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When it comes to retail technology, the industry is 'just getting started'

By Jessica Hibbard
Published Sep 27, 2016

Connectivity is a universal phenomenon — half the world will be connected to the Internet by 2020, the majority via mobile devices — and it’s changing our expectations and behaviors.

Facebook’s Nicolas Franchet opened the Computer Science, Engineering and IT Student Program at Retail’s Digital Summit with a big-picture overview of how commerce is evolving alongside technology.

Disruption isn’t new in retail, an industry that has seen the “rule of stores” challenged by e-commerce and omnichannel models in recent years. Franchet said that one of Facebook’s favorite slogans — “We’re only 1 percent finished” — also applies to retail.

Students heard from five retailers that are bringing new technology and experiences to customers, using a variety of approaches to chip away at the 99 percent of work that still needs to be done.

Under Armour

Vijay Raghunathan, vice president of engineering at Under Armour, is helping the brand expand its innovation from the “physical armour” of technical fabrics to the “informational armour” of performance data and connected fitness.

Raghunathan said the company is moving toward its long-term vision of technology embedded in smart clothing by acquiring and assembling the world’s largest digital health and connected fitness community. A suite of apps log activity, nutrition, fitness and sleep data, helping athletes track the things that influence their performance. Right now, Under Armour is best in class for tracking, and is now working to applying machine learning to that data to provide insights and suggestions that inspire positive behavioral changes for app users.


Kraig Narr, director of POS engineering at Target, has been with the company for 18 years, tackling everything from software engineering to culture change. The company’s enormous scale — 57,000 registers at nearly 1,800 U.S. stores, supporting 32 million weekly transactions — makes technology initiatives especially complicated.

For Narr, “modernizing” the company’s point-of-sale systems doesn’t just mean technology upgrades — it requires a complete shift in corporate culture. After Narr’s team showed the value of agile development and open collaboration in a flattened hierarchy, a new CIO helped champion a broader organizational shift. Now the company’s mantra is “build it all in-house” and attracts top talent by offering a startup environment inside an $80 billion company. 


How do you bring new ideas to one of the oldest retailers in the country? Macy’s Lab Principal Ryan Taketa and Macys.com Director of Lean Evangelism Farhan Jafri explained how the company’s Idea Labs have fostered an entrepreneurial mindset, sourcing suggestions from employees and bringing the best ideas to life, often within a month.

Each month, a new prompt or challenge is posted in an employee portal, where employees respond by posting their proposals and voting on their favorite solutions. Three finalists are selected to pitch their ideas to a review panel of senior executives, not unlike Shark Tank. The winner gets two weeks with a team of six to eight developers, engineers, creatives and product managers to build a prototype, and another week to prove the prototype’s viability.

The result? The labs are home to more than 20 internal startups working to bring new experiences to Macys.com. In one example, an employee idea for a visual search feature (submitting a photo to view similar products) went from concept to full implementation in just three months.

By the Numbers

  • 1.7 billion: Facebook’s monthly users, 91 percent of whom access the platform via mobile
  • 125,000: The number of new users joining Under Armour’s family of health and fitness apps each day
  • Just over one minute: Target’s average transaction time, the fastest checkout in retail
  • 38: The number of new ideas that have come out of Macy’s Labs over the past three years
  • $7.27 billion: Annual sales at Dick’s Sporting Goods, supported by five web stores and three mobile stores
  • 7 million: The number of lucky pets who found homes through adoption programs supported by PetSmart.

Dick’s Sporting Goods

Rafeh Masood speaks at Digital Summit 2016
Rafeh Masood, Vice President of Consumer Innovation and Technology at Dick's Sporting Goods

Dick’s Sporting Goods Vice President of Consumer Innovation and Technology Rafeh Masood (pictured at top) said digital is all about customer experiences, and his company uses technology to add value and build meaningful relationships.

Dick’s is trying to achieve “digital independence” by bringing development and technology in-house, Masood said. On an ambitious journey since 2012, the company has added hundreds of people to its team in the past year to work through its backlog of updates to five web stores and three mobile stores. By including sprint teams around the globe, the company can “follow the sun” and work around the clock to meet its January 2017 deadline for launching a new web experience. 


Phillipe Colliat, director of application technology and development at PetSmart, wasn’t sure if there was “real” software development work in retail. But when he joined the company in December, he realized there was much to be done.

Most people who have pets consider them members of the family, and PetSmart’s mission is to support “pet parents.” That’s why the company absorbs the expense of developing and operating free apps like askPETMD, a place to ask questions about issues with pets and find local veterinary services. The fast response time — averaging one hour and 20 minutes — provides a useful service to customers and keeps the brand top-of-mind for all things pet-related. Like Target and Dick’s, PetSmart is rapidly increasing the size of its team so it can bring development in-house for technology that’s unique to the brand.

If we’re just getting started, what’s the next step? Franchet said we’re entering a phase of mobile-first retail, which will likely be followed by “immersive commerce” powered by augmented and virtual reality. Retailers and their partners — including Facebook — are balancing investments in short-term innovation (modernizing POS systems), mid-term innovation (developing personalized chatbots) and long-term innovation (virtual reality) to make sure they’re ready for what’s next. And the 250 undergraduate and graduate students at Retail’s Digital Summit will be the ones who lead the way.

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