Dirk Izzo, Senior Vice President of NCR’s Industry Solutions Group, left, and Tom Chittenden, Vice President and General Manager of NCR Retail Solutions.
NCR is a 134-year old company that isn’t acting its age. The company’s legacy hardware business is helping retailers transform the store experience but its software and services business are growing faster. The company began 2018 by moving into an ultra-modern headquarters, designed with the workforce of the future in mind, that doubles as a lab to test new technologies such as frictionless checkout. Retail Leader visited the company’s new digs adjacent to the Georgia Institute of Technology in the Midtown area of Atlanta for a conversation with Dirk Izzo, Senior Vice President of NCR’s Industry Solutions Group and Tom Chittenden, Vice President and General Manager of NCR Retail Solutions. Izzo and Chittenden weighed in on NCR’s evolution, the future of retail and what’s next for self-checkout.
Retail Leader: NCR is a well-established brand, but it has changed a lot in the past decade. What do you think the perception of the company is today and what would you like it to be?
Dirk Izzo: If you look at our history, we have reinvented ourselves several times. As it relates to retail, the impression in the market is that we are hardware company and that is an easy impression to make because you see our brand and the logo everywhere on hardware but you don’t necessarily see it on software. There are a lot of products that are NCR products that you would never know because the technology is embedded and our software is running behind the scenes. All most people see is our logo on an ATM, point of sale terminal or self checkout. We are actually not a hardware company if you look at our numbers.
RL: How so?
DI: We have a $2 billion software business and are a major provider of business services. Those are the fastest growing areas of our business and it is changing the perception of NCR from a hardware company to a software and services company. Where we are seeing a lot of growth is in the area of managed services where we have roughly 20,000 people focused on helping customers manage the increased complexity of their business.
RL: How would you like retailers to respond when asked what they think of the NCR value proposition?
DI: What I would like to see customers know us for is the Intel Inside and all the magic we bring that allows them to offer unique and compelling customer experiences. I want our customer to know us as a trusted partner, and the way we do that is through software and services enabled by hardware that keeps everything running from an edge device perspective.
RL: The world is evolving very rapidly when it comes to technology and NCR works with a number of partners and you recently entered into an agreement with Tata Consultancy Services. What was the logic behind the deal?
DI: They are an amazing organization when it comes to systems integration and engineering. Customers want integration of other capabilities and that is what their sweet spot is.
Tom Chittenden: Speed is another consideration. One of the big things retail CIOs talk about is the speed of innovation and wanting solutions they can innovate quickly to drive business value. We have a world class professional services organization that we are looking to expand and grow, but we recognize that there is a ton of business value that partners such as Tata can bring as retailers focus on delivering innovation and pulling back from the edge.
RL: What do you mean by, “pulling back from the edge?”
DI: If you think about all of our edge devices today that have intelligence on them such as the product item file, pricing and other intellectual property (IP), when a retailer wants to upgrade something all of those devices have to be touched and tested. What happens in the future is we can pull a lot of that back and put the IP in the cloud so that when you want to do an update it can happen very quickly and you don’t have to touch every device. We have 700 million transactions happening daily at the edge today so if we want to change something we don’t want to have to install software on each device.
RL: Pulling back from the edge would be more secure as well I assume.
DI: For sure. The other benefits are faster innovation, lower costs and machines that are easier to service when needed.
RL: How does this edge philosophy tie in with NCR’s view of friction elimination that has the traditional point of sale evolving to a point of service?
TC: Frictionless is in the eye of the consumer so there really isn’t one technology stack that you can call frictionless. What’s frictionless for my mom is very different than for my daughter. There are unlimited ways that consumers want to conduct commerce. Some great example of frictionless include Fast Lane Mobile which allows shoppers to scan items as they put them in the cart and Pick List Assist which leverages machine learning to accurately distinguish different type of product over time. Pick List Assist leverages computer vision to tell what type of apple a customer has or the difference between a banana and a plantain. It is about moving AI to the edge to improve the customer experience.
RL: Is there an impact on transaction size if shoppers use technology to monitor purchases in real time rather than discovering what they’ve spent at checkout?
TC: The affinity for other items increases because retailers are able to offer real time promotions and personalize them based on items shoppers are scanning.
DI: Technologies like Fast Lane Mobile give retailers the opportunity toinfluence behavior at the point of decision rather than at the point of checkout. It’s a huge opportunity for retailers to influence basket size.
RL: If retailers are concerned about how fast they are moving and NCR is a facilitator of the speed at which retailers move, how does NCR stay ahead of the curve?
TC: A real world example is the innovation day we did recently with Georgia Tech. It was the largest hackathon in the nation and we opened up our API’s (application programming interface) to 30 teams and 2,000 participants. We gave them a weekend to come up with applications we could bolt onto the platform. They came up with some very interesting things. We also sponsor the Georgia Tech Business Analytics Center and we do a lot with Georgia Tech grads and undergrads. We are also a magnet for start-ups who come to us to talk about innovation because they see us as an enabler to help them quickly gain scale.
RL: How has being in a modern new space affected workplace culture?
TC: I feel like there has been a big shift and it is noticeable when you walk around this building. You can see people working together, understanding the need and getting to the challenge quickly because we have created spaces where teams can work together in a way that promotes responsiveness and customer satisfaction.
DI: We were in more than seven buildings in Georgia and other locations worldwide, but if we just look at our new Atlanta office there has been a massive increase in employee engagement and productivity. As organizations changed in the past and introduced flexible hours and remote locations companies lost some of the benefit of water cooler talk. Being in one location has increased engagement and heightened conversations about what we are trying to get done. People also went from being email driven and having conversations that might extend over two days to resolving issues in five minutes because there is more face to face communication. We are also set up for stand ups which is an agile development process. Teams come together for quick meetings to discuss what they are working on, what needs to get done and agree on alignment every day.
RL: Let’s bring the conversation back to self-checkout. This is the 20th anniversary of NCR’s first installation and you now have more than 250,000 deployments worldwide. Talk about what you have learned over the 20 years.
TC: The biggest learning is the importance of customer interaction because if they have a problem using self-checkout the first time it can be hard to get them to use it again. So every modification and enhancement we have made over 20 years has been about increasing throughput by reducing friction to delight consumers.
RL: What problems do you think NCR will be helping people solve five years from now that you aren’t today given there is so much change going on?
DI: If you think about the dynamics of retail today, we know the pace of technology driven change is accelerating and that is going to change the way consumers react with retailers in general. I believe the center of the store will get much smaller and those categories will get shipped to our house. That is going to cause retailers to rethink their stores considerably and stores will be smaller and that will drive the technology and where we invest. The question then becomes are the stores just smaller or do retailers take stores they have today and turn them into fulfillment centers which exploit their proximity to the customer. Shopping occasions will be much more convenience based, with less friction and more prepared food. It will cause a rethinking of stores and create a consolidation of formats with many types of retailers going after the convenience trip as the center of the store is eliminated.
TC: I agree and I see convenience-oriented stores taking a bigger share of general retail in terms of fresh prepared foods and grocery items. In less than five years, I see a hyper acceleration of social interaction in how you conduct a transaction in a conversational way. Consumers want to transact how they want to transact and often that is by voice.
RL: A lot of people hold similar views about some of the forthcoming changes with the biggest difference of opinion being the pace at which some of the changes happen.