The Outside View: Retail’s Future Leaders Can’t Operate a Rotary Phone
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Similar to 30 million other Internet users, I was captivated by the now-viral video of two 17-year-olds trying to dial a number on a rotary phone — and struggling for a long while before eventually succeeding.
Why do older generations love videos like these? Probably because it’s irresistible to see how young people process the world so differently than we do.
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In kindergarten these kids likely watched unboxing YouTube videos on their mother’s iPhone. In fourth grade they perfected the XPro Instagram filter, and in eighth grade they joined their friends in lowered allegiance to Facebook. When they entered high school, Snapchat was ubiquitous. In just a few short years, they’ll be in the workforce, along with millions of young people who’ve never paid with cash at Starbucks.
When someone asks how I think the retail industry may change in the next five, 10 years, I think of these students. As a lifelong academic, I’ve seen countless examples of how their worldview has pushed the industry forward. In fact, I was reminded recently that it was just nine years ago that three Wharton MBA students questioned why buying eyeglasses was such an expensive, time-consuming, in-store-only errand. Today, Warby Parker is valued at $1.7 billion and has spawned an entirely new era of direct-to-consumer, digitally native brands hoping to be the “Warby Parker of [insert industry niche here].”
Sure, the students who pass through these halls at The Wharton School may not know how to operate a rotary phone, or know what life was like before Amazon, but that’s OK. What the retail industry really needs from young talent is a perspective that older generations will never innately have. Here are two to consider:
1. A better understanding of how data can improve the shopping experience.
Legacy and digitally native retail leaders are all screaming to find young talent who understand data and analytics. Many invest in expensive out-of-the-box platforms and need young talent to help them put it to good use.
But I’ve found the most successful retailers aren’t simply looking to fill the “data guy” role without integrating these new employees in the business. They’re building their entire business around them.
It’s why it didn’t surprise me when The RealReal founder Julie Wainwright told me recently that she considers her company to be more of a data company than a fashion brand. “The resale market is incredibly dynamic, and it’s data that drives our ability to assess every shift and adapt in real time,” she said.
As of this writing, the company has no fewer than 20 job openings for data scientists, including a senior-level position solely dedicated to improving the site’s dynamic pricing model, using AI tools such as reinforcement learning algorithms.
Smart, data-focused retailers also know to give young talent a space to play. Several weeks ago we learned from Revolve’s chief operating officer David Pujades that he’s not particularly interested in applicants who have backgrounds in traditional retail. He described his perfect candidate as a smart, creative, driven spirit who knows how to create “art” with data.
“What excites me is when I come across a candidate who wants to paint new pictures with our datasets,” he said. “How do we find new ways to connect seemingly unrelated data points? What new theories can we test to understand more about our best customers? That’s the type of fresh thinking I crave.”
2. A better understanding of everyone’s liquid expectations.
For the past few years, I’ve posed the same question to my Marketing Strategy undergrad class: “How much cash do you have on you right now?” This year was the first year most students responded with “none.”
And why should they? Nearly every monetary interaction in their daily routine can be handled with a card or an app. When they encounter a cash-only situation, it must be jarring.
In 2012, Accenture’s in-house design agency Fjord labeled the sensation we feel when we’ve become so accustomed to a certain norm in one industry and expect it to apply across all industries: liquid expectations. For example, because Amazon has normalized fast and free shipping, we expect all e-commerce companies to offer the same. And because we can track our Uber driver’s proximity in real-time, we expect every retailer to offer us the same transparency when we place an online order.
Young people have the unique perspective of not knowing what life was like “before.” And it’s precisely why we see so many of them challenge their employers to introduce the same speed, personalization and service standards they’ve become accustomed to in so many other domains.
Like the StitchFix data team that wondered why a fashion brand can’t learn more about your style preferences in the same way Netflix learns which TV shows will be of interest to you. Or the team at Shinola that wondered why any retailer would continue to forecast sales by solely relying on a creative director’s gut instinct — and risk having billions of dollars of unsold merchandise left on the shelves. Or the digital team at Nike that wondered why a big manufacturer can’t offer customers the same personalized experience they might get from, say, Google Maps or the Zillow app.
One way to keep your ears perked and minds open to younger employees’ perspectives is to actually make a point of it. Many build it into the culture, others make it a daily routine. William P. Lauder, the executive chairman of The Estée Lauder Cos. Inc., recently told me about the success of his company’s reverse-mentorship program. Since launching it four years ago, they’ve successfully paired hundreds of Millennial and Gen Z employees with senior leadership across 20 markets as a way to bridge the generational divide.
If managing a one-to-one mentorship program isn’t in the cards, you might consider creating an advisory taskforce of junior employees with whom management meets regularly. Or, you might try injecting younger voices into your company’s monthly “all hands” meetings. For example, make an open-call to younger team members working on a project who want to share their learnings with the whole team.
Hosting “upskilling” workshops for senior employees works, too. One chief executive officer recently told me of his company’s brown bag lunch seminars, where younger employees have volunteered to make short, lunchtime presentations on everything from “blockchain basics” to “how to TikTok.”
Retail leaders must embrace the perspective of up-and-coming talent with open arms — or pay the price of ignoring the future.
Thomas S. Robertson is the academic director of the Baker Retailing Center at The Wharton School of the University of Pennsylvania and the Joshua J. Harris Professor is a professor of marketing and former dean of The Wharton School.
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