Steve Ballmer is Microsoft’s top salesperson. This morning, in New York City, he sold Microsoft Retail Solutions to the retail industry, big time.
Ballmer, Microsoft Corp. CEO, addressed the National Retail Federation (NRF) Annual Convention, delivering the keynote of “Retail’s Big Show 2007” to an audience offering “the highest concentration of CEOs in retail.”
I was there, too.
Ballmer broke the retail ice by reminiscing about his in-store experience while a P & G product manager. Ballmer also noted Microsoft’s present day retail footprint, underscoring that Microsoft knows a lot about “what it means to be a retailer.”
Retail is a relatively new focus for Microsoft. Five years ago, the Microsoft retail team was five strong; Today, about 500 Microsoft professionals worldwide work across all major retail sectors.
The NRF bills itself as the world’s largest retail trade organization. This year’s convention is its 96th. Ballmer acknowledged the role of technology in retail today and mused about what retail technological innovation may have represented almost one hundred years ago.
Ballmer fast-forwarded to retail’s future with a short video capturing Microsoft’s “retail innovation outlook.”
Ballmer came to New York City to tout a customer centric approach throughout the retail value chain. Microsoft’s pre-keynote video envisaged a big-box retail consumer future where consumers are “empowered” through on-demand access to product information, availability and promotions.
Equipped with data-rich smart phones, consumers will enter department stores with shopping lists pre-mapped for easy in-store product retrieval. Retail management, armed with mobile handsets, will be on-call to place real-time stock replenishment orders and authorize on-the-fly purchase incentives. Checkout lines will be extinct as consumers simply scan their completed shopping lists at exit for automatic payment debiting.
Ballmer echoed what has become a Web 2.0 cliché: the consumer (user) is in control, citing Time Magazine’s 2006 “Person of the Year” is “you.” Ballmer recalled Time’s 1982 selection was the PC, naming it “Machine of the Year”; “The Computer Moves In.”
Using my PC (Web-enabled, 25 years later), I looked-back in history to the Time Magazine declaration of the “Machine of the Year” in 1982:
"The sales figures are awesome and will become more so. In 1980 some two dozen firms sold 724,000 personal computers for $1.8 billion. The following year 20 more companies joined the stampede, including giant IBM, and sales doubled to 1.4 million units at just under $3 billion. When the final figures are in for 1982, according to Dataquest, a California research firm, more than 100 companies will probably have sold 2.8 million units for $4.9 billion."
Microsoft boasts a $307 billion market cap today (twice the size of Google). How is the technology leader responding to consumers being in control?
Ballmer put forth that Microsoft can strengthen customer relationships, improve retail enterprise operations and enhance real-time decision making.
Strengthen Customer Relationships
Loyalty Initiatives: Customer analytics, targeted promotions.
Access to Information: Multi-channel employee devices.
Assisted Selling: In-store kiosks, call center, online.
Simplified Payment: Device-based payment, self-checkout.
Improve Retail Enterprise Operations
Integrate Systems: Legacy systems, standards, RFID.
Ensure Compliance: Retention and doc/rights management.
Reduce Support Costs: Deploy, manage and monitor.
Improve Security: Secure by design, PCI compliance.
Real-Time Decision Making
Integrate with Partners: XML and Web servers.
Role-based info: BI, portal and search.
Analyze Information: Visualization, reporting, scorecards.
Improve Collaboration: Unified communication and workflow.
How will Microsoft realize its retail innovation vision? Twenty in-store technologies are envisioned, including:
Media Shopping Carts,
In-Store Back Office,
Video-Directed Wearable Computer,
Electronic Menu Boards…
Ballmer’s keynote sought to inspire retail leaders with visions of forward-looking “disruptive” innovation. No exciting prototypes or live-action demos of “cool” technology or applications were offered, however.
Ballmer concluded his presentation with two official announcements:
1) The release of Microsoft Dynamics – Point of Sale 2.0 and Microsoft Dynamics Retail Management System 2.0. and a complete PC-based point-of-sale and integrated payments solution that it will deliver with First Data Corporation and HP.
2) Microsoft and Teradata, a division of NCR Corp., are collaborating to enhance interoperability between the Teradata Enterprise Data Warehouse and Microsoft SQL Server Analysis Services, targeting availability of the technologies for the end of the first quarter of 2007. In addition, interoperability collaboration efforts with Teradata will include SQL Server 2005 Reporting Services; SQL Server 2005 Integration Services; and the 2007 Microsoft Office system including Microsoft Office Excel 2007, Windows SharePoint Services and Microsoft Office PerformancePoint Server 2007. The worldwide relationship includes plans for joint sales and marketing activities across multiple industries, beginning with the retail sector.
Although Ballmer did not spark any retail technology “shock and awe” in his keynote, I sought out his Microsoft Retail team in search of a bit more Microsoft retail excitement.
Tom Litchford, Industry Director Retail & Hospitality, spoke to me about how Microsoft Research aims to “Annotate the Planet via A.U.R.A.!”
A.U.R.A. represents Advanced User Resource Annotation. It is a prototype in progress under development by the MSR Community Technologies Group:
The A.U.R.A. system is designed to provide the ability to access and author annotations on objects and places using machine readable tags. In our system, a user can associate text, threaded conversations, audio, images, video or other data with specific tags. Users can also review the tags and descriptions of the objects they have encountered and annotated in a custom web portal. Users may selectively make the items they have scanned public to other AURA users resulting in a collectively authored database rating, reviewing and commenting on a wide range of objects, products and places. Physical annotations can be shared with other users and selected by users’ reputation statistics and other properties.
A.U.R.A.’s retail applications target consumer shopping and annotation services in order to “leverage the participatory media wave to shape customer decisions.”
In other words, product information, availability and merchandising offers delivered via smart phones.