 Live from Madrid, Spain. It's theCUBE, covering HPE Discover Madrid 2017. Brought to you by Hewlett Packard Enterprise. Welcome back to Madrid, Spain, everybody. This is theCUBE, the leader in live tech coverage. And we're here at day two at HPE Discover Madrid. My name is Dave Vellante. And I'm with my co-host for the week, Peter Burris. Jeff Carlott is here. He's the senior director of Solutions Go to Market with system integrators at Hewlett Packard Enterprise. And Kalyan Garamela, who's the IOT manager at Deloitte. Yes, sir. Gentlemen, welcome to theCUBE. Thanks for coming on. You bet. Love to be here. It's always a great time. Yeah, so, you know, when you come on with Deloitte, we always sort of mention you guys are one of the top system integrators in the planet. You've got deep expertise in vertical industries. You guys bring the technology expertise. Last time we were talking about manufacturing. This time we're going to talk about retail. Yes. Why retail? You know, retail's in turmoil. Everybody's got an Amazon war room, you guys are going after that, helping some of your customers sort of take advantage of their physical presence, bringing in an online presence, moving to digital. Is there hope? There is hope. Retail is not dead. You know, I hear all the time about this, retail apocalypse, retail is dead. And in reality, it's not dead at all. Still 85 to 90% of purchases are being going through a brick and mortar store. The problem here, and the apocalypse will happen to those brick and mortar retailers that don't change. They don't digitize and change to the changing demands of a consumer in the way they want to purchase something. Give you an example. My son, or even myself now, I increasingly want to do things through an experience. My computer, my mobile phone, I do research. I want to understand. I want recommendations. I want personalization. I want to be catered to. I don't want to go stand in line. Well, that experience can be done, but our unique ability is taking that experience and applying it into a brick and mortar environment. Well, I got to say, I love going to Cabela's with my kid, with my wife. I mean, I can spend all day in there. Can't get that on Amazon. So Kalyan, tell us about your role at Deloitte. Obviously, you're specializing in the retail practice. What's your background? Yes. How'd you get here? So my name's Kalyan Garimella. IOT manager from Deloitte. IOT practice, based out of San Francisco. And we have been working with our partners and friends, HPE, Aruba, over the past year or so, helping them develop IOT go-to-market projects, products that we can take to market. And recently, we just working with manufacturing and the retail industry. So what's the conversation like with your customers? As I said, everybody's got an Amazon war room. They're trying to figure out, okay, how do we leverage our physical presence as an advantage? What are the conversations like with clients? With our clients, mostly, they're talking about how do we mimic our online channels? If I go to an online retailer, you know if I go open, say Amazon.com, they know exactly what item I am purchasing, where I'm going next, what, how much time I'm spending. So in order to differentiate the brick-and-mortars, in order to differentiate themselves from the fellow retailers, they have to offer that customized shopping experience in order to give a reason for the customers to come in store and make that purchase. So they're trying to look at what new technologies that we can help with, what are the some of the new processes that we can help with, and that's where most of our conversations have been going on. Yeah. So it's a really experienced problem. It is, and you talk about Cabela's. I moved into a new house, ready to buy my big lazy boy chair to watch Sunday football, and I'm not going to go online just by a chair or lazy boy. I want to touch and feel it. I want to lay it in. I want to understand. Well, that is a perfect opportunity of providing an experience that allows me to do the research, get suggestions, go into a brick-and-mortar store, try it out, then guess what? I'm getting personalized, hey, you know what? There's a nice beer stand that I can put right next to that table to be perfectly complimented, hey, here's a light that can look over. So we have that ability of actually tying together an experience, actually predicting in advance what the customer really doesn't know they want next, but they really do want it. Example, we just walked out of a client engagement. Beautiful example, client engagement. It sells high-end women's fashions, right? Dresses and shoes and accessories, everything. And he basically said, hey, we're dabbling around with RFID tags and inventory management, but we don't know what to do, right? Bingo, we now have a proven referenced architecture called the Connected Consumer. This is a preview to be announced soon, but that can allow actually that client to integrate and optimize and digitize the solution for a number of different use cases that spans a unique customer experience, in-store operations and efficiencies, and then providing insights through analytics, in-store analytics to make decisions quickly. So you've got, by using this architecture, building the solutions based with Deloitte competencies and capabilities, and HPE, Aruba technology, we can deliver that to increased top-line revenue, increased basket size, decreased inventory costs, lost inventory, and provide much greater brand loyalty to those customers. By having a nice personalized experience, they know being by name, they know what I'm looking for in advance. Beautiful solution. So the online retail world did two crucial things. One is it provided a new way of a customer to buy something, and number two, it provided a new way for the retailer to learn something about the customer. Very, very powerful. But as you said, we are still, last time I checked, physical things that move through space, that use physical senses to make decisions. Tactile, do I like the color, the experience? I mean, I remember having arguments with people about whether the Apple stores are ever going to have any impact in the world, and boy, did they prove that experience of physically being there matters. So in many respects, what we're talking about is we're talking about creating spaces that correspond to the experience that a customer wants in a way that doesn't force them into another channel. I think that is an excellent point. I think you'll hear Kirti, and Kirti talks about it, who leads our Aruba team, and they are renowned for taking a space and providing, using technology and IT and software and security to provide a total experience, an immersive experience for those that are occupying that space. But that's not how retailers used to think. What they used to think was, this is the space where I put my inventory, where I show my product, and then I'll put the catch register over here. What you guys, I presume, are trying to do is show them how they can turn that physical space into a place that can bring in the online digital elements complimented in a way that makes that store a source of differentiation. It gives that experience in the brick and mortar store and allows the comfort of, yeah, you know this. And makes it differentiated. So that someone wants to go there because that is a valuable experience in and of itself. And sadly, retailers of the past 40 years have always relied on big brand names to attract customers. If I have the best brands in the world, customers would come to me. That scenario doesn't hold true anymore. You need to give them a reason, a personalized, curated experience for them to come in. Well, not the least of which is that digital technology allows us to spin up new brands like overnight. And so there's a, it's having an erosive effect on the other side of the inventory. So tell us a little bit about where you think over the next few years that differentiated in-store experience is going to be. What is going to constitute great retail? I'll start it off. Sure, sure. First and foremost, the expectations of millennials and other generations is more of that online experience. So I think retailers of the future have to be able to provide that customized experience to be able to provide, particularly people are not waiting in line is not an option in the future, right? I mean, even you look at- Costco. That's, waiting in line is not an option. I think that ability of, you have to have more instantaneous gratification, but allowing, if you will, the personalization, I'm being covered. I think that is one expectation for those that want to sustain a business and retail in the future. Yes, and add on to that, right? I mean, the marketing managers or the store managers of the past have always relied on opinions rather than data and insights to make better business decisions. Where do I place my product? Where are my customers spending most of my time? It's just, guess, most of it was guessing. Now, there is a technology out there where we can actually monitor what's happening inside your retail store. And, thereby, you can make better business decisions to help you with your customer journeys. Put traffic. Put traffic, you know, through video analytics and the data, someone's hanging around the Nike booth or whatever, you know, trying to understand, and you can purposely point them and give them suggestions of 20% off, and so you can personalize that experience. So, we have a CIO client and that's in the retail space and the way he described it is, you got to break the whole thing down. He tested some of you guys. You have a period of, I want the experience of shopping and the example that he gave me was a bike company a number of years ago who used flexible manufacturing to collapse the time, high-end bike, to collapse the time from ordering the bike to getting the bike down to a few days and they failed because the customer liked waiting. The process of buying, reducing time, simple, straightforward, but also what they said, and this is the kind of flexibility I think we're talking about, is some people don't want to walk out of the store with the product they want to deliver to their home. So, the store is, again, not the place where the inventory is, it's the place where you experience the product and that they create an option. How would you like that? Oh, I'd like it to be delivered to my house. No problem, there you go. Is that the kind of thing that we're talking about in the future? Absolutely. We call it the unified commerce of the Omni-Night channel shopping experience. You want to give the customer all the options available. Like you said, I can buy online, ship it in-store, or I can buy in-store, get it to my house. All the different options that a customer is looking for on an online channel, which is easy and convenient, we want to do that in a brick and mortar as well. And our solution can help you do that as well. So, when you guys encounter a client that is, you know, declining same store sales, so the management is concerned about, you know, the future, it seems like it's a tired, sort of experience. And, you know, that's sort of the end of the spectrum. And you want, you know, the 2B. Yes, right. Future state. You're talking about, where do you start? So, who brings what expertise? This is actually, I'm going to repeat what I said last time. Our mantra is, first off, you got to think big, then you start small, and then you scale fast. And what I mean by that, what we mean by that is, with the Lloyd's capability, we can jointly come in and help a retailer. Let's think it through. Let's think you have how many branches looking to wear, what are your problems, what's your inventory leakage, you know, what's your current experience, what's your in-store Wi-Fi. We can build a plan on what we can do. But the next big problem that we see is not about the technologies, it's about the people and the process. How do you convince us, how do you convince some to invest to change? Well, this is through our proof of concept capabilities. We have the ability of starting small. Let's just go in and we can do through this architect's modular proven architecture, we can do a starting more. Let's just start with some RFID tags and tags and start small. We can deliver the business value and calculate that and extrapolate that out if we apply that to all your stores and scale fast. So we're making this be an on-ramp for those retailers because they're saying, what do I do? I know I need to change, but what do I do? So you do like a test store model, right? Okay, and then what? That's your POC, is it an actual? Yeah, and then so I want to go back a little bit on this whole IoT offering. It's a composite offering, right? It takes a lot of technologies coming together and a lot of SMEs, subject matter experts to come in and help you to build that whole solution. And that's where I think our solution is where it's ready to go, where all the pieces have been put together and can be easy. From day one, the time to market has been drastically reduced because of this, right? So we see a lot of value in that. So you're able to say, okay, what kind of target customer? What kind of inventory? What's the cost of it? What's the turn? Take all those business attributes and then say, we can map that back into a set of physical and system components that you can scale fast. It really comes around, three buckets. We're doing this to optimize and increase revenue, basket size, conversions, everything, time to revenue. Decrease costs, efficiencies in inventory, logistics, people, labor. And then providing a much greater experience of brand loyalty, which will also affect both costs and inventory as well. And capture and capture additional data. So for example, returns means two things. Costs, but also somebody had a problem. That's right. I'm satisfied with customers, yes. So we're out of time, but so summarize kind of where you guys are at, your solutions, when it's going to be available, you go to market, give us a sort of bumpster. Right now we're here at HB Discover. We are previewing this connected consumer architecture. We will deploy it calendar quarter one of next year. We'll be the full announcement. We have contact information. We would love to engage in clients and start that discussion now around doing proof of concepts. And we're going to be not only driving this collective retail solution that can be extrapolated into different use cases and markets, but we'll also continue to drive the more industrial internet of things and manufacturing operating around predicting maintenance, asset monitoring maintenance that we talked about in Vegas. Great, well I hope next Vegas, come back with some examples and some, a customer and we can go through sort of what impacts you've had. Maybe you'll be through a POC at that point in time. I'd love to get the cube into one of their POCs. There you go, Will. Love to do it. All right guys, thanks very much for coming on theCUBE. Thank you. Have a great seat. Thank you. Thanks, keep it right there, everybody. We'll be back with our next guest, Dave Vellante from Peter Burris. We're live from Madrid. HPE Discover 2017, right back.