Enterprise hits and misses – retailers need more than AI to win, Crowdstrike sparks a security debate, and big AI gets practical – diginomica

Lead story – AI isn’t the only game retailers need to master

Reading Stuart’s latest on the ups and downs of major retailers, I was struck by the integral role of technology to cope with headwinds and/or transform – but not necessarily AI. First, some good news from Target after an extended period of adversity: Digital growth on target at Target as tech investment continues. 

Why the good news? Stuart quotes CEO Brian Cornell, who credits the digital investments in Drive Up, as well as the revamped Target Circle 360 Loyalty program: 

Our digital team has done an outstanding job of enhancing our digital experience and that’s showing through in our business results. We saw high single-digit growth in our digital comps in Q2 and even faster growth in same-day services led by Drive Up and Target Circle 360, both of which grew in the low teens. Same-day services now account for more than two-thirds of our digital sales with the biggest contribution from Drive Up, which generated sales of more than $2 billion in Q2 and more than $4 billion so far this year.

Can AI help with a longstanding problem – giving store employees better information at the point of customer contact? Stuart quotes COO/CFO Michael Fiddelke: 

Earlier this year, we integrated gen AI into the handheld devices in our stores, providing our team with rapid access to best practice documentation and the ability to quickly receive straightforward responses to common questions like, how do I sign a guest up for a Target Circle card, and how do I restart the cash register in the event of a power outage? Since the full chain rollout of this new tool, our team members have leveraged the technology more than 50,000 times, giving answers in a highly efficient average chat time of less than one minute.

Things are a bit dicier over at Lowe’s Companies, where the post-pandemic DIY sector’s economic hangover continues. Stuart updates the situation in Keep on keeping on is the order of the day for Lowe’s Companies omni-channel transformation. How do retailers cope when headwinds are strong? Lowe’s is pressing ahead with omni-investments, while hammering on operational costs. Stuart quotes CEO Marvin Ellison: 

Our operating philosophy in this challenging home improvement macro environment is very straightforward: we will continue to invest in technology and innovation, we’ll offer our customers value and differentiation whenever and however they choose to shop, and we will be incredibly disciplined with our expense management.

Though I’m skeptical that the Apple Vision Pro in-store demos will amount to much, I will concede this: at least in-store, it adds up to a guided “experience” for a shopper, versus trying to talk someone who could care less about the exciting worlds awaiting them in the Metaverse to setup and strap on headgear at home, while their family looks on in amusement and consternation, wondering how the sticker shock of the Apple Vision Pro might affect their own stocking stuffers. Meanwhile, Gary adds to the retail narrative with a fresh use case: How retailer Frasers Group got set for the double-whammy of the World Cup and the Holidays.

Diginomica picks – my top stories on diginomica this week

Vendor analysis, diginomica style. Here’s my three top choices from our vendor coverage:

• Customers are seeing value from Workday AI, says CEO Carl Eschenbach – Off the back of a strong earnings report, and with Workday Rising on deck, Stuart reports on what’s driving Workday’s growth. I found Eschenbach’s quotes on AI results interesting, as they weren’t gen AI centric: “For example, a HiredScore for Talent Mobility customer saw a 40% increase in internal application rates. For one of our entertainment customers, invoice automation is driving a 70% plus increase in processing capabilities. And for another customer, our Talent Optimization product, which is one of our fastest growing SKUs, helped reduce turnover by 39%.” Also see: Phil’s Workday packages payroll integration, rolls out global payroll offering with Strada. 
• The Second Act for the Subscription Economy – total monetization becomes the goal, says Zuora CEO Tien Tzuo – Stuart on Zuora’s latest: is the subscription economy turning another corner? 
• Is SAP CX ready for the AI-driven retailer? ALDO’s CIO shares field lessons – SAP’s CX strategy has faced considerable scrutiny. But in my view, SAP Sapphire brought a noticeable shift. Is that enough for retailers grappling with AI – and customer data conundrums? Here’s my roundup, including views from ALDO CIO Matthieu Houle.

A couple more vendor picks, without the quotables:

Best of the enterprise web

My top six

• 1 in 5 top companies mention generative AI in their financial reports, but not in a good way – generative AI use cases are still emerging, but as Joe McKendrick notes, the risk profile is already a factor.
• AI companies are pivoting from creating gods to building products. Good – Over on Substack, the AI Snake Oil team looks at the obstacles to consumer-grade AI apps at scale: “When developers put AI in consumer products, people expect it to behave like software, which means that it needs to work deterministically. If your AI travel agent books vacations to the correct destination only 90% of the time, it won’t be successful. As we’ve written before, reliability limitations partly explain the failures of recent AI-based gadgets.”
• Microsoft to host security summit after CrowdStrike disaster – A wisecracking cynic could argue that a better time for this conference would have been before Crowdstrike crowdstruck, but: these discussions are surely necessary and this event should surface important debates on how deep into the kernel Microsoft will allow third parties – and what the cross-checks will be. 
• Ransomware Review: First Half of 2024 – Unit 42 does an in-depth roundup of Ransomware in 2024 so far. The news isn’t awesome: “In February, we reported a 49% increase year-over-year in alleged victims posted on ransomware leak sites. So far, in 2024, comparing the first half of 2023 to the first half of 2024, we see an even further increase of 4.3%. The higher level of activity observed in 2023 was no fluke.”
• Top takeaways from Forrester’s state of application security, 2024 – If you can tolerate Venturebeat’s adware circus, you have a really good piece by Louis Columbus in there somewhere: “The greater the push for speed, the more cracks and weaknesses in application security begin to emerge, however.”
• The Developer Crisis: Mental Health, Burnout, and Retention – Burnout is a thing, and developers, despite their passion for coding, are hardly immune. I don’t want to minimize the complex issue of mental health and well being, but surely meeting creep remains a contributing factor. 

Whiffs

I’m not sure an AI interviewer is always a whiff, but it sure opens up new ways things can go wrong in HR: 

When you are tasked with protecting the health data that biometrics depends on, should you depend on ten year old passwords? A fine isn’t enough for corner-cutting into oblivion: 

When in doubt, automate. Then, automate what you’ve automated: 

If you find an #ensw piece that qualifies for hits and misses – in a good or bad way – let me know in the comments as Clive (almost) always does. Most Enterprise hits and misses articles are selected from my curated @jonerpnewsfeed.