“I’ve never seen anything like what we had last year,” says Shelley Bransten. The corporate vice president of global consumer goods and retail at Microsoft has worked in retail for over 25 years, the last seven of which have been at the intersection of retail and technology.
“This intersection continues to be one of the most exciting places to be. The retailers and brands who laid those digital tracks early will actually come out of this stronger than pre-pandemic. I’m incredibly optimistic in spite of all the things that we’re seeing around us.”
Almost every person on the planet buys and/or sells goods. This vast customer base for retail is likely a factor in its rapid innovation during trying times.
“There was a 10-year leap in e-commerce in 10 months,” says Bransten. “The pace of adoption of things like kerbside pick-up has emboldened the industry to go faster and be more nimble and agile. It is something we’ve been talking about for a long time, but this was the shot in the arm to go.”
At the 2021 iteration of the National Retail Federation’s annual ‘Retail’s Big Show’, Microsoft private previewed its new Cloud for Retail. The industry-specific platform has been designed to help retailers address business needs by turning data into insights.
“My job is to make sure we’re listening to our customers about the problems they face and use Microsoft solutions to address them,” says Bransten. “Our customers have consistently said that they need our technology to connect across and around the shopper journey. They also need our help to adopt technology faster, for example by bringing together our technology and that of our partners to make it modular and interoperable. And that’s what Cloud for Retail really is.
“It brings together the best of everything we have, whether that’s Azure, Power Platform or Dynamics 365, as well as solutions from our incredible ecosystem of partners. It’s what our customers asked us to do and means we can provide great solutions, for kerbside pick-up, better personalisation or a retail media centre.”
The Cloud for Retail private preview received over 30,000 blog views, which Bransten believes is an indication that the market is ready for this level of technology.
“Four or five years ago, we were still convincing retailers that they should feel comfortable putting their data in the cloud,” she says. “We’re not having those conversations anymore. Now our customers are most interested in how to future-proof and how they can access our technologies more easily and in a more modular way.”
Microsoft Cloud for Retail is a key enabler of innovation for the partner community – and it is this partner-centric focus that Bransten believes sets Microsoft apart.
“Our partner ecosystem is one of the elements that truly differentiates Microsoft when I’m talking to retailers or consumer packaged goods businesses,” she says. “The customer wants the best solutions from really interesting partners and start-ups who are exploring, for example, autonomous stores. But they also want our reliable technology. Our partners bet their business on Microsoft and it’s our job to help them get out there and show up for customers.”
Covid-19 has accelerated this level of partnership, community and innovation across the industry. During 2020 physical stores have been impacted heavily, which has resulted in more businesses implementing click-and-collect and other purchasing methods. But where do we go from here? Bransten believes there are four key areas in which retail will continue to evolve in the coming years.
“Firstly, I think there is going to be much more investment and progress in personalisation. Very soon we’re going to see more tailored experiences, products and offerings based on individuals’ preferences.”
Restaurant chain Chipotle Mexican Grill is ahead of the curve in this area. The brand has been using Dynamics 365 Customer Insights to better understand customer preferences and personalise its marketing efforts. In doing so, it has grown its customer base by 30 per cent and converted more guests into its loyalty programme.
“Sustainability and traceability are also becoming increasingly important factors,” says Bransten. “Consumers are demanding it, especially members of Generation Z. They have more time to spend online researching products and they want to know their source.
“The third point is in mixed and virtual reality. This has been on the horizon for a while but previously the hardware hadn’t really caught up for use in retail stores. Now, however, we are starting to see more virtual opportunities like that in use at Salvatore Ferragamo.”
Working with partner Hevolus and using HoloLens, the luxury retailer offers its customers an innovative service for choosing and customising the Tramezza men’s footwear collection, which can be used in-store or online.
Also take REI, an outdoor recreation brand. “They launched a new virtual outfitting service using Teams to help customers assemble bikes, find the right hiking boots or purchase equipment for camping trips. Tangible product brands are now asking ‘how do we use digital solutions to drive innovation at the front line and for the home office?’
“And this brings us to the fourth trend – the ‘work from work’ thing is over. Brands all over the world like REI, IKEA, Levi’s and Walmart are embracing these technologies and realising that they can actually improve collaboration and productivity this way.”
REI closed its headquarters during the Covid-19 pandemic and embraced remote working as a permanent option. “They made the really bold decision in the middle of the pandemic to not renew the lease for their headquarters,” says Bransten.
With so much potential change on the horizon, Bransten is looking forward to seeing how the retail industry begins to flourish.
“We’re now seeing an incredible rebalancing of the industry,” she says. “Retail real estate will change – stores will likely get smaller and they will comprise a mixture of distribution and experience centres. The physical spaces will look and feel much different in the future, but I am confident that the retailers that are investing now are going to come out stronger. And that’s what we are seeing in the numbers.
“As the person who runs this vertical at Microsoft, I was a little worried last March. Especially for the survival of non-essential retailers given the way that governments around the world separated essential and non-essential retail.
“But they too are buying our technology. They are looking for personalisation, customer 360 and kerbside capabilities. Retailers are accelerating their digital investments and we’re positioned for another exciting year in retail.”
This article was originally published in the Spring 2021 issue of The Record. To get future issues delivered directly to your inbox, sign up for a free subscription.