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The last in a series of previews of the upcoming FMI MarkeTechnics Show…

Over the past eight weeks or so, MNB has featured a series of exclusive e-interviews with some of the speakers who will be seeking to enlighten the retailers, manufacturers, and service providers who will be attending the Food Marketing Institute (FMI) MarkeTechnics Show in San Francisco next Sunday, Monday and Tuesday, February 29-March 2.

This week, as we get ready to pack up the laptop and head off to one of our favorite cities in the world, we engage in a discussion of the main themes that will be explored at MarkeTechnics with FMI senior vice president Michael Sansolo. And we start with the level of commitment being shown by companies to technological innovation.

MNB: Is it your sense that companies are really willing to innovate and be pro-active in their technological initiatives? Or are most chains just being reactive, doing just what is necessary to get by? (And can you survive in this business anymore by taking the latter approach?)

Michael Sansolo: Given the incredible diversity in our industry, the answer to all parts of your questions here are “yes.” There are companies exhibiting all these behaviors. Some innovate and some take a wait and see approach and both strategies have their risk. The trailblazers frequently create some advantages for themselves, but must also bear the risks of being innovators. The laggards run the risk of getting left behind, but also know that technology can enable them to catch up pretty quickly.

What seems to be more important is the need to have a technology strategy and to make certain that strategy is tied to the overall goals of the company. No one does technology for technology’s sake anymore. There has to be a clear business reason and benefit that drives technology decisions. There has to be a clear sense of how technology will improve the shopper experience. That type of discussion is far more obvious at the moment.

MNB: Since the last time FMI MarkeTechnics met in San Francisco, what is the biggest change that has taken place that you never would have foreseen?

Michael Sansolo: That’s a tougher question than most would believe without carefully remembering the last time we held this meeting in San Francisco. It was February 2000 and the technology world was a very different place. At the time, Y2K had been successfully completed, the NASDAQ was above 5,000 and dot coms were all the rage. The discussion that year was all about how quickly dot coms were going to win the battle against “brick and mortar” retailers and how technology was taking over.

Clearly, a lot of events have happened since that no one ever anticipated.

Looking back at the program from that year, it’s obvious that technology is a topic that can’t be easily predicted. Change is constant and rapid and companies in our industry must make every effort to stay current on myriad topics and developments. Even though the NASDAQ has dropped significantly and dot coms have gone bust, technology remains a topic that we must all understand and utilize. Ignorance isn’t bliss, it’s doom.

There is one other important aspect of unforeseen events. Technology can enable some really bad behavior and we must be constantly ready. We never could have anticipated the kinds of virus and hacker attacks that happen constantly. We’ve seen how even coupons can become an incredibly challenging problem in the world of modern technology. Simply put, we can’t rest.

MNB: What do you think the single biggest technological change will be in the next five years?

Michael Sansolo: Given that I wouldn’t have made a single correct prediction five years ago about today, I should be really hesitant to look that far into the future. However, I’ll try.

Clearly, we will continue to talk about the impact of radio frequency identification chips on our supply chain; we’ll continue to look for ways to use technology to streamline communication and information flow in our industry; and we’ll continue to examine how the Internet can be used in all parts of our organization, from internal communication to on-line shopping.

The one prediction I would make is that there is probably one technology we currently have today that will be far more significant in five years than we currently think. Five years ago—even 10 years ago—self-checkout lane technology existed and the units were in scattered use around the country. Today, they are a major trend. As always, the shopper determines what wins and loses.

MNB: What does the industry need to do to prepare from an infrastructure perspective for these coming changes?

Michael Sansolo: Partially this answer has nothing to do with technology. The key infrastructure change is getting management teams to recognize the relationship technology has with the entire company’s goals. Without that alignment, technology won’t deliver on its promise.

Beyond that, companies need to continually clean up data and examine how internal system can best be synchronized with supply partners to ensure the best flow of information throughout the system—from suppliers through to the store. Transparency and communication seem to be imperatives for future success and the systems (and support) must be there to allow this to happen.

Much of that is an attitudinal and management change. There is growing evidence that the companies who are winning today are those who are learning how to embrace this kind of change.

MNB: From earlier conversations, I know that one of the things you feel strongly about is that most business treats this as a chess game, when in fact they should be playing it as if it were poker. Explain.

Michael Sansolo: This notion was raised in a previous article on this website by Henry Chesborough, one of our keynote speakers at MarkeTechnics this year. Henry’s point, if I can paraphrase it, is that poker players have a mentality of covering bets, knowing when to fold and accept losses, and knowing when to bet big on a good hand. Chess players, in contrast, think through a series of linked moves.

I think his point is a good one. Technology poses so many possibilities and so many options. It’s impossible to know which will be the winners and which won’t pan out. It’s the flexibility to move on despite the losses that allows some companies to find the big wins.

It’s an interesting notion. The dot com boom burned many of our companies as they tried to find ways of linking to electronic commerce. But that doesn’t mean that either dot coms or electronic commerce are bad things, simply that we haven’t found the answers yet. And somehow we have to keep having the confidence to bet on a new hand.

Of course, I’m not a very good poker player so I’m waiting to hear how Henry Chesborough personally explains this point in his Monday 8 a.m. session at the conference.

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