I & B 06 CFO's start shaking!

My dearest CFO’s, next time that you will attend investment committee, and they inform you that you are going to open a flagship in any city of the world, start shaking! EBITDA will suffer, the ROI will creak, and NPV will shudder, if, as is often repeated dozens of times in multiple Retail forums, stores will change from transactional locations to experiential temples.

Yes, no one can argue the importance and value of offering a great shopping experience, but as @dougstephens said, "The customer experience is ... how in the future, offline retailers will generate revenue, experiences will not only sell products, experiences will be the products. " Experiences linked to purchase, linked to" loyalty ", linked to commitment, linked to brand.

And that's where the brands and all their internal organization are going to modify mentality, CFO's included. The great change caused by innovation and digital transformation is not only the relationship with the customer, it is the organization itself, the brand commitment, the processes and above all people, from the CEO, to management, to sales people or to the on-line order distributor in the last meter.

The goal will be to get the consumer to "frictionless commerce", that is, to provide experiences, purchase decisions and sales through technology with minimal intrusion. On ALL channels. If customer not decides in one, do not have to imply that it not explore or buy in another. Your experience in one point will concern your decision in another. And our CFO must assume that a sale not reached today in a flagship store or at any point of contact can be a future sale online, or a recommendation in a network, or a possibility of promotion through beacons on the other side of the world.

How is this goal will be achieved? Investing in data acquisition capacity and analysis of consumer needs. Investing in technology capable of accelerating all the processes that influence the buyer’s journey: data, behavior, product needs, prediction of purchase decisions, payment systems and logistics, without forgetting training and value of sales people. All this is what it means to adopt customer centric strategy. And if we don’t do it, no problem, someone will do.

A short comment on the expansion of retail chains. In all categories, in different sectors, current retail networks are being reviewed. And the mantra to which companies have already launched revision is to reduce, reduce, reduce, redirect, refocus, relocate, reform, make profitable. Fewer stores, bigger, and here comes another nightmare for brands. To know the where.

At 2013 Fashion Summit of modaes, McKinsey presented a very interesting speech about the future of Retail. In summary, forecast for the year 2025 placed 600 cities, with megacities of + 10M inhabitants, accounting 60% of global GDP. It was commented then that the concept of the country market will disappear to move into the city market concept. With pure players on line optimizing day to day data of their client transactions, physical Retail must decide very well where to locate. Geolocation and cross-data will be fundamental to evolve and not be forced to disappear.

Two curious facts, in 2013, Amazon quoted $ 300 and it was for those present at the summit a book shop with something in fashion, today it is quoted at $ 1500 and is the category killer of integrated management of customer experience.

In 2017, Nike launched a strategic plan to reach the consumer faster. Mark Parker's words were "The future of sport will be decided by companies that care about the needs of an evolving consumer." Twelve cities in ten countries will account for more than 80% of the company's growth through 2020, New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Barcelona, Mexico City, Seoul and Milan.

2013 was 5 years ago, 2020 is the day after tomorrow, we are 7 years away of 2025. Bad chance for my former CFO, because he is a real crack, but it is to start shaking.