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In Between the Numbers: Big Pipes and Lean Stores

 Thinking about the ICT future of the store with my colleague Bharat Popat.  Doodling at the mental whiteboard.

 Current state in the lower left.  It’s client-server architecture. Three to six servers per store, depending upon segment and store size. Fat-client POS and desktops. Fans and hard drives. Ongoing break-fix maintenance contracts.  A network pipe just big enough to each night send out batched transactions, inventory, and other performance data, and download the price-item files, promotions, and performance reports.

 Now, a line from the lower left current state all the way to the upper right future.  From the “as is” to the “will be.”  Figuring three to five years.  An assumption that a retailer will want to lead the segment and compete worldwide. 

 Hmmm.

 Grab the pen and draw the line, and as you do so, calculate the evolution of technology and of consumer expectations.  Calculate the impact of global e-commerce, of multi-channel and omni-channel, of smart phones and tablets, of social networks and social shopping.

 Calculate the impact of content clouds and IP video, of augmented reality and “mashops” of virtual into the physical. Calculate the impact of right time data analysis. Calculate dynamic video messaging.

 Calculate how to cut time-to-capability down to weeks, not years.  Calculate how to do more and spend less.

 Now multiply it all by the demographic weight of the tech-savvy Millennial generation.  

 Do the math.  Yes, I’m prejudiced – I’m a proud Cisco guy.  But it’s the math (not the badge) that leads me to this future state: a retail store that’s a living, breathing website.

 A retail store that’s built on a lean, network-based architecture and a significant increase in network capacity to and from the store.  

 Lean store and big pipe.  

 More about these calculations in weeks ahead.

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Contributing to retail industry – Cisco participation in industry standards bodies

One of the areas Cisco contributes  to the retail industry is in the participation in industry organizations and standards bodies to help broaden adoption and encourage interopability of technologies.

Cisco retail architects Christian Janoff and Bart McGlothin both contribute to industry organizations.  Christian Janoff has just been re-elected to the Payment Card Industry board of advisors.  Bart McGlothin current sits on the  technical committee of National Retail Federation  ARTS Group (Association of Retail Technology Standards ) as vice chair of the mobile integration workteam.

I sat down with Bart and talked about the role of Cisco at ARTS and retail industry standards contribution.

ARTS (Association of Retail Technology Standards ) is the technical arm for industry standards for National Retail Federation.  ARTS develop white papers, best practices and standards used in in-house retail solutions as well as vendor products.

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In Between the Numbers: Penney’s Big News

 Thinking about the hiring of Apple’s Ron Johnson as the next CEO of J.C. Penney Co.

 I think it’s a brilliant move. for these reasons:

 Because – most of all – it signals that  J.C. Penney has determined that its future will be more dependent  upon its ability to create value through the  delivery of a differentiating, sustainable, and omni-channel brand experience than by the differentiation of its products.

 It signals an acknowledgement that apparel and domestic product is largely commoditized.

 It signals an acceptance of Wall Street’s insistence that the same-old merchant prince approach to the business is not going to move the dial.  

 Bravo, Penney’s.

 Johnson inherits a business that has declined some 11% in revenues since 2006, that doesn’t have iPhones and iPads to dazzle shoppers and drive traffic, and which has a brand aura more akin to Sears than to Apple. 

  He has huge challenges in front of him.   Like – it should be said – most of US retailing.

 But I like the odds.

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The changing luxury retailing market in China

 Recently I sit down with Bertrand Pellegrin, president of b. on brand and author of the book “Branding the Man: Why Men Are the Next Frontier in Fashion Retail”  for a conversation on global retailing trends.  We had both just finished reading KPMG’s   Luxury Experiences in China report and the Economist article on Retailing in China  titled “Walmart v Wumart”. 

 We recorded the following short Q&A about the subject.  Hope you enjoy our converation.

httpv://www.youtube.com/watch?v=s8RsAJ-iroc

Key points made during our conversation include:

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The Global E-Commerce Gold Rush Is On!

E-commerce is going global as retailers from around the world take advantage of faster growth trends to discover riches overseas. For many brick-and-mortar and pure-play retailers, however, expanding e-commerce into a foreign country is unknown territory.

The common questions I get from retailers who want to start new country website operations include: Where should I expand, and in what order? How do I adjust my practices to meet different cultural norms?  Which functions should be located at headquarters versus locally? How should the entire operation be governed?

To address these concerns and more, Cisco IBSG conducted in-depth interviews with leading e-commerce executives at many of the top global retailers and suppliers to understand the best practices they use to ensure online success globally. The resulting information described in a recently published paper titled, “The Global E-Commerce Gold Rush: How Retailers Can Find Riches Overseas” is pure gold for retailers wanting to grow global revenues with e-commerce.

Best practices include:

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