Saibal Ray: “Online purchase and in-store pickup”

Many retail outlets are now pivoting their service offering to focus on creating ‘frictionless’ consumer experiences. The fundamental goal behind this change is reducing consumer friction to ensure an improved customer experience. But beyond frictionless, COVID-19 has also precipitated a shift towards ‘touchless’ as well as customers are seeking to minimize physical interaction. Pre-COVID, the […]

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Many retail outlets are now pivoting their service offering to focus on creating ‘frictionless’ consumer experiences. The fundamental goal behind this change is reducing consumer friction to ensure an improved customer experience. But beyond frictionless, COVID-19 has also precipitated a shift towards ‘touchless’ as well as customers are seeking to minimize physical interaction. Pre-COVID, the consumer wanted something experiential. Something they could see, feel, touch or smell. Now, people want much less interaction.

As part of our series about the future of retail, I had the pleasure of interviewing Dr. Saibal Ray, Academic Director of the Bensadoun School of Retail Management and Professor of Operations Management at McGill University.

Dr. Ray’s research interests broadly relate to supply chain risk management, retail operations management, agri-food, natural resources sectors and marketing. His research has been published in reputed journals and he has presented at a number of international conferences. In his latest book Channel Strategies and Marketing Mix in a Connected World, Dr. Ray puts the spotlight on how the digitalization of the retail channel affects consumers, products, and sustainability.

In the COVID-19 context, his most recent co-authored research discusses strategies retailers can adopt to navigate the post-pandemic landscape, and all the ways consumer behaviour has changed.

As the head of McGill’s retail school, he is leading the development of a cutting-edge frictionless store research laboratory in partnership with a major Canadian retailer, slated to open to the public in late 2020. He also recently launched this month a unique Masters program in retailing.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

My name is Dr. Saibal Ray. I am the James McGill Professor of Supply Chain Management at the Desautels Faculty of Management at McGill University. My primary area of expertise is supply chain management as it relates to retail. I am also the Academic Director of the Bensadoun School for Retail Management at McGill. In my role, I handle everything for the school related to academia. My background is in supply chain optimization. I am someone who enjoys reflecting on how we can make the world around us more efficient. As I got older, this line of thinking led me to two critical questions: Firstly, “How can we make things more efficient for both companies and consumers in our everyday lives?” Secondly, “How can these improvements be applied to and directly benefit society at large?” These are the two main drivers that underscore all the work I do and why I am passionate about retail.

Can you share the most interesting story that happened to you since you started your career?

From my perspective, one of the greatest (and often hardest) hurdles we as scholars aim to overcome is breaking down the barriers between industry and academia. Too often, retail industry stakeholders view our work as removed from practical matters. Viewed in this way — as academics sheltered away in ivory towers — industry players struggle to see us as allies.

Some of my proudest moments in my current role have been instances where key retail actors have recognized the value in the research and work we are doing and understand its implications for their businesses. For contractual reasons, I cannot disclose any names but we have frequently collaborated with large Canadian retailers in the past who have come to us seeking to address specific problems they were struggling with — problems our faculty and students directly address in their research.

This continual recognition from the private sector of our school’s growing leadership role is a narrative I find particularly interesting and one I always enjoy discussing.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson or takeaway you learned from that?

I first started on this journey to build a retail school in 2012. When I enthusiastically told my mother we were planning to open a retail school and that I would be leading the project, she was so distraught and disappointed! She thought I would be giving up my university job to become something like a shopkeeper.

This is a funny story in retrospect, but I think it highlights an image problem we currently face in the retail industry in the eyes of the uninitiated public.

There is a clear need for educating the public on what retail really consists of. One of our overarching goals is to broaden the definition and understanding of what retail encompasses to educate the public about what retail means in 2020. For us, it does not matter whether a business is online or brick and mortar. It does not matter if it is a publicly traded company or a Mom and Pop shop. Anything that depends on a consumer is retail to us. Uber, Amazon, Walmart, airlines, banks, corner stores, public services (e.g., government),… At the heart of all these companies is the consumer. Anyone who deals with a consumer is a retailer to us and that makes our job that much more exciting.

Are you working on any new, exciting projects now? How do you think that might help people?

It is a busy but exciting time to be at the helm of the Bensadoun School of Retail Management. We are involved in multiple projects at both the academic and industry levels. Right now, we have already launched multiple new academic programs centered on ‘new retail’ including an undergraduate retail management program specialization, a Master of Management in Retailing as well as a PhD Program in Retail Management. We have also launched a first of its kind a Retail Innovation Lab which will offer omni-channel retail activities in a ‘live and open’ setting and foster collaborations between inter-faculty academics and key players in retail, emerging technologies and start-ups.

Beyond the classroom, we are also seeking to equip retail professionals with the knowledge necessary to successfully navigate our industry as it constantly shifts. We are publishing research, hosting conferences and thought-leadership series as well as providing executive education workshops to ensure we are supporting the current retail industry while nurturing the upcoming generation.

All these initiatives have been designed with the goal of bringing academia, industry, and public policy together to exchange ideas, craft strategies, and solve emerging problems related to the future of retail. We hope to play a key role in that movement.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

Specialized retail schools house the industry’s top thinkers, latest research and thought leaders to help retailers tackle industry questions and solve current challenges. Schools who hyper-specialize in a field provide access to elite talent in professors, students, and infrastructure. From my perspective in the retail sector, we would encourage the private sector from any industry who requires support in addressing some of their respective challenges, to reach and partner with universities to take full advantage of the wealth of resources they have to offer. Utilizing the talent and resources that are available is how I recommend avoiding “burn out”.

None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story?

Given all the projects we are currently working on, my schedule has been very demanding of late. Fortunately, I have a strong support system in the form of my wife and daughter who are patient and understanding with me in spite of it all. Each day they give me the strength to go on and have been very supportive of me every step of the way.

How have you used your success to bring goodness to the world?

Generally, when people think of retail, they envision the Amazons and Walmarts of this world. However, a lot of our work at the Bensadoun School of Retail Management is focused on the individual and society at large and towards small retailers. For example, sustainability, privacy concerns, and healthier lifestyles are but a snapshot of the issues I have sought to bring to the forefront of discussions in the industry. I take great pride in leading a specialized school like ours and pushing the boundaries of what the larger public believes retail can do for society. If there is a genuine effort to improve society through a consumer lens, it will be critical that retail play a part in the process.

Ok super. Now let’s jump to the main questions of our interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share five examples of different ideas that large retail outlets are implementing to adapt to the new realities created by the Pandemic?

The shift to online shopping was not a result of the pandemic. We must remember that e-commerce was already established well before COVID-19 made its appearance. Rather, the pandemic has dramatically increased the timeline of e-commerce growth. What we projected would be the norm in 2025 is now coming to pass in 2020. Some examples of strategies the industry’s larger players are currently using include:

  1. Online purchase and in-store pickup.
  2. Legacy retailers experimenting with curbside pickup, so customers don’t even have to step outside their vehicles.
  3. As we have seen with the spike in demand for the postal service, retailers are frequently leveraging postal delivery to reach their customers. And while at-home delivery posed the problem of the occasional absentee or timid recipient, a postal office drop-off centre means retailers can leave products at designated locations and ensure orders are well-received.
  4. Another very popular strategy is large-scale vending machines that dispense products and merchandise beyond the traditional food and snack offering we often see in North American vending machines.
  5. Finally, many retail outlets are now pivoting their service offering to focus on creating ‘frictionless’ consumer experiences. The fundamental goal behind this change is reducing consumer friction to ensure an improved customer experience. But beyond frictionless, COVID-19 has also precipitated a shift towards ‘touchless’ as well as customers are seeking to minimize physical interaction. Pre-COVID, the consumer wanted something experiential. Something they could see, feel, touch or smell. Now, people want much less interaction.

In your opinion, will retail stores or malls continue to exist? How would you articulate the role of physical retail spaces at a time when online commerce platforms like Amazon Prime or Instacart can deliver the same day or the next day?

The big opportunity right now for retail is ‘omni-channel retailing’ which is a mix of online and physical. So, the question becomes “How can we harmonize the pros of physical retail spaces with the convenience of online platforms to make them work together?” In an ideal scenario, consumers can go to the store or shop online and have same overall experience.

Yes, the number of physical stores owned will surely decrease, but that does not mean stores will go extinct. The rules of stores will change as they will likely become both a showroom to display new products, and a warehouse where customers can return products and make purchases.

To recap, there are three elements: the role of stores and how they will change, the push towards omni-channel retailing, and the footprint of the stores and how the number may decrease — not all stores will survive.

The so-called “Retail Apocalypse” has been going on for about a decade. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?

One of the big things to understand is that retail is not failing, in fact retail is doing very well. It is just that the winners are winning big and the losers are suffering crushing defeats. Retailers like Lululemon and Costco are doing extremely well, while the J.C. Penneys of this world much less so.

The reason that the winning retailers are doing so well is because they are focusing on one of two things: being a high-end retailer with high-end commodities OR being consumer focused and attentive to the consumer experience. To succeed in retail right now, you must be one or the other. The companies in the middle seem to be the ones that are failing. Take J.C. Penney and Sears in the U.S., and The Bay in Canada for instance. You could make the argument they are performing poorly because they were never truly able to decide what they would be defined by.

Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise to retail companies and e-commerce companies, for them to be successful in the face of such strong competition?

With Amazon’s most recent announcement on the introduction of an online pharmacy (prescription and non-prescription), the company is creating even more pressure on the retail industry. Amazon is becoming like a mall — a general retailer. There are certain retailers that have decided they simply cannot compete in volume. But, even during these tough times, there are specialized retailers who are doing very well and can compete. Perhaps the key is to specialize on a particular sector.

Examples of these would be Wayfair and Chewy — they are focused retailers who are proving they CAN compete. They are more focused on doing one thing extremely well, which allows them to compete with Amazon. Retailers who want to be all things to all people are having a very difficult time.

Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

I think there is an immense and pressing opportunity to act in the sustainability sphere. Sustainability must go beyond words and plans. It must actually be implemented. It is not enough to tell customers to return products or to recycle for example. We need to figure out how we can make it easier for them to do those things and how we can incentivize the process. There’s a small percentage of people who will act on this of their own virtuous volition but a larger portion simply won’t do it without the proper incentives. There is an opportunity and need to incentivize sustainability efforts to make it easier for people to consume sustainably. We talk about frictionless and convenience in retail… the same thing applies to sustainability. How can we make it convenient? How can we implement it? While it is something I strive to do on a daily basis in my work, it would bring me a great deal of pride to spearhead a movement like that on a grander scale.

How can our readers further follow your work?

Through the Bensadoun School of Retail Management website.

This was very inspiring. Thank you so much for joining us!

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