Next Generation of Retail - with Ricardo Belmar, Gautham Vadakkepatt

Welcome to the Retail Rundown, your go-to weekly podcast where RETHINK Retail teams up with industry experts to discuss the news and trends defining the world of retail.

In this episode, RETHINK Retail advisor Ricardo Belmar sits down with guests Gautham Vadakkepatt and Jeff Roster to discuss the role of academics in retail and how they are helping to create “new knowledge” for the next generation of retail innovators.

Gautham Vadakkepatt is the Assistant Professor in Marketing and the Director of the Center for Retail Transformation at the School of Business at George Mason University.

Jeff Roster is the Chairman of the Retail Advisory Board at Apptricity and the former VP of Strategy at IHL Group. Jeff is also the co-host of the This Week in Innovation Podcast.

If you enjoyed this episode, please let us know by subscribing to our channel and giving us a 5 star rating us on Apple Podcasts. 

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Hosted by Julia Raymond Hare
Written and produced by Gabriella Bock
Edited by Trenton Waller

 

 

TRANSCRIPTION

Ricardo Belmar:
Hello, and welcome to the Retail Rundown. I’m your host, Ricardo Belmar. And I’m here today with my guests, Gautham Vadakkepatt and Jeff Roster, to talk about the role of academics in retail transformation and innovation. Gautham is the assistant professor in marketing and the director of the center for retail transformation at the School of Business at George Mason University. Jeff is the chairman of the retail advisory board at Apptricity Corporation and the former VP of strategy at IHL Group. Gautham, Jeff, thanks so much for joining me today.

Gautham Vadakkepatt:
Thank you, Ricardo.

Jeff Roster:
Glad to be here.

Ricardo Belmar:
So we’re talking about the role of academics in retailer innovation today. And there’s no question that the retail industry is undergoing massive transformation. Of course, some of it was induced by the pandemic, but much of it was already happening in the before COVID days. Retailers traditionally are used to incremental innovation rather than radical, disruptive transformation, but now they find themselves at an inflection point, which, I think, can be summed up as an innovate or die moment. And we see the outcome of this in the financial results that retailers have been reporting, where those that performed spectacularly well during the pandemic in 2020 versus those that perform not so well, in some cases, were forced to shut their doors. So the issue becomes where does this radical innovation and disruption from technology come from, if not from inside retailer’s own four walls? And one of those options, which is what we’re talking about today, is from the academic community. Gautham, you recently launched the retail transformation center at George Mason University. Why don’t you tell us a little bit about the primary goals for the center, with respect to innovation and transformation?

Gautham Vadakkepatt:
Sure. Thank you, Ricardo. So the purpose of the center is to try and combine forces around small and medium-sized retail and allow them to become more nimble and agile and be more in the new retail context. So retail, as we know, is facing a lot of headwinds from technology, changing supply chain, a need to be more data-driven and customer-focused. And while the large companies are doing great and have the resources that can allow them to innovate, try new things, and fail, the smaller companies have a little bit of a challenge, not just with the resources, but also with figuring out what kind of innovation activities to kind of engage in. So the idea behind the retail center is to try and help this group of retailers to be nimble and to be more innovative in their own product offerings. And that’s the primary objective behind the retail center that we have set up at George Mason University.

Gautham Vadakkepatt:
And as you might know,  the small and medium-sized retailers, and I’m defining this very broadly as anyone that makes maybe under $1 billion or so are the bread and butter and the largest part of the retail sector, and they probably account for about 90% of all retail. And so how do we get them to be more agile and more innovative? That’s the primary focus of the center. And we do it through three things that academic institutions are well known for, is that we have a large body of students, and we’re going to use the students to enable this transformation, both to research and to actual application. We have a lot of quality faculty who engage in research, and we’ll use, through their support and their help, we’re going to conduct research that actually addresses the critical challenges of small and medium-sized retail.

Gautham Vadakkepatt:
Academics are great at convening thought leadership. And so the last aspect that we’re going to do is to try and convene thought leadership around the space and try to shed light on the challenges of small and medium-sized retail and focus resources towards getting them to be more nimble. And if I may, I would also like to add one little thing, which is that you started by asking, Ricardo, where does innovation come from? And I want to also point to the fact that a lot of innovation, academic institutions are centers of basic science. And a lot of these innovations that you see in the retail sector originate from basic science, be it TV, be it internet and so forth and they are just applied in the context of retail. So yes, academics do have a role to play in some of these really innovative applications that are rolled out, perhaps not to the extent we would like, but there is that opportunity.

Ricardo Belmar:
Well, that sounds very exciting. And I think I particularly like the notion that you’re focusing on a segment that we might think of as, in many ways, underserved by a technology community, and that would be in the small and mid-size retailers. We always hear reports of what large retailers are doing and what kinds of innovations they’re introducing. But it sounds to me, one of your goals is to really help bring that level of innovation transformation into the small and medium retailer space that otherwise may lack the resources to do it themselves.

Gautham Vadakkepatt:
Exactly. And my belief is that individually, they might not have the resources. Collectively, yes they could. And innovation has to be democratized in some ways, and that’s the focus of the center.

Ricardo Belmar:
Excellent. I like the collaborative nature that it sounds like you’re really promoting here to try to bring the industry together, again, particularly in that small and mid-sized space, so that people can work together and also benefit from that collaboration as a whole, rather than in a piecemeal manner.

Gautham Vadakkepatt:
And not just industry. Ricardo, there are other players that are equally impacted by the government, the policymakers, for whom the small and medium-sized retail are an important role because they do pay taxes and they are a revenue source. So there are all these other players who have a say in the success of this group. And so we’re trying to bring together all of them and to say that, “Hey, collectively, we can do this. Maybe not one of us can do it, but together we can.”

Ricardo Belmar:
So for example, you’re saying you’re also bringing in representatives from, let’s say, governments, local governments, policymakers. Are you also reaching out to people on not just the retail community, but the rest of the larger ecosystems? So that’s got the technology providers, service providers, commercial real estate people. You’re looking for a very inclusive group to help in this collaboration.

Gautham Vadakkepatt:
Yes, we already have people from the real estate ecosystem, the technology solution providers. We have the policymakers, at least locally involved, trying to reach out to the trade associations as well to get them involved. Because as I said, you rightly said it, the more inclusive, the better, and greater the representation from all the media folks. They have an important say in trying to get the word out. So anyone and everyone who touches the venture capital group, the analyst group, anyone and everyone who touches the retail space, want to get them involved in some way, in a meaningful way, not just for the center and the small retailers, but also for themselves, to try and push the agenda.

Ricardo Belmar:
Great. So Jeff, let me turn to you next. You’re obviously no stranger to retail innovation. So if you’re thinking about the history of innovation and retail and how much of it does, in turn, come from non-retailers, let’s say, what’s your take on how academics can contribute based on what you just heard Gautham talk about? What do you believe retailers’ expectations will be?

Jeff Roster:
So, interesting. If you listen to what Gautham just said, the number of students that could be engaged in this research process, the number of professors, we have plenty of analysts and consultants and whatnot. To a certain degree, we all have a bit of a bias. And I think when I look out over the landscape, the only people that are really net neutral are going to be universities. So we have a few universities that are focused on retail and some aspect of it. What I really like what Gautham’s position in here is, first of all, going after SMB retail, which is the bread and butter of virtually every society that I’ve looked at. And being able to look at whatever issues we want to go after is just a phenomenal opportunity, I think.

Jeff Roster:
Whatever issues we want to go after, is just a phenomenal opportunity I think. I want more people that understand the economics, the numbers, they can communicate out what’s happening, and hopefully, some of these kids end up becoming reporters and journalists and write about our industry, but from an intelligent perspective, and not necessarily just chasing a byline or a hot selly sort of theme that some of us have been wrestling with for so long. What are the retailer expectations? Hopefully, somebody that’s objective, somebody that can look across various technologies, various needs for analysis, and can push out good research. Unbiased, good research, not designed to inflate one vendor versus another vendor, but can just look at what’s happening. I’ve been hanging out a lot in the startup world and everybody’s talking about AI and Analytics. I mean, we cannot hire enough of those folks, and so the more attention we can bring to the science and study of retail, I think is going to be exactly what we need going forward.

Ricardo Belmar:
And certainly areas like AI and Analytics, I mean, those to me are just natural areas that we expect academic researchers to be doing a lot of work in that space and contributing to the knowledge set that retailers would certainly benefit from. And I think this is where you were headed Jeff, that your retailers, they really need more people on staff that can understand these technologies and leverage them and apply them to the right use cases, and I think that’s maybe a shortcoming that unfortunately retailers are, in many ways suffering from today, they just can’t hire enough people to cover those areas in a knowledgeable manner. So why not turn to the academic community that is in many ways, originating much of this research.

Jeff Roster:
Absolutely. Get in front of the demand, help create the people that can fill these roles. I mean, it’s going to be hard to look at how big that space is going to be, but it’s going to be massive. And we already know we do not have enough folks that can handle this. And so when I look what Gautham’s research agenda is, I just think, “Wow, this is fantastic. This is exactly what we need.”

Gautham Vadakkepatt:
And if I may add the conversation, right? We know that the bigger companies get the talent that’s needed with AI, with technology and so forth. There’s a lot of people lining up to interview with them, and the hope is to actually showcase to the students, the future generation of retail, right? The up and coming, the promising bright stars that, “Look there’s opportunity to be made, even in the smaller, medium-sized.” There’s greater opportunity in some ways, because you get exposed to a larger gamut of options, and the scale of learning for them and resume building is a lot larger. And to expose them to these challenges that smaller, medium-size retail face. I teach a few classes at Mason, and generally, there’s still a lack of information about the level of technology in AI and Analytics that’s needed in the new retail. So part of it is us coming together as a whole to call us to kind of bridge the gap and to get information out there and to kind of get that future supply pipeline taken care of.

Ricardo Belmar:
Yes. I like what you just said there about how we’re, in essence, kind of preparing and building up this future environment where we’re creating a more knowledgeable young workforce entering the ecosystem for retail, starting with the students. But honestly, I guess I would claim that if you were to do educational workshops in different technology areas that retailers would want to come to that and learn for themselves as well, and that all of these efforts would collectively raised the knowledge level that’s needed for the new retail environment.

Gautham Vadakkepatt:
Absolutely. That’s the hope. And I have to say, this is a longer-term plan, right? So change is starting at the grassroots. So we’re going to implement the change in a systematic and methodical manner to get that. Build the foundation to achieve a more promising and bright future for the retailer license that everyone is talking about.

Ricardo Belmar:
So given that we’re talking about, you’re building a foundation and that this is a long-term goal, I didn’t want to bring up into the discussion here, a little bit about some of the challenges that people have in the past always, and I’ll use the word against, not to just sound overly negative. But let’s say a criticism that we hear often is that academics bringing this type of transformation innovations for retail, it’s an issue of speed. And if we accept that retailers were already not in the fastest mode of creating this kind of innovation, there is this belief in the community, right? That maybe academics aren’t all that much faster than the retailers are. How do you respond to that notion of how fast can you go?

Gautham Vadakkepatt:
Is it my turn, Ricardo? I’ll kick it off since I’m the academic here. So I think it’s, let me walk the balance line because Jeff said like, “Hey, we want objective statements,” right? So I think it’s a fair statement in some ways, and in many ways, it’s an unfair statement also. I agree that when you’re talking about research, sure, published research takes a while to get out there, right? To see the final light at the end of the tunnel, might be a few years down the line. That being said, the initial idea and the initial output is actually out there fairly quickly, six months or so. the bigger challenge is actually creating awareness of like, what’s the research that’s going on out there? And what’s happening? And to kind of get the industry to see it and to follow it, that to me is a bigger challenge, not as much the speed of the idea generation itself.

Gautham Vadakkepatt:
There’s also a few other challenges that I want to kind of bring about, right? So us as academics, we are trying to create new knowledge. Which means this knowledge should be in a position where you can generalize to certain contexts, certain conditions and so forth. That requires it to be tested, and particularly rigorously. And many times from a business perspective, the challenge is that we don’t have access to some of the data. And that’s part of why the center set up is to build that bridge so that we can actually move that equation faster, move it forward faster, so where we have very talented faculty who are looking to do really good research, but then sometimes the hurdle is getting the resources. So that’s one challenge, and the other aspect is that what I would like to also say is that we have, in most businesses, you have people who are generally specialists, right?

Gautham Vadakkepatt:
Like they take on say the AI role, the Data Analytics role. Academics play multiple roles, we’ve got to mentor the future, we’ve got to develop them and to challenge them, and we’ve got to also conduct research to push the knowledge frontiers. So there is a resource allocation issue as well. But in general, most research does get out from the researchers’ desks to some kind of online medium in about six months to a year. Whether it gets published in a journal, that takes about two to three years. And so that’s where the fair comment, actually, I agree. That there’s a speed issue. And almost every sector has challenges, right? And you’ve talked about the pandemic being a driver for change. Even before the pandemic, we’ve seen academia understanding these challenges, and we are also innovating, where there’s almost every university has academic groups that are trying to figure out how to get the knowledge out there faster, reduce the cycle time for these publications, now there are special publication outlets where you can get the whole paper published in a year, year and a half.

Gautham Vadakkepatt:
When COVID came around, great example, you got to see so many papers published. I forget what the actual number is now, on COVID and how COVID affects various aspects of things, in under three to six months, right? So just like retail has been inspired by COVID in many ways and has been accelerated, so too academia has been challenged and has responded positively to these changes.

Gautham Vadakkepatt:
… challenged and has responded positively to these changes and has shown that, no, we can generate research that’s really fast. So I humbly argue that there are vestiges of the past for sure, but we are also relatively nimble and we’ll keep trying to innovate in our own space.

Ricardo Belmar:
That’s an interesting point to that and what I take away from that and what you’re saying is that, as academics, if you had better access to some of the data that you would need in some of the research you’d be doing, and given that you’ve launched this center, if you have active participation from retailers in the ecosystem, from technology providers, your expectation would be that, as we’ve seen in other fields during COVID, that you could very well produce tangible results from such research in a much shorter timeframe than maybe the historical evidence has suggested in academia, and it’s more a matter of being inspired at a faster pace from what you’re saying.

Gautham Vadakkepatt:
Yeah, that’s exactly my point. We’ve seen evidence of that and I’m talking from a business school faculty perspective where we are relying to a large extent on data from businesses to understand, to generalize to a larger extent, very much so that we can, and this is indeed the case is that there is an input problem with regards to the data and once we can figure that out, we can move faster.

Ricardo Belmar:
Well, Jeff, you’re a Silicon Valley native and you’ve been, as you said earlier, hanging out with tech startups, and we all know there are many tech startups targeting retail and it seems like much of the recent innovation we’re seeing for retail is coming from tech startups like that. Do you see a strong connection point here between these startups and what retail centers like Gautham’s can do together?

Jeff Roster:
So when you look at what’s happening with startups and you are in their space, they just want information. Most of them, some of them, are coming from a tech perspective and they see a problem in retail and they want to solve it. And the challenge with those folks is they are geniuses when it comes to technology and really don’t understand the nature of retail, the relationships in retail, sort of the business of retail. And any time I can get a startup engaged in that kind of a conversation to say, “Look, this isn’t a technical problem. This is a technical and a personal or human problem. And so you can solve some aspect of something with AI but you need to understand the relationships and how the industry’s evolved and the organizational structure of the business and things along those lines.”

Jeff Roster:
That’s where having a foot in the Valley with the tech guys and folks, and then tying into other business organizations like what Gotham is proposing, it’s just a no-brainer from a startup perspective. They want information, they want knowledge. They consume an unbelievable amount of knowledge. Now, the challenge that those folks have is they typically don’t put a lot of resources into paying for that research and so my former gigs at Gartner and IHL, we always had startup programs but you had to be at a certain level. And so if there’s a way they can tap into information to knowledge, build relationships, I just think that’s a no-brainer.

Jeff Roster:
And what the center is going to get out of that is they’re going to get literally cutting edge research or cutting edge experiences, viewing what’s happening in the industry. You go hang out here and look at what some of the retail startups are doing with AI, and you can see what the big players are going to be doing in a couple of years. I would argue we’re way ahead in some regards, because they’re playing with this stuff in real-time and they’re moving at real-time, and they’re highly motivated to move at real-time to try to bring their businesses online.

Jeff Roster:
So it’s just a crazy cool thing that could happen. Just people moving at the speed of light, tying into people that have dedicated their lives into studying problems. It’s just going to be a fantastic opportunity, I think.

Ricardo Belmar:
And do you see a possibility here where retail centers like Gautham, like what you’ve just launched, is there a potential to be a sort of an incubator for these types of retail tech startups, where there’s an active collaboration? You can kind of pool together with retailers that may have some of the source data that both you would need to look at with your students for some of the research, but at the same time that retail tech startups could be leveraging that same information to help improve and iterate on the solution they’re building at a much more rapid pace.

Gautham Vadakkepatt:
Yeah, that’s a really interesting question, Ricardo. Most universities do have incubators with them in some way, shape or form, and they’re often targeted at students and some of them at the local community. I think that that pathway is there. There are obviously, every industry evolves with regulations and policy changes and so forth. And as a university, that’s where most schools are heading towards is to have some of these be the hotbed for innovation, get these companies started in there. Are we there yet? Maybe not to the extent that we want to be, but that’s the longer term, at least from our center’s perspective. I can only speak for that. Yeah, that is our long-term vision in many ways is to kind of get us there where we can bring this nexus of people who support SMB retail and to help them and provide expertise in ways possible to get them to evolve to the next stage of their life cycle.

Ricardo Belmar:
Yeah, I think one of the things I’ve noticed, especially over the last year during the pandemic in this retail community, is the strong need for collaboration across disciplines. So whether that’s retailers and tech startups, and academics being kind of the glue that helped bring that together, but there are also other areas. I think we touched on them a little earlier, for example, in the VC community and the commercial real estate folks. I imagine you see that all of these are groups that could benefit from collaboration within the center and that that is another role that academics can play is being that connection point across all of these different communities where they need to be talking to each other more in order to solve the challenges they now have.

Gautham Vadakkepatt:
Yeah, I hundred percent agree, right? Jeff started off by talking about the fact that there needs to be someone who is objective and one can very safely say that academia is relatively objective with no real skin in the game, besides trying to push the knowledge frontier even further. And to that extent, I think we can lead that convening space, trying to get people to have these uncomfortable and promising conversations, moving things forward.

Ricardo Belmar:
Jeff, from your perspective, do you think that makes sense as a, let’s call it a collaborative platform?

Jeff Roster:
Oh, I think it makes perfect sense. I mean, I’ve spent what, the last two months kind of playing around in clubhouse, and in 20 years of research, I’d never spent 10 seconds thinking about the commercial real estate piece of retail. And in the last two months, there’s hundreds of rooms and I’m listening to the real estate people talk and I’m thinking, “Wow, what a missed opportunity I had to get some different aspect of retail.” And you can see that sort of the retail real estate folks and the retailers talking and beginning to engage. I know they always have to a certain degree, obviously, because they’re in business together, but as far as collaborating, what this whole evolution of the new shopping mall is going to look like, and there will be new shopping malls. They’re going to evolve, they’re going to change, but the idea of micro fulfillments and dark stores and pick and pay and all that sort of stuff requires not just a retailer to think about a new strategy, but also the mall owners.

Jeff Roster:
And so you’re seeing that collaboration become very, very significant. I think something like an academic institution really provides that-

Jeff Roster:
An academic institution can provide that framework for bringing these people together, and I think there are some really interesting opportunities because the new mall is not just going to be a technologically enabled masterpiece. There’s the human aspect of that. We have to understand how human behavior is shifting around. How do we as humans want to interact with technology and with retail? And so I can’t think of a better place for some of that aspect to be brought in and analyzed in a university environment.

Gautham Vadakkepatt:
And the future is in the university. The younger generations are in the university, and that’s a captive audience in many ways. Of course, the move online is changing that, but that allows you to actually test and try these new concepts and really understand what it means for the future generation, what the idea of a mall actually means for the future generation and get there before others do.

Ricardo Belmar:
I think there’s even a great opportunity here to your point, Gautham, by bringing the retail ecosystem into the university environment, students get much better exposure to what that retail world is. For example, as Jeff said, all the time spent as an analyst not thinking about commercial real estate and how that absolutely has an important role to play in this ecosystem by bringing all these groups through a retail center. I would expect to see university students, honestly, becoming more interested in this space and as a career objective, as something that they would want to be part of in the future where they can have an impact. And as each new generation comes through the university, we need that new level of innovation and desire to be injected into the greater retail community so that we can more rapidly institute the changes that need to be done just to keep up with consumer shopping habits.

Gautham Vadakkepatt:
Absolutely, Ricardo. Let me just give an anecdotal example. When I talk to my students and my graduate assistants, they are from a data analytics perspective and data analytics students, I’m like, “Hey, why not? You should apply for retail jobs.” And like, “No, I’m not going to.” I’m like, “Why?” And oftentimes the answer is that their perception of retail is, I’m not going to say this in a negative way, but their perception of retail is the big box retailers, they don’t have exposure to the various elements of retail besides perhaps merchandising and things that you see as you walk through a store. So exposing them to these various facets that allow retail to be so dynamic and ever changing is a critical aspect.

Gautham Vadakkepatt:
And that’s why when I set out to form the Advisory Council, it was very, very intentional to attract people from the various stakeholders in the retail ecosystem, be it the policy folks, be the technology solution providers, be it the analyst group, be it the media group, whatever, everyone has a hand, and we need to create exposure to the students to get them to target retail as a vibrant space to enter and have a career. And this allows us, the center will hopefully get there, and bridge that gap and increase that awareness.

Ricardo Belmar:
Well, Gautham and Jeff, this has been a really fascinating conversation. I think we’ve exposed here a tremendous potential for the contribution academics can make in retail transformation through vehicles like the center that you’ve just launched, Gautham, at George Mason University. So I want to thank you both for joining me here for The Rundown this week. Gautham, if listeners want to find out more about the center, where would you direct them to?

Gautham Vadakkepatt:
So I’ll direct you to the School of Business website, gmu.edu. You could also reach me directly and you can find me on LinkedIn as well.

Ricardo Belmar:
Great. Thank you. And Jeff, thank you for being here. I want to give you a moment to do a quick shout-out. I know you just launched a new podcast. Do you want to tell the listeners really quickly where they can find that?

Jeff Roster:
I did. It’s called This Week In Innovation, an analyst and a VC talk about retail transformation. Hopefully, that’ll be a platform that folks like Gotham can come and present research on and we can have a good rousing, stimulating conversation about it. Hopefully, it’ll be available on almost every podcatcher right now. We’re still not up on iTunes. We have another 10 days or so, but you will find it just about everywhere there.

Ricardo Belmar:
Great, fantastic. And once, again, I’m Ricardo Belmar. It’s been a pleasure to guest host The Retail Rundown this week. And I want to thank all of the listeners for tuning in. And, again, if you want to reach out to any of us, we’re all accessible via LinkedIn. Thanks, everyone.

Gautham Vadakkepatt:
Thank you.

Jeff Roster:
See ya.

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