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So I couldn't be more thrilled to kick
this series off by inviting Mike
McNamara from Target onto the stage.
Chief Information Officer and Chief
Digital Officer of Target. Thank you.
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I've recently celebrated three years at
Target. Now, three years ago I didn't know
that much about Target, and frankly I
would have been hard-pressed to point to
Minneapolis, where I now live, on a map of
the United States. But in three years,
I've learned that Target is a huge part
of American life.
We've over 1,800 stores nationwide, and
three-quarters of Americans live within
ten miles of one of our stores. On top of
that, a whopping 85 percent of US
consumers shopped at a Target store last
year. Beyond the walls of our stores, 25
million guests each month visit Target,
either on the Target flagship app or
through target.com. Between our stores,
distribution centers, and corporate
offices, we are over 350 thousand team
members strong, and when it comes to
brand, well, a quick search of YouTube
will serve as millions of loyal
superfans enthusiastically vlogging
about their latest Target finds. America
loves Target. Yet, despite all of that
love, an outstanding team, and an enviable
store base, three years ago Target
was losing ground.
We were dangerously late on digital, and
our technology wasn't keeping pace. So
what to do? Well, as a business leader, I
see my job in two dimensions. Firstly, how
do I operate today's business as
efficiently and effectively as possible?
And secondly, how do I create the
business of tomorrow as quickly as
possible without messing up what's
already there? On the one hand, I want
productivity and stability, and on the
other, I want speed and disruption. Three
years ago, our systems weren't stable. My
first Cyber Monday at Target was a fairly
miserable affair.
Shortly after launching our Cyber Monday
offers, we began seeing contention on a
key database, and there was nothing we
could do, save throttle traffic
to the site and limp through the rest
of the day. Now as it happens, we had a
huge sales day, but we'd upset hundreds
of thousands of our customers, and we'd
left millions and tens of millions of
dollars on the table. By the time my
second Cyber Monday came around, we'd
moved target.com to the cloud, and rather
alarmingly, yet again, a key database
began to overheat. But this time was
different. This time, with the execution
of a few simple commands, we spun up a
new database on a bigger server,
transferred all the data across, and
redirected the traffic. The whole affair
lasted about 20 minutes. Our guests, our
customers, never noticed, and our sales
kept on rolling in. And that's the beauty
of cloud—it offers elasticity and
agility. Today I don't worry that much
about system stability.
I'm confident that our technology will
support the Target of today, which means
my engineering team can now focus their
energies on creating the Target of
tomorrow. Marc Andreessen famously wrote
that software is eating the world. Well,
today you can wait around until the
competitor’s software comes and gobbles up
your business, or you can create your own
future. I've long believed that the
retailers with the best technology are
going to end up in the winner's circle,
and those that don't get the
criticality of technology will be, in
retail parlance, discontinued. Today at
Target, our engineering team is agile
and it's reenergized, creating a high-
value software at a breakneck pace.
Developments that only a few short years
ago took months or even years to
complete,
we now finish in days or weeks.
Infrastructure that took weeks to
provision, we now provision in a matter
of minutes. In the past 12 months, we have
launched hundreds of new experiences for
our guests and our
team members. Here are just four examples,
but all with a common theme. Drive Up
allows our guests to shop on our mobile
app, drive to the local store, and once they
hit a geofence, a
Member of staff is alerted who brings their
order directly to their car. No need to
get the kids out of the car seats or
trudge through the aisles with a
toddler in meltdown. It's simple,
convenient, and hassle free. We've
launched Target Restock, promising
overnight delivery of all of your
household essentials. We created a mobile
app that allows our store team to place
online orders for guests from the store
aisles on the off chance that we don't
have the exact product in stock, say the
right size or color, that the customer
wants. We even piloted a ground-up rewrite
of our core supply-chain systems, which
for any retailer is the equivalent of
open-heart surgery, and in doing so, we
created an entirely new way of getting
goods to our stores. What did all of
these developments have in common?
The MVP was live in market in a matter
of weeks. Now, for someone who's been in
this business for around 25 years, that
kind of speed is simply stunning. And
every week or two, I seem to stumble upon
a proof of concept in live or a new
production system that a couple of
engineers have knocked up in a matter of
days, and while they may not all be big
things, the combined impact of all of
these innovations is quite profound.
Google Cloud underpins our speed and
innovation. It abstracts all the
complexities of the underlying
infrastructure away from the software
developers, allowing them to focus on
value creation. Compute resource is on
demand, infrastructure is just an API
call away. As I look into the
not-too-distant future, I see artificial
intelligence everywhere. Today at Target
we're using AIs
to tackle some of our thorniest problems,
like supply-chain optimization, but we're
also using AIs to solve a gazillion
everyday little problems. For example, we
sell mix-and-match swimwear online, and
we used to rely on photographers to tag
their images as being, say, a bikini top
or a bikini bottom.
Well, those photographers are arty types,
and it turns out that accurate data
entry is not high on the list of their
priorities, and the result: misery. Today,
we use a trained AI model to tag the
images and the result is joy. By the way,
Google, kudos for TensorFlow. It's kind
of magic. There's a lot of hype in the
market about cloud and AI, but if you cut
through all the marketing nonsense—the
TV advertisements, the big billboards at
the airport—there is real substance
there, and I see that substance every day
at Target. Cloud and AI are not the only
ingredients, but to make the fundamental
change like we did without cloud is
trying to make grapes—it's
more like trying to make wine without
the grapes. At Target, we're operating
today efficiently and we're creating
tomorrow with some speed and gusto. Thank
you.
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