There was a marked contrast in styles between the two charismatic corporate leaders who did back-to-back presentations Monday morning at the 96th Annual NRF Convention in Manhattan. Dr. Hans-Joachim Körber, CEO of Metro AG, with his measured, German-accented delivery, appeared assured, pragmatic and professorial. Steve Ballmer, CEO of Microsoft, the consummate salesman, strutted the stage and punctuated his message with humorous asides and evangelistic flights into that great retail tech future. Each, in his own way, promoted innovation with a capital "I" as the primary force driving retailing forward.
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Dr. Hans-Joachim Körber |
Dr. Körber's address outlined Metro's internationalization philosophy and, from that perspective, he made the point that "innovation represents more than just technology... but includes processes, structure, products and business in every respect."
About one-quarter million people are currently employed under the Metro Group umbrella, which operates 2,200+ stores in 31 countries. Dr. Körber has obviously thought long and hard about the structure that's needed to operate a truly global business. Citing the statistic that the spending power of the world's emerging economies is predicted to reach $9 trillion annually by 2050, up from $4 trillion today, he proudly illustrated that Metro was present in eight of the top 10 fastest growing of those markets. In the past decade, that segment has blossomed from the single digits to become 54 percent of Metro's overall business.
Although Dr. Körber highlighted operational imperatives, such as the global standardization of business processes, much of his talk centered on meeting the diverse needs of consumers and what it will take to do that in all the far flung regions in which they operate. To transform an organization towards that end, Dr Körber sees a corporate culture of diversity as being a prerequisite. He also covered the need for "ethical sourcing" and a universally applied set of social standards. "We can't afford to use different standards in different areas in which we do business. The misbehavior of one operator can jeopardize an entire sector."
Perhaps most importantly, Dr. Körber explained the importance of a "disciplined approach to innovation," spearheaded by "innovation managers" trained to recognize the right ideas, test them methodically and then roll out the successful ones throughout the organization.
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Steve Ballmer |
Mr. Ballmer painted his picture of retail innovation in more detailed strokes: less of a world-vision and more about the need to empower the customer, individually, via technology. "Consumers expect to be at the center of everything the businesses that serve them do," he said.
Mr. Ballmer kicked off his presentation with a slickly produced video apparently intended to throw a bit of high-tech stardust into the eyes of the audience. It showed a shopper entering a supermarket, using a hand held device to review her shopping list. The retailer's system kicked in, recognized her list and presented her with a floor plan route to her desired items. Projections materialized in mid air along the shopper's path, presenting offers and assistance. After experiencing a few more magic tricks, the happy customer with full cart exits the store without a checkout in sight.
Also recognizing the explosive growth of emerging markets, Mr. Ballmer positioned technology as the competitive differentiator that will allow companies to win in the international arena. In this environment, he sees the ability to provide employees with real-time information as a critical capability. "Companies will need to move information seamlessly to really focus on making sure the enterprise comes together."
However, despite facilitating more intelligent and fluid decision making for retail management, Mr. Ballmer was insistent on keeping the consumer at the center of attention. "Technology will change the way the consumer wants to work with retailers," he said. He challenged retailers to be ready for that shift in power.
Discussion Questions: Will huge, sophisticated retail organizations such as Metro AG be successful in catering to the needs of the diverse populations they serve? What role will innovation of business processes and technology play in their success?
Dr. Körber frankly stated during in his talk that, "traditional retail models are simply not affording the level of growth necessary." With the way international retailers such as Metro AG are institutionalizing the practice of innovation, it seems as though the world's their oyster.