Enterprise hits and misses - retailers get an omni-channel gut check, vendors talk macro-economy, and healthcare AI gets called out

Lead story - Retailers face tough conditions, but omni-bets are paying off

The retail economy is not for the skittish. But as earnings roll in, we're getting a picture of what's working - and what's not. The hard work of the so-called omni-channel is paying off, as Stuart notes in Retail's rough, but keep calm and carry on with omni-channel transformation - Macy's and Nordstrom show how.

The bad news: recessionary climate. No surprise - consumers are shifting. They are cutting back on spending, wary of high inflation, higher interest rates and all that lovely stuff.  Macy's "Polaris" transformation has mitigated the downside, and helped with the inventory dilemmas. Stuart quotes Macy's CEO Jeff Gannette:

The improved use of data analytics enabled the team to respond quickly and adjust our inventory flow accordingly. We ended the quarter with inventory levels up seven percent.

We continued to enhance the customer experience with investments in personalization, our digital platform and physical optimal expansion, all supported by investments in our colleagues...  Our position as a leading omni-channel retailer across the value spectrum, as well as the efficiencies we’ve built into our business through Polaris have allowed us to respond effectively to the changes in consumer shopping behaviours across income tiers, channels and categories.

Jargon overload, but the message is clear: an effective retail transformation can raise the floor. As Stuart reports, Nordstrom actually had positive earnings news: digital sales were up six percent year-on-year, contributing to an overall revenue increase of 12%,  and now comprising 38% of sales. But CEO Erik Nordstrom acknowledged: the macro-economic pressures are unavoidable. However, the omni-bets are bearing fruit:

We continue to advance our digital capabilities, working to further extend our heritage of customer service and personalization to a digital world. We are scaling our styling program and offering a range of digital services, including stylist-inspired looks, virtual style boards, and online styling appointments. While we still see the highest number of customers engaged with our in-person styling, we are seeing rapid growth within these digital services. Digital styling customers are also highly engaged, spending five times more than an average Nordstrom customer.

Superficial digital commerce plays aren't going to do it. But deeper, more substantial transformations have upside - even if the work is far from complete.

Diginomica picks - my top stories on diginomica this week

• Safety isn’t the only issue for self-driving vehicles - data privacy and algorithmic oversight need attention too - Derek
• Good vibrations - how Augury’s AI sounds like factory uptime - Chris
• The revenge of the business process expert - have process mining tools revived an underrated craft? - Jon

Vendor analysis, diginomica style. Another week, another batch of notable earnings reports. In sum: it's not pretty out there, but SaaS companies that execute well still have strong sales pipelines.

• Customers get "more measured" and Salesforce follows suit as company veteran Brian Millham steps up as COO - Stuart: "The more cautious guidance may not be something that is traditionally associated with Salesforce and will probably spook some short termists on Wall Street, but it’s a pragmatic measure."
• Box tightens its grip on the suite spot of content teamwork in FY23 Q2 results - Phil: "Growth in customer adoption of multi-product suites helps Box keep revenue on target and post its first GAAP quarter profit in FY23 Q2 results."
• Workday revenues rise as deals come under more scrutiny, but continue to close - Stuart notes that Workday didn't experience the July sales slowdown that befell many enterprise software companies did. He quotes co-CEO Chano Fernandez: "As we move through the second half of the year, we expect the environment to remain uncertain, and we see signs that in certain deal cycles, particularly some of our more strategic opportunities, there is increased scrutiny and potentially longer sales cycles as buyers do extra work before making investment decisions during these uncertain times."

Two more notable earnings reports:

• Snowflake stays warm in frosty macro environment, shares soar on solid Q2 numbers - Derek: "CEO Slootman said that Snowflake will continue to see success, despite the economic turmoil, as its platform is critical to helping its customers navigate the disruption."
• Mixed quarter for Zoom - enterprise growth solid, but revenue guidance lowered - Derek: "Zoom is doing the right thing by capitalizing on this popularity to double down on its enterprise buyers - but this structural shift takes time."

Industry disruptions and the need to respond with better data/analytics/customer "outcomes" are keeping enterprise software companies a bit ahead of the economic downturn. That said, no company is immune; hopefully cautious buying behavior doesn't turn into long term cutbacks or paralysis.

A few more vendor picks, without the quotables:

• Gainsight Pulse 2022 - Geoffrey Moore's maturity model for customer success - Phil
• Celonis secures $1 billion in additional funding as it sees opportunity to drive value for buyers during economic headwinds - Derek
• Zuora snaps up paywall start-up Zephr to push further into the media Subscription Economy - Stuart

Jon's grab bag - Madeline continues her fruitful series with What I’d say to me back then – Corel CEO Christa Quarles on why you should never hide your true self. Chris bears down on crypto crime in Crypto crime is spreading and hard to solve, says report. Barb takes a fresh look at today's enterprise buyer in Precisely to the point - Integrate pitches a new angle on demand marketing.

Finally, I blew another gasket in this love letter to AI content bots and those who have crushes on them critical trial run: Are B2B content creators threatened by AI text bots? Putting YouWrite to the test: "Yes, people who write absolutely terrible marketing copy are threatened by AI."

Best of the enterprise web

My top seven

• Google is exiting the IoT services business. Microsoft is doing the opposite - Not sure if this is a sneaky big hyperscaler story, but it's certainly an interesting one. Microsoft analyst Mary Jo Foley brings insight.
• DoorDash data breach leaves important customer details exposed - Mashable initially reported this DoorDash breach went back to Twilio SMS exploit; they have since clarified this is not the case with DoorDash. However: "Other companies affected by the Twilio hack include the authentication service Okta; messaging platform Signal; and password manager LastPass."
• What's holding machine learning back in healthcare? One newsfeed reader thought this piece was a little bland, but I personally liked the realism, versus all the hype balloons the tech press floats on AI and healthcare. Also see: Artificial intelligence was supposed to transform health care. It hasn’t.
• Most IT pros are exhausted but there's good news, too - Joe McKendrick on the complicated state of today's IT workers: "Tellingly, 66% of respondents feel that it is more difficult to become an agent of transformation than four years ago. The barriers to achieving this may sound familiar to anyone advancing through the IT ranks over the past couple of decades, but may have been amplified by increased pressure and disruption."
• Why was SAP automation the biggest topic at SAP Insider? John Appleby goes on the podcast hot seat - Podcast types may dig this audio-only rehash I recorded with Appleby, CEO Avantra. I pressed Appleby on why SAP automation is different, which raises some very interesting topics on the limitations of DevOps.
• Deepfakes for all: Uncensored AI art model prompts ethics questions - Deepfakes aren't mainstream in the enterprise yet, but we need to school up - they're going to cause all kinds of problems.

Whiffs

I'm not sure if this is a whiff or not, but it certainly presses the cultural issues of AI:

I'm looking forward to giving my UK colleagues a hard time about this one: Britons need to be ‘less squeamish’ about drinking water from sewage, says agency head. C'mon, what's there to be squeamish about? :)

This just in: AI is about to revolutionize the gaming industry.

Err, maybe not. I'm not sure this is a whiff either, but I guess living in a potato could go either way:

Count Josh Greenbaum in:

Still a few summer days left - let's do this... 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.