Mobile, Cloud and Big Data

Herman Nell, SVP & CIO, Rent-A-Center

Retail customers are alive and well and becoming more empowered with each passing day. Despite often having less discretionary income, retail customers are more informed than ever before due to greater retail transparency from on-line sources and the heightened use of web-enabled devices. As such, we are transitioning from a period where merchants “decided” what the customer wanted, to an era where marketing departments analyze a ton of data (big data?) to determine the exact nature of a prospective customer’s need and the optimal response to the customer. This dynamic gives rise to an ever faster changing retail landscape. As such, we are an industry urgently in search of innovation and innovative approaches to challenges that are often new or have a new spin to them. For an industry with margins under pressure and limited profitabilityenhancing levers to pull, technology seems to be one of the leading solutions to so many of today’s challenges.

“Providing an environment where all co-workers are encouraged to innovate, often leads to smaller scale and somewhat less spectacular innovations, but builds a process of continuous innovation”

Yet, technology has not historically been retail’s strong suit. The leverage factor or magnification of technology costs being applied in so many stores poses a daunting challenge to any retail CIO. And it should come as no surprise that the retail industry has historically spent less on technology, as a percent of revenue, than most other industries. In some respects, you might say the retail industry is trying to play catch-up on the technology front.

To complicate matters even further, the industry’s cycle of continuous technological innovation is accelerating (think release of new models of tablets and smart phones) and consequently adds to more changes in customer needs and behavior. It also generates solutions that often seem very perishable as they are replaced by newer technologies. Herman

In fact, the time it takes to execute or implement a solution is often longer than the time it takes to bring a new solution to market. The challenge for the retail CIO is to manage the competing demands to find solutions for the business’ current problems while developing solutions to its historical challenges. The vendor/partner community is often engaged to identify possible solutions. However, lacking intimate knowledge of the business and its capabilities, these firms sometimes offer a solution looking for a problem to solve.

Too often the magazine in the seat pocket on that last flight, sells a business decision maker on the latest “innovation.” The result: The CIO of a relatively small company is often expected to deliver the best “innovation” recently implemented by the likes of Apple, Amazon, Nordstrom’s and others, with little regard for budget requirements or the business context. To be sure, what other retailers are doing or have recently done is still an important external source of innovation and often the only way to bring disruptive technologies to bear on an organization and provide real competitive advantages of scale. The value of internal innovation is often overlooked, though. Providing an environment where all co-workers are encouraged to innovate, often leads to smaller scale and somewhat less spectacular innovations, but builds a process of continuous innovation leading to larger cost reductions and even better revenue-generating solutions over time.

We are also often enticed or pressured to adopt specific technologies such as mobile, cloud and or big data, perhaps because that is what is expected. This leads to the previously mentioned dilemma: a solution looking for a problem to solve. Real value can only be gained if we can apply these technologies to solve real problems.

Rent-A-Center approached many of the above challenges with an innovative mobile solution. In collaboration with our consulting partners, we developed a software solution that automates or virtualizes much of the sales activity, a store associate would normally undertake. The solution resides on a tablet focused on reducing transaction time, simplifying the customer engagement process and improving business-process accuracy. It allows us to use the solution in places where the cost of a sales associate might be prohibitive. Here is a high-level summary of how we used mobile to solve some of the above challenges:

The need: How to provide a more cost efficient self-help solution with minimal oversight for rent-to-own kiosks located in small or low-volume third-party retail locations where it is cost prohibitive to provide a full- or part-time associate.

The solution: A tablet in a ruggedized sled that can be tethered to a location similar in concept to a kiosk. It provides a solution that guides customers through the transaction without needing to rely on a dedicated store associate.

In the interest of time, we did not rely solely upon our limited internal resources to bring this technology to bear. On the other hand, consultants were not relied upon exclusively. After all, an IT organization shouldn’t abdicate its responsibility or sense of ownership and has to ensure the right support and maintenance for a solution well after the consultants have left.

Speed to market was very important to us. Accordingly, it was not delivered in a perfect state, but was delivered in a very short period of time, less than six months. We also used various forms of cloud provisioning, outsourcing and staff augmentation to facilitate speed to market. By the time you read this we’ll have deployed this solution to more than 600 retail locations.

Although this project spurred other unintended and mostly beneficial results, this innovative solution was developed with the intent of solving a specific business need; and therein, I believe, lies most of its success.