Retailers of 2 minds on use of digital tech

NEW YORK - Retailers had a lot on their minds during the National Retail Federation's annual conference last week: the weak economy, overseas expansion, Internet sales taxes. But for some executives, one particular image came into focus: the actor Tom Cruise.

More specifically, the character Cruise played in the 2002 sci-fi movie "Minority Report," directed by Steven Spielberg. In one scene, Cruise walks into a Gap and after a computer scans his retina, a holographic image appears and offers him a deal on clothing based on his past purchases.

"I thought that was kind of creepy," said David Jaffe, CEO of Ascena Retail Group Inc., which owns Duluth-based women's apparel store Maurices.

Conversely, David Lauren, the executive vice president of advertising and marketing for Ralph Lauren Corp., was impressed with the futuristic technology, in particular a smart window of various images and data Cruise could manipulate via sensors attached to a special glove. He liked it so much that Ralph Lauren actually created one.

"Spielberg called and asked how we built it," Lauren boasted.

In some ways, the two keynote speakers' contrasting takes on the film reflect retailers' ambivalence toward the latest gizmos and gadgets. Despite the explosive growth of mobile devices and online sales, retailers have waded only gingerly into digital technology, experts say.

Nowhere was that conflict more on display than the NRF gathering, where attendees pondered how to best integrate websites and social media into old fashioned brick and mortar stores.

According to a recent Deloitte survey of retail executives, nearly half said they are playing catch-up to competitors or taking a wait-and-see approach.

"Making the right investments in [information technology] is not a matter of money," the report said. "It is a matter of priority."

Retailing is generally a conservative business, and tech crazes over the years have come and gone to no avail. Just a few years ago, analysts predicted radio frequency identification (RFID) tags would transform the industry. But RFID, which uses radio waves to track items going in and out of stores and warehouses, proved to be too expensive and cumbersome.

Today, smartphones and tablets are the latest buzz -- and for good reason. Fueled in part by mobile devices, online holiday sales last year jumped 15 percent to $37.2 billion, according to ComScore. As traditional stores' share of overall shopping dollars continues to fall, the growing consensus among experts is that retailers have crossed some sort of technological/cultural threshold.

"E-commerce has joined the mainstream as a holiday shopping option and we can no longer think of e-commerce as an 'emerging' channel," according to a recent report from Chase Paymentech.

Take Ascena Retail. The company recently experimented with equipping its stores with iPads. The company theorized customers can purchase items not found in the stores like clothing in different sizes and colors. In the end, shoppers didn't bite.

"There were very few orders," Jaffe said. The iPads are great but expensive."

Ascena also tried interactive store windows that shoppers could touch to access information. Again, few takers.

Like many retailers, Best Buy Co. Inc., based in Richfield, monitors chatter about the consumer electronics giant on Twitter and Facebook. But the retailer has yet to figure out how to make sense of all of that information, said Mark Herzog, who oversees consumer research for Best Buy.

"We're trying to be more research-focused," Herzog said.

A better bet for retailers, Paul suggested, is to invest their cash on people. Stores today need a more skilled workforce that can promote brands and guide shoppers through this interaction between online and physical stores, she said.

"Consumers don't see the difference between the website and the store," Paul said.

Thomas Lee • 612-673-4113