retailer.
The next phase of retail transformation is through strategic collaboration
Our first speaker at the upcoming CEO breakfast at CES, is Lucas Perraudin, head of retail and ecommerce at HP. Just back from 3 weeks of studies at Stanford University as part of an executive MBA, Lucas spoke with us just before this year’s Black Friday and the start of the countdown to Christmas.
What does strategic collaboration mean to you?
Strategic collaboration is central to the next phase of transformation of retail. In recent years, those retailers who have invested in omnichannel are now reaping the rewards with increased sales through e-commerce. The next phase is to create an ecosystem so that the customer’s journey is completely seamless – whether the customer is looking for reviews, finding out about brands, comparing prices or ordering products and services. We want to make it as easy as possible for the customer. To make it seamless at all levels, we must collaborate in new ways across every touch point.
What implications does this have for retailers?
The next phase is all about the importance of sharing data. Data sharing has always been a sensitive topic for retailers. Many retailers have traditionally viewed opening up sales information as giving away precious customer relationships. However, this attitude is changing as retailers realize that control of the digital customer is much harder than control of the physical customer. Today’s customers, who previously belonged to the retailer, are taking ownership of access to real time information and experience at the tip of their fingers. In this context, a few advanced players are providing real time, personalized & connected experiences, levelling up the bar of customer expectations for the entire industry. The only way for brands and retailers to deliver on expectations is to create seamless data exchanges that enable customer recognition and personalization across their journey.
So how do you see the relationship with retail evolving?
In our brand relationship with retailers we are committed to delivering the best customer experience. We believe that customer choice of their purchase point is key, and can only be achieved by maintaining a balanced channel mix. In order to achieve that we are developing new ways of sharing of data with key retail partners. As partners, we all own a number of customer touchpoints. Through strategic collaboration around a common set of data, we are going to build a strong retail ecosystem. This is important for HP to reach customers wherever they are, and stores form a vital link in this service.
In what other ways do you see the importance of collaboration?
Retail has traditionally been a national activity, closely linked to particular consumer preferences in each country. In the new world of strategic collaboration, we have to think more clearly about the impact of cross-border commerce. Ecommerce makes it easy for people to buy from e-tailers anywhere in the world. In the EU in particular, regulations coming will actually enforce this. Retailers must now realise that if a special offer made to them on a specific country basis that would now have a cross-border impact as well. The old saying in chaos theory applies to pricing across a global retail ecosystem: when a butterfly flaps its wings in New Mexico, the end result is a hurricane in China.
So, in your view, how do retailers make the most of this new strategic collaboration if that also means that their leverage to get special deals is reduced?
In three ways. First, there is an opportunity for retailers to benefit from economies of scale in logistics operations in order to lower their costs. Large ecommerce companies are getting good at leveraging warehouses in one country to deliver to another. International retailers have an opportunity to leverage their warehouse capacity in order to lower costs. Equally, collaboration with distributors is another way to achieve the same goal.
The second way is for retailers to develop their competitive offering based on the full suite of services that they provide. Those that invest in the full package of services will differentiate themselves from pure ecommerce, and there is no substitute for that, as we see every time a pure e-tailer opens a store.
The third way is by sharing data: brands and retailers can reduce customer acquisition and retention costs through better targeted and valued bids across the journey.
Chris Petersen and Adam Simon are collaborating on a series of blogs that explore the rise of strategic collaboration and new customer centric ecosystems. This blog series will culminate with a worldwide panel discussion at the ContextWorld CES CEO Breakfast, where a global Brand, Distributor and Retailer will share their perspectives on strategic collaboration.