Retail has been hit hard by the COVID-19 pandemic. Shelley Bransten, Karen Garrette, and Sahir Anand join David and Paul to discuss how retailers are responding to the current crisis along with what to expect during and after recovery.
Retail has been hit hard by the COVID-19 pandemic. Shelley Bransten, Karen Garrette, and Sahir Anand join David and Paul to discuss how retailers are responding to the current crisis along with what to expect during and after recovery.
We introduce the Microsoft for Retail team and how it works with partners and customers to solve the biggest retail problems and move the state of the industry forward with digital technologies. In addition we hear how Microsoft is helping the largest employment segment in the world navigate the COVID-19 crisis.
Finally, we hear where Microsoft is investing in the technologies serving the future of the industry.
Corporate Vice President, WW Retail & Consumer Goods Industries, Microsoft
Shelley grew up in retail. She is a passionate advocate for customers and works tirelessly to ensure retailers are set up for success across their digital transformation efforts. At Microsoft, Shelley leads the thought leadership, go-to-market and solution approach to address retailers’ most important growth opportunities.
Shelley on LinkedIn
World Wide Retail Strategy Lead at Microsoft
Having worked in a variety of roles from presales to consultancy, Karen has the depth and breadth of experience and deep technical understanding that allows her to translate the feature and function set into customer solutions to win against the competition.
Karen on LinkedIn
Principal, Industry Lead – Microsoft Azure Cloud+AI for Retail & CPG at Microsoft
Over the years, Sahir has published several industry reports, blogs, whitepapers, and videos focused on retail and CPG industry business and technology areas. He is an avid speaker at industry events.
Sahir on LinkedIn
Welcome to the Azure for Industry Podcast, we're your host David Starr and Paul Maher. In this podcast, you hear from Thought leaders across various industries, discussing technology trends and innovation, sharing how Azure is helping transform business. You'll also hear directly from Microsoft Thought leaders on how our products and services are meeting industries continually evolving needs.
Hello. Welcome to this episode of the Azure for Industry Podcast. Today, Paula and I are joined by several Microsoft Thought leaders in the retail space. We'll be getting their perspectives on the industry and discussing the many ways Microsoft is supporting retailers. First, let's introduce our guests. Shellie Branson is corporate vice president of worldwide retail and consumer goods industries at Microsoft. Shellie, welcome to the show.
Thanks David, glad to be here.
Also, we have Karen Garrett, who is the worldwide retail strategy lead with Microsoft. Welcome to the show Karen.
David, thank you. It's a great pleasure to be here.
And also, Sahir Anand, who is the principal industry lead in Microsoft Azure cloud and AI organization for retail. Welcome to Sahir.
Thanks David and Paul.
I thought maybe we could start off. Shellie, if you could just tell us a little bit more about your team, your organization and its mission at Microsoft.
Well, our mission is really to make sure that we are representing and bringing the best of what our customers need, from the outside into Microsoft. What that really means is; we have two major organizations, one is; the people that are sitting with our customers, our marquee customers, every single day, listening to their pain points, their opportunity statements and where they want to go, and then bringing that into the Microsoft team, the business solution areas, where we then build either our own technologies or rely on our partners to build technologies, to solve the most pressing opportunities and challenges our customers are facing.
Okay. Karen, you're part of this organization too. What's your role within the team?
Well, I think my major role is to keep Shellie out of trouble. And then when I'm not doing that, I work with the team on our strategy and its execution and really looking at how we serve equally important our field and our customers and partners worldwide.
Wonderful. That's a great start to a conversation on your specialty, and retail it is certainly. With that, Shelly, what's Microsoft's vision of the future of retail, and how can technology enable the transformation that's inevitably coming there?
I think the first thing I would say is that the lines between what is retail and what is technology have really blurred, and really at the end of the day, it's all about delivering amazing customer experiences. Before this pandemic, the three that I would have really talked about are; number one, click stream to brick stream. We have so much click stream data from online shopping, but we all know that 85% of retail still happens in a physical store. And so the question for all of us and the opportunity statement is; how do we bring the raw intelligence that we have in digital technologies to the physical world to help our retailers? That's number one. Number two would be AI drives ROI. AI has been talked about a lot within the retail industry and it's probably in the top three of questions retail executives ask me, but I always say AI for AI's sake, that's just fun. When you can actually make the cash register ring, acquire new customers, move customers to new product categories.
That's where the ROI is and the stickiness is. Opportunities around experience and personalization, that would be a second, amazing category of how Microsoft technology can really help our retail customers. And then the third one, which we are certainly experiencing within this pandemic is; from the last clicked to the last mile. Now, the last mile has gotten shorter and shorter, but the consumer no longer has the patience or the tolerance or the willingness to wait. They want from the moment they press checkout or confirm that order, they want that product at their doorstep. And so Microsoft is helping our retailers get there faster. Probably the fourth thing I would say would be sustainability. It has been 2020 in pre-COVID has been a breakout year for sustainability. Retailers have woken up to the demands from their customers to have transparency in their supply chain, much more visibility into the factory, the operations, the conditions where the workforce is. And so sustainability is incredibly important to all of our customers because it's important to their customers. So those would be the three plus one in my pre-COVID thinking.
That's awesome, Shelly. It's great to see the compare and contrast and the conversation of sort of pre-COVID when we think about big picture, kind of how are we thinking about the future of retail and innovation? Lets switch now of course in our current time. Let's reflect on the impact of COVID-19. How has that now changed your vision? And really looking from your perspective on the near term, but also longer term.
I think the first thing I'd say, as we've watched the first six to eight weeks of this pandemic is a tremendous amount of empathy for what our customers are going through as they watch. Microsoft, we consider ourselves the digital first responders to the first responders, there's no question the role that our customers, employees, have played in the response to making sure that people were fed, people had the supplies that they need to navigate COVID. But after you work through that, I'd say the two conversations we are increasingly having in the post-COVID world are; number one, last mile delivery/contact with shopping. We rocketed in terms of consumers demand for flexible delivery, flexible pickup, curbside pickup, new ways in which I can access the products I need with minimal human touch. That's been really an explicit category for us.
The second is around worker safety [inaudible 00:07:21] gives me a lot of hard that the first thing that many retail executives say to me is, "My number one priority is; how do I protect..." Just like at Microsoft? "How do I protect my workforce who's on the front lines." Retail is the largest global employer in the world, and making sure that those workers are safe, whether it's in the front lines at a grocery store, or the massive shift that we've seen and sort of the knowledge workers on how they need to communicate and collaborate as they no longer go into their headquarters offices and are just incredibly distributed. Those are the two, the contactless, last mile delivery and worker safety.
Awesome. Thanks Shellie. Karen, same question questions to yourself. Any thoughts from your side on the changing vision?
Shellie just touched on acceleration. I've worked in retail longer than I care to think about, in many parts of the world. And for the longest time we've traditionally segmented retailers by the products and or services that they offer. And in what seems like the speed of light, we have a new segmentation of our industry into essential and non-essential. And we look then at the retailers in each of their segments, and how different their needs are. The essential retailer sitting there on the frontline, struggling with keeping consumers and associates safe, and also obviously frankly stocking their shelves. And then non-essential retail who are having this time of acceleration of their commerce solutions whilst thinking about when they are able to reopen, what will that look like? And then when I think about this shift, us as Microsoft and how we then look at solutions for our essential and nonessential customers and we think about how we can support them, that has also changed. And as I said at the uphill, the watch word here is acceleration.
Thanks Karen. That's super interesting listening in about the new segmentation as we think about essential and non essential retail. Shellie listing in, you've been at home? I mean, retail being one of the largest employers and thinking about really the safety of all the employees is crucial. David, I'll pass back to you.
Well, we've already touched lightly on how retailers are navigating the pandemic, but is there something more that we can say about maybe not just how they're navigating the pandemic today, but where we're going to go with it in the future and what they should be paying attention to. Shellie, do you have any thoughts there?
Yeah, absolutely. I've always been one, certainly in times of uncertainty where a framework or a map of how to think about where I want to go has been tremendously helpful. We early on really gravitated to McKinsey's framework in navigating COVID, which really has three steps. The first is navigating the now, the second is planning the comeback, and the third, which for me is the most exciting; is shaping the new normal. With the sort of that framework of how to navigate COVID-19, navigating the now I think we're all in it. It's about standing up the crisis response nerve center, ensuring the safety and health of the employees that I just spoke about. We've heard it said, in five to six weeks, companies have digitally transformed roadmaps that they would have said would have taken two years.
Just massive collaboration in terms of navigating the now and getting our customers up on teams quickly. In the comeback, it's really about helping our customers prepare to rebound their business in a time of; it's not like it's all going to be smooth sailing. It's going to be continued uncertainty and upheaval, but they have to come back out and figure out how they're going to continue to learn and sense and respond to the ever changing consumer. And then as I said, I think as we rebalance, we will shape the new normal. This is where frankly, in the retail industry, we've been talking about trends like Omnichannel or digital or multichannel, whatever you want to call it, for a long time, but the new normal has said it's here, it's contactless, it's curbside, it's new products and services, it's industry models that are customer first, retail responsive. That new normal, which we're working with our retailers on now, will accelerate the path towards even the next normal.
I'm wondering if you can provide maybe just one or two very tangible examples of what might really be sticky inside that new normal, because the experience of retail as you pointed out is very different right now. And there may be some parts of that that people appreciate. I'm wondering if you can put your finger to the wind and predict if there are some that might be sticky?
Well, in terms of the new normal and shaping it, I think the idea of contactless and frictionless shopping is here to stay. Just the sheer numbers of generations that have now learned how to buy groceries online, drive by a store and have somebody drop things in their car. I think that's here to stay and we've seen a massive influx from our customer base to help them get up and running. Even sometimes progress over perfection in terms of contactless. Many of our retailers will say to me, "This isn't the experience that we would have designed if we had six months to do it, but the fact that someone can get in the car, order their coffee, have it personalized to them, we can recommend a muffin with it and it's happened within three to four weeks, is a huge accomplishment."
So I think that's here to stay. Just looking at our own Microsoft stores and what we've done, the store associates obviously while our physical stores were closed, we quickly pivoted 2000 store associates to remote work, and they immediately became productive. They have now as ever as so many of our customers who are working from home and getting up and running on teams, 57,000 of our store associates we're training some of our largest enterprise customers and school districts all over the United States. That flexible mentality of; I do this job in pre-COVID, but I'm doing this job in post-COVID and the flexibility to pivot my business quickly with my workforce. I think that is also like contactless shopping, a trend we're going to continue to see in the next normal.
And I think I would really echo Shellie's point about kind of contactless. Our field teams as you can imagine are talking to our retail customers every single day and almost overnight. We have an industry hub here at Microsoft that our teams can use to retrieve assets that they can talk to customers about and as I say overnight, the most frequently searched for terms became curbside and contactless.
To echo what Shellie and Karen said, if you look at COVID-19 and the future of retail work, if you look at March data reported on April 15th, minus 6.15% negative comp sales, some would say it's marked by more uncertainty and where automation and AI have been thought as threatening millions of years job, you would think that now that can be pushed aside in the name of efficiency. And if you think about the trend around curbside pickup, just take you back to the 2008 recession where buy online pickup in the store was the go to retail technology term, the go to retail technology that retailers wanted to invest in, and they were looking to invest it in... And then also when the recession happened, it kind of threw the retailers off, we're seeing somewhat of a similar trend and [bopis 00:15:58] became really big bolster session coming into the years of recovery.
And we are seeing a very similar trend right now, where if you think about the trend around contactless like Shellie said, and where the importance of curbside pickup has come to, it's been yet another trend that has actually opened up, because retailers were trying to focus on it, they were trying to invest in it, but it wasn't really growing out of its own mold, so to say, and this push, this unfortunate circumstance around COVID-19 has really brought it out into the open in terms of the opportunity. Definitely related to labor productivity, definitely related to customers being in that contactless type of an environment, but the trend had to break out and this is the right time for it to break out and it'll grow from here.
Thanks Sahir. Switching gears a little bit. I'll kind of direct this to you, Shellie. There's clearly a lot of work going on across the Microsoft business and it's been great to see how Microsoft has mobilized quickly to really sort of provide help in the crisis. Could you share a little bit with the listeners, some of the work that's going on and how Microsoft are helping all customers in this time of crisis?
Yeah, absolutely. The work that we started in terms of the focus for our customers around knowing your customers, empower your employees, deliver an intelligent supply chain and re-imagine retail, they stand. They stand because even in the post-COVID world, personalizing and understanding where the consumer is, in their shopping journey and responding to them, it's going to become more important. So we have major investments going on within specifically our dynamics team around knowing your customer, the 360 degree view of the customer, as well as E-commerce. Then in terms of empowering employees, as we talked about the first slide worker and retail being the largest employer in the world, digitizing and giving those associates the tools and technologies that they need to service their customers better, we're going to continue to make investments in that frontline worker and make sure that they can continue to be in service to that customer, the retail is getting better and better.
The intelligent supply chain and the investments that we're making in terms of open logistics and platform capabilities, AI capabilities. It is one of the biggest requests I get from customers. They often feel that they are left to sort of patch things together from the sensing of demand all the way back to their supply chain. And they come to us and they say, "Hey, Microsoft, the lines between demand and response have completely collapsed and we need your help in understanding that demand signal and getting it all the way through sort of the nervous system of retail back to where the product is built." So we're continuing to invest in that area.
And then the fourth area is this idea around frictionless retail and the store becoming more automated, more responsive, and really not a black box where you don't know what happened, but actually a huge place to gather more data and serve customers better. So those four areas will continue to be investment focuses for us, whether it is our own dynamics teams or Azure capabilities, or the incredible partner ecosystem that you Paul and Sahir help lead us and bring us really best of breed startups that are doing it in ways that are incredibly innovative, that accrued to broader value for our end retail customer.
And I think we should talk about... And when you think about customers and solutions and things that we're bringing as projects are a matchmaking tool that we have available on get hub, that essentially brings together furloughed workers with retailers who need new employees. So if there's anybody out there who is either in a situation where they have furloughed workers or they need employees, check out projects app on GitHub.
That's awesome Karen. We'll make sure we cover it off in the notes for the session as well.
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Karen, what about Microsoft partners? Do you have any example partner stories you might be able to share with us, particularly around the COVID-19 solutions they might be providing?
Gosh, do we have four hours? Our partners are just critical to our business, and I think not more so than they are now. I'm so heartened by the agility with which they have really stepped up and produce solutions to the real problems our customers are facing today. Now, obviously, like I said before, we don't have four hours. I could talk about each and every one of them and the things that they are doing, but if I don't mention a particular partner today or you're interested in something I do mention, check out the Azure Marketplace for details of everything we mentioned here and more, I think our partners have responded in a very similar way to the way that Shellie described the McKinsey framework before. Dealing with solutions that can help with the here and now, but also in preparation for the next new normal. A really great example that I like that is a here and now example is a Scan and Go solution from SES Margotak.
And we know how critical Scan and Go is going to be not only today for essential retail, but will become even more so as non-essential retail opens up, when people are searching for contactless minimum touch types of solutions. When I move on very specifically to what the new normal will or might be, who knows? [embroidery 00:23:12] , also Sweden stands out because they really highlight the pace with which things are changing. We know we have a need for these agile solutions and they're possibly bringing us a glimpse to what the future might look like. The embroidery grid allows retailers to better manage, they install lines and queues. And we know that that's going to become super important as the social distancing measures across the world come into force as people start to open up again. So I would say that there are some highlights, but like I said, check out the market place.
Fantastic. Thanks for that Karen. Sahir, anything else you would add on the [inaudible 00:23:54] side? Anything to add?
Yeah, certainly. I feel there are two critical areas. One is certainly the unsettling of the labor market, right? So if you think about where retailers have had to focus in the last few weeks, it's really the way that the whole industry will go through a transformation on how people can work. Flexibility, mobility, efficiency, and technologies can really build and strengthen that connect between the retail worker and shaping the industry to be a whole lot smarter and a safer workforce, right? I think that's going to be a critical pillar for retailers moving forward. Doesn't matter if you're in a warehouse, it doesn't matter if you're in a trucking logistics types of environment or in a retail store, that is going to be critical. So in that sense, one of the areas which is really interesting is; available technology and how that reduces the risk of that one-on-one connect that you want to avoid right now, but also the safety associated being hands-free so that the worker is able to act in the event of any danger that is posed, right?
Because we never know how the situation is going to pan out from here, six months from now. So you have to prepare today for the frontline workers in warehouses, the retail sales associates, and that future is tied to variables and retail, and that future for wearables and retail I think is bright. That is one point I wanted to make and in fact you have several partners, but one partner that comes to mind that I particularly look keenly at is a company called ProGlove. And then there are some other partners that do wearable devices for in store stocking, where you do not require connect between a worker and another worker to do their cycle counts and you can do a filling of shells in an automated way using Bluetooth and wireless technology which is a fixed onto available device that associate can carry around.
That's one concrete example I wanted to state. There are many other examples in terms of how customer experience evolve, and in fact there's a company called Pointr. They're going to be recently launching in store contact and tracking technology to understand how customers are shopping in the store, where are they congregating in the store? And in fact, tracking it back to the mobile apps where their health and safety is being measured. And then who in that tracking methodologies than visiting the store. So connecting the app to the in store environment, making everybody safe, making it a trackable experience, not necessarily prying experience, but trackable, so that you can measure and track safety in the store, I think is another good example of a partner and an area which is going to be very important for retailers moving forward.
Fantastic. Thanks so much Sahir. So Shellie, maybe we'll kind of throw a few more questions your way. And so let's dig in a little bit deeper on some of the hot topics that we talked about earlier on. And so what are your thoughts around sustainability? For example, when we think about product innovation, sourcing, supply chain, can you share your thoughts?
Absolutely. I think it's really important to go back to that Paul because in a way in the COVID world we don't want to throw the baby out with the bath water. I think there's been such a rush to obviously do things like I talked about, like contact lists and workforce safety, but as we start to move towards this new normal, topics like sustainability will continue to be important to our customers because it's important to their customers. You just think about the largest purchasing generation that's coming in. Number one, what they're saying is the differentiator of why they're going to buy product A or product B, is based on their overall environmental impact. Personally, I love Malcolm Gladwell. I've read every single one of his books, especially Tipping Point. And what he talks about is the sheer size and influence of Gen Z and Millennials. 90% of them think that companies have to take action on environmental issues.
It's something that makes us feel good obviously. None of us want to see the explosive growth in terms of greenhouse gas emissions, but the way in which we become more flexible. The fashion industry alone, two thirds of the products we produce ends up in a landfill. The opportunity around being more sustainable isn't just good for the environment, it's good for the bottom line. It's going to lead to much better product development, more precise inventory planning, and then ultimately better performance for financial. I think sustainability is here to stay. Even though obviously right now the apparel industry is under a lot of duress, we're seeing customers like H&M, really take a leadership position on sustainability. They have things like their trendler initiative, which really an average consumer can look in and get visibility across H&M's entire global supply chain.
And actually it's a much more responsive supply chain because the customer can even help them with product development. That doesn't just mean a greener impact, it means that... We talk about personalization, that actually means that the end product that they're going to deliver is going to be much more suited for their end customers need. That's one example. We're also seeing this push towards sustainability with great customers like Intermarche, one of France's largest grocers. They have something called from farm to fork, where giving transparency into their supply chain from where that product was grown in the field, all the way to when it appears in their supermarket, so that the customer can see where the product is sourced, produced, and then how it was transported. We're really seeing that that's going to make a huge difference in terms of the number of customers that stay with this marquee brand Intermarche over the time to come.
So sustainability is definitely here to stay. I mentioned data and AI. It's an enabler for sustainability. It's also something that is here to stay and not going away. In fact, it's becoming more important. Many, many retailers as they push to move their data to the cloud, are seeing the benefits of just the flexibility and the access to their own data. Then the really interesting stuff gets to a point when you have the intelligence and the personalization. One of the stories that I've been really inspired by is our work with Loblaw. Up in Canada they are the largest retailer in Canada. They have really bet their future of personalization on Microsoft cloud. I love what their executive said to me that we've broken down their data silos, but we've also helped to break down their organizational silos, because now it's not merchandising's data or marketing data or HR's data.
It's about creating personalized offers to the customer at the moment of need. And it's really all of their data, so they're truly delivering through their Loblaw loyalty app, personalization at scale for the right price to that customer as they're making that decision and standing in the aisle of one of their stores. That's a great Canadian example. Walgreens Boots Alliance, as many of us know them, one of the largest drug and pharmacy stores around the world. Also, bringing their data together to add more personalization to their merchandising. 78% of the US population lives within five miles of a Walgreens, and that's a distinct advantage. We talk about last mile, having that physical proximity to either deliver or pick up, with 78% of the population that's incredible, and eight million customers every day count on going to their Walgreens.
I know I do. To make sure that what they went into the store for is going to be there. Let's be honest, there's been a lot of disappointed customers when the exact thing that they want isn't there, but really through the use of the Microsoft cloud and really thinking more holistically on data and AI, Walgreens is using Azure synapse to manage 200 million items per store combinations so that they really optimize, not just at a regional level or a state level, but at a store level, based on the propensity of the consumers around that store to forecast exactly what that customer given what they know is looking for when they come into that Walgreens store. They don't want to disappoint anyone of those shoppers eight million shoppers that comes in everyday, and they're doing that in the background through data and AI. So those are two examples.
That's awesome. Thank you so much Shellie. And just sort of some of the takeaways; it's great listening in sort of the pragmatic examples you shared. I love hearing about your point about the sheer size and influence of Gen Z and Millennial cohorts. Looking at stats today, we have more Millennials than any other generation today. And so your other points about Gen Z now where we're sort of entering the workforce. This is truly sort of transformative and disruptive in terms of sort of the expectations, whether it be kind of the customer experience, but also the workforce itself. Super, super insightful.
I'll go back to you Karen, and ask if you have anything that you'd like to leave the listeners with? Some closing remarks or maybe even resources they could go to, to learn more.
Sure. Well, firstly of course, thanks everybody for listening. Shellie and I really hope that you found this useful. You can check out details of all of the solutions we've talked about and the customer stories on microsoft.com/retail, and the team will post these links in the post show notes for you. Check out the work that McKinsey has done. That framework for navigating COVID and managing the new normal, we've found invaluable during this time. I also love the Kroger Blueprints, and it's a document that they published recently. It shows how they've mobilized for COVID, not just in retail, but in their manufacturing. I think it really highlights for me how organizations are coming together in this time of crisis, so people who once competitors are really looking at open ways of communicating with each other. That's a really interesting perspective there. And then I think finally, obviously don't forget to follow Shellie and I on LinkedIn, we would really love to hear from you. Thank you.
Yeah, thank you so much.
And we'll absolutely have your social media links in the show notes. Thank you all so very much for joining us today. Shellie, Karen and Sahir, and we appreciate your time and message.
Thanks for having us.
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