Retail’s Intel Moment Or Why Omnichannel Retail Needs A Makeover

May 12, 2016

Omnichannel Retail

Retail’s Quandary

Omnichannel Retail – First it was the print media. Now it is retail. Software may not be eating the world just yet but it certainly is painfully transforming sectors. Nary a day goes by when we don’t hear a retailer struggling to meet its sales targets yet again. Store sales languishing, eCommerce growing albeit at lower margins, and Amazon’s dominance looming ever so larger. The industry has certainly seen this coming for sometime. And there have been numerous attempts to respond, the most noticeable one being Omnichannel. Yet brick and mortar retailer after another have been reporting dismal numbers and these initiatives have not been making the expected dent.

Perhaps it is time to take a pause. Think long term and more strategic as opposed to the current tactical responses being dished out under Omnichannel.

Perhaps it is time to look at other’s who have been in a similar situation before. In an industry that is inflicting the pain today but was struggling then. Technology and the story of Intel.

Intel’s Reinvention Story

While Intel created the first microprocessor in 1971, it was also an early developer of RAM memory chips and it constituted a large portion of the overall business until the 80’s. The early 80’s saw rising competition from Japanese memory chip manufacturers and resultant decrease in profitability. In a move documented in multiple business books, Andy Grove and Gordon Moore sat down and asked themselves:

if we were fired and asked to leave, what would the new leadership at Intel do?

They then very objectively came up with a plan that included focusing exclusively on microprocessors and getting rid of the memory business. As Andy Grove later wrote, they then decided to:

“walk out of the door, come back and do it ourselves”

The rest as they say is history.

What Does That Have To Do With Omnichannel Retail?

We will get there in a moment. But first some history. Traditional retailers early response to Amazon and eCommerce was to set up a separate eCommerce unit completely divested from its traditional brick and mortar business. To borrow from biology, akin to an appendix or vestigial organ as opposed to one that was at the center of its future business. With every passing year, eCommerce and store businesses kept growing to meet growing demand. As the competitive threat of eCommerce started to loom large, omni channel retail with dual presence have responded by devising Omnichannel as their strategic advantage. Multiple fulfillment and delivery models such as “Buy Online Pickup In Store”, “Ship From Store” etc, have been launched with the belief that customers wanted that. When in fact what they have always wanted is a great product at a compelling price point, when they want it. All without making them think!

Meanwhile, internally, eCommerce and brick and mortar businesses continue to operate separately for the most part and in fact are competing for the same customer. Two businesses, two cost structures, two technology stacks, attempting to talk to one another under the guise of Omnichannel and working to satisfy the same customer.

Omnichannel Retail’s Rallying Motto

More can be done to re-position the store as the tip of the digital eCommerce iceberg.

It’s time for retail to borrow from Intel’s playbook and take a stance. Ask what Andy Grove and Gordon Moore asked themselves:

If we were fired and asked to leave, what would the new retail leadership do?

Then do what they did. Walk out the door, come back and just do it.

Still unsure and need to kick-start that thought process? Ask yourselves and your associates this simple question:

What if the web came before physical stores?

Yes. You got that right. What if your eCommerce platform already existed and was thriving before you opened your first store? How would you then re-purpose your business? Operate two of everything to serve a single customer? Or you would put all your eggs in one basket and take a stance?

The implications of this question are far reaching and we’ll talk about them in another article. What brands will survive, which categories could build a semblance of a moat, how technology should be leveraged and associates organized. All along retailers have attempted to bring technology into retail. They should work the other way around instead.

Meanwhile, it’s survival time. Choose wisely.


If there is anything that the print media’s transformation from early 2000’s and Intel’s strategic shift from 1970’s tells us is that who drives the change matters. While transformation is painful up close, who drives the change determines how deep and how long that pain lasts. And in what shape one emerges at the other end.

It’s Omnichannel Retail’s turn to choose.