Workday Podcast: Retail and Hospitality’s Path to Success

Jeremiah Barba: Retail and hospitality leaders have weathered some serious storms the last few years, but they haven't stopped finding new ways to engage with their customers and employees, make better decisions, and be prepared for future disruption. Today's episode is part of our Industrious Series where we talk about the challenges and opportunities for leaders in key industries and share insights from Workday-sponsored research from IDC. I'm your host, Jeremiah Barba, and I have a very special guest with me here today. Keith Pickens, Managing Director of Retail and Hospitality at Workday. Thanks for being here, Keith.

Keith Pickens: Well, thank you. It's a pleasure to be here with you.

Barba: Absolutely. So, to get us started, why don't you tell us a little bit about yourself, uh, your background, and your work in retail and hospitality?

Pickens: Yes, I've been in retail for 42 years. It's hard to believe that time has gone by. 31 of those years as a CIO, so I've been with some of the largest, more progressive retailers in the world, both from a North America and an international perspective. But I've been here for one year with Workday, and it's really been a pleasure. I love our values. What really drew me to our company is our six core values. And we, we live those every day. We measure them every week. And that really is special when we take care of people, our customers, and our clients.

Barba: We're so glad to have you here at Workday and glad to have you here today. So our conversation will be centered around some recent retail and hospitality research that Workday sponsored with IDC, stay tuned for more information on how to download that. Let's start off with what I thought was a really interesting stat. Between 30 and 35 percent of hospitality leaders that were surveyed said that, while they thought their industries were healthy, they also said that they didn't think they were well-prepared enough to pivot when conditions change. Um, could you talk a little bit about why you think that that is?

Pickens: Yeah. And the conversations I'm having with our clients, right, both our prospects and our clients is all around business agility. It's really interesting, right? You know, retail has been changing. I've seen at least eight major transformations over the past 42 years, but we've seen the business paradigms change now where the consumers are driving more of the behavior than it is more of the influence of the retail or hospitality company. So what we're starting to see is a lot more mergers and acquisitions in the different markets, right? We're seeing retail, hospitality, healthcare, and even financial services coming under one umbrella. We're seeing developments on multi-channels and really looking at how this works together. What you're going to hear a lot of this year is around compliance, because now you have to have multidimensional views of that. Here's what's really interesting. The customer now is now choosing more personalized service. They want to have their unique identity thought about when they're, they're doing business with you. So that's pretty interesting. And at the end of the day, what the frontline worker's looking for is the ability for flexible work schedules, right? They want that work/life balance to really connect with the brand.

Barba: For sure, that expectation of personalization, the omnichannel, wanting to get things where we want them, when we want them, get them shipped to the store that we want, it's been really revealing over the last few years to see that develop. So another interesting stat here, 40% of retailers surveyed said that their top priority for improvement was data-driven decision making. And 44% said that limited visibility into front and back office operation makes that decision making difficult. So what are you hearing from retailers about how they're working to solve this?

Pickens: Yeah, this is the age-old discussion around art versus the science. It's really interesting, right? We've been trying for years and we've been building enterprise data warehouses and data queues. But really what it comes down to is your data, data that's at rest or in motion, external and internal data, third party research data that allows you to now validate the quality of that data and then apply it to your business roles. What I'm talking about now is having that right cloud architecture that allows you to take the data, qualify the data, then apply your business roles, which is unique to your business and have actual outcomes afterwards. But we also believe that data is important, that you also have someone that's at the end of that stream looking at the data to make sure you're making the corrective actions to your business culture and your business strategy. That's an important factor. So that's how the balance of art and science come together with the Workday solution.

Barba: The connections that retailers are looking to make are so important. I find that as I talk to folks in different industries, that's important across all areas, but especially in a space where consumers have such high demands and we don't always know what's happening behind the scenes.

Before we get too much farther into the episode, it’s time to move you up to the front of the line and share the details on that IDC research that I mentioned earlier. So here are the two URLs that you need to know: to download the retail research, it’s workday.com/idcretail, and for the hospitality version, it’s workday.com/idchospitality. Again, workday.com/idcretail and workday.com/idchospitality. Now, let’s get back to the rest of the conversation with Keith.

So we know that frontline workers are incredibly important in retail and hospitality. We're all shoppers. We walk into the store. That first impression really is key. An interesting stat from the survey, around 30 to 35 percent of leaders said that they're focused on improving the frontline worker experience and on retaining talent. So what are some ways that retailers can get ahead when it comes to this talent market?

Pickens: Yeah, you said it correctly. Retail is the frontline worker, right? They have to execute the product strategy, the service strategy, the marketing strategy, the supply chain, and the operation. So it's crucial that we enable those frontline workers. So what we have been focused on and our clients have been asking us to do is really focus on how do we build that life/work balance, meaning how do we bring flexibility to their schedule? How can they look at a non-standard schedule, right? Why is it 40 continuous hours of work? Why can't it be over a seven-day period where they can get their 40 hours in, but actually have a balance between activities they have to do with their home and activities they can do at work, right? So it's all those type of things we're working on. But it's also able to have that availability of change. Every week, something changes within people's lives, right? So let's make those adjustments that it can happen. So what we always like to say is when the frontline worker connects with the brand, they connect with the customer, and that work/life balance is achieved. Work is now fun.

Barba: And to follow up on this, something that I found really interesting, as I've heard from our customers at conferences and other places, is mobile, all that you can get now with mobile. Could we talk a little bit about what that means, in particular with Workday and the mobile app and how that's helping that engagement grow for frontline workers?

Pickens: Think about enabling that frontline worker at the point of customer service, right, so in having access to their standard operational procedures, to learning, to skills, the ability to have at their fingertips information to make that customer experience better. Because we know in retail and hospitality, by every guided experience with a customer, you have an uplift in opportunity. So we want to extend all that work out to the furthest point of time in the journey, meaning out to the frontline worker. We want to enable the managers to be more on the floor. We want to enable the support systems to be making adjustments in the business instead of just doing the actual work of the business. So it's pretty interesting when you think about it. Mobility allows you to do that, right, the ability to have something at your fingertips. And I know there's been a lot of time and a lot of discussion around this. Do you want to have someone with a mobile device on the selling floor? What we see is the customer reacting positively to that because they know that's the point of emphasis they can help them with. They can guide them toward a product or services. They can guide them toward a purchase. And they can give them product information at their fingertips. That's hard to do when you're in front of the customer.

Barba: I can definitely see the benefits of that store employee having that quick reference and being able to check on stock, that type of thing. So, really interesting how retailers are making that a reality for their workers.

Let's shift gears and talk finance for a little bit. For retailers, 46% surveyed said that improving finance was a top priority for them. And over on the hospitality side, 35% said that they had some frustration with their financial information gathering and reporting. So what are you hearing from customers and others about how they're making their finance operations better?

Pickens: Yeah, what's interesting is for so many years now, we look at finance as being the place where all the numbers are calculated and reports are generated. But it's much more than that. Here at Workday, we really believe it's the beginning and ending of the entire business process. And what I mean by that is, you think about it, everything starts with a business plan and a budget. So then they look at the financial plan and analysis to do the planning of the budgets, of the expense and revenue they want to generate, right, the plans. It turns into workforce, which is the largest expense around the workforce you work with. So then they collect all that data to do the analytics. They do competitive analysis. But what we want to do is help them look at what we call the enterprise risk chain, meaning, how can I take the risk out of the business to drive sales, to drive happy employees and drive happy customers? And at the end of the day, finance reports it. So you can see how it is really the beginning and ending of the entire operational process because they help them plan and they help them to react to the business to make the actual insights to drive profitable business.

Barba: So the IDC research found that investing in cloud-based systems is showing amazing benefits for retail and hospitality, especially in improved risk management, expanded market reach. Why is this so important for retail & hospitality, and then if you could maybe share an example of how Workday is making a difference?

Pickens: Yeah, let me just use the example right away. I think it's real important, right? We just were at the National Retail Federation Big Show in New York in January, and we had a big idea session with P.F. Chang's. Their COO was there to tell us about the value they're getting out of the Workday cloud products. They want to manage that profitability as much as possible. They wanted to expand their learning and training within the store so they can always have a good quality consistency between the different locations. And they actually used an example where one of the training modules that we have put out there for him is how to learn how to build a P&L and run a good P&L for the store. And so that has been a very big process for them, that every employee takes ownership of the ability to run a profitable store. The other thing they were talking about is how their attrition rate is now below pre-COVID levels. And so they attribute that to the ability to do self-service to the employee, and we make it a pleasurable experience where they feel connected to the brand, they feel connected to the process, they feel connected to their customers, and they feel like they're part of the overall story. And that's a big win.

Barba: Hearing it from the customer directly is always powerful, right? Like you shared that they said their attrition rate now is actually lower than it was before the disruption of the pandemic. That was incredible, one of those real-life examples.

Pickens: Yes. Exactly.

Barba: We couldn't have a conversation today, of course, without talking about AI and ML. Retail and hospitality companies are definitely investing in the power of this transformative technology. So what are some of the key opportunities that you're seeing for AI and ML in retail and hospitality?

Pickens: Well, first I'd like to talk about how AI and ML has been around for many years. This is not a new technology, but the way we are using it is different, right? What I like about it is Workday has it built in as part of our technology stack. It's inherent within our intelligent data core, with our business process framework. So you get the capabilities by having Workday. In the past, it's always been an add-on where it's always a complicated process where it has to work on top of other data, on top of other processes, and it's an afterthought. But embedding this now, you remember we talked about the art and the science. And AI and ML makes that process work much better. Remember, we talked about collecting and analyzing data and then making actual insights after that data has been collected. That's the power of ML. They're onboarding their employees for skills and training, the ability to interact with that process much sooner, much quicker, much faster. And you have that same journey continue with them throughout the process. That's the beauty of this technology where it evolves and learns not only at high level, but it goes down to the individual level. It can actually help that person scale to their, to the quality and the service they're expecting by each role in the company. On the financial side, think about this, right, the ability to look at transactions for anomalies and make sure we're always correcting constraints before they become problems, and identify those things that you might not see with the human eye or numbers that the machine might be able to tell you beforehand. So it helps you identify those things faster.

Barba: Incredible opportunities. It feels like the sky's really the limit for AI and ML with retail and hospitality, which is exciting, I think, and saving a lot of time, building efficiency, and really making employees' lives better.

So, finally, as we wrap up here, if you had to offer one piece of advice to retail and hospitality leaders as they head into this year, particularly related to what we talked about today, what would that be?

Pickens: Change is constant in retail and hospitality, right? I have, like I said earlier, I personally have experienced at least eight major transformations in my 42 years in retail. So it's never going to stop. Customers and our guests within our retail and hospitality companies want experiences. They want entertainment. They want value from those products and services we provide them. So that's real key. What is important here is we do not want to change our customers' businesses. We want to improve it. You go to a baseball analogy, right? We want to improve the swing. We don't want to change the swing. And I think that's critical. A lot of software, you have to change the way you operate to fit the software. Our system allows someone to improve what they do. That's a big difference. That's powerful. And I think that's the benefit of Workday.

Barba: Thank you again, Keith, for being here. It's been great to hear your insight related to the research. And, sounds like retail and hospitality have some challenges on the road ahead, but also lots of exciting opportunities. So thanks again.

Pickens: You're welcome. Thank you for having me.

Barba: We’ve been talking about challenges and opportunities for retail and hospitality with Keith Pickens. In case you missed it earlier, here are the URLs again to download the research from IDC that I mentioned earlier. For the retail research, it’s workday.com/idcretail and for the hospitality version, it’s workday.com/idchospitality. Again, workday.com/idcretail and workday.com/idchospitality. If you enjoyed what you heard today, be sure to follow us wherever you’re listening today, and remember, you can find our entire catalog at workday.com/podcasts. I’m your host, Jeremiah Barba, and I hope you have a great workday.