NEW YORK—Digital retail is entering its third wave: one of partnerships, said Steve Case, CEO and chairman of capital investment firm Revolution, during a session on how technology startups are shaping retail at the National Retail Federation's (NRF) BIG Show 2018.
The first wave of the Internet was telling companies why they needed to be online. The second Internet wave was about apps, social media and building in a software-centric business age. Now retail is moving into the third wave, which requires a different mindset.
"It is not possible to do it on your own; you will need partnerships," Case said. He was joined by Oisin Hanrahan, co-founder and CEO of Handy, a platform for home handymen and plumbing services, and Tobin Moore, co-founder and CEO of Optoro, a startup for processing and managing customer returns. In order for these retailers to grow and continue to keep their focus on their core strengths, Case said that technology partnerships will be necessary to bring the companies to scale.
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For example, Tobin said that Optoro was started to help relieve the $380 billion headache that returns cause retailers every year. "And since the growth of e-commerce, we're seeing the amount of returns double or triple in brick-and-mortar," he added. Therefore, getting returns processed quickly and efficiently will give retailers of the future a competitive advantage.
Parceling out those pieces of the retail business could also improve the overall customer experience. That is why "companies need to be flexible" when it comes to working with startups that can help improve platforms within the retail organization, Case said.
In addition, making sure that the shopping experience is seamless from end to end is critical in today's retail. In fact, Hanrahan called experiences "the currency of today's retail." And he stressed that technology has the power to change every part of that customer experience.
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So how do retailers start to transform their businesses for this third wave? Case said that retailers need to be looking 10 years down the road at what they want their businesses to look like and then back up and create a plan from there. "Think about what are your core skills and how do you surround yourself with partnerships to win in this third wave," he said.
Hanrahan added that retailers need to create and encourage a space where experimentation is critical.