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‘Blink and you’re lost’ – Today’s retailers must recognise the need for speed

(Image credit: Image source: Shutterstock/Maxx-Studio)

‘He who hesitates is lost’ - goes the old saying. It’s certainly the case in the retail industry today, where to blink is to give your competitors an advantage. However, when it comes to technology, many retailers are hesitating – or blinking maybe – a little too often and failing to keep up with the need for speed. 

The consensus is that they need to get their houses in order or miss out on the purchasing power of the millennial generation, estimated to be around £164 billion year on year from 2017. Seemingly blessed with an appetite for consumption rivalled by no other generation before them, this group will certainly make an impact. However, with more product choices for customers than ever, tastes and preference diverge wildly from person to person. As a result, retailers must measure the expectations of individual consumers, not a generation as whole. 

In the ‘old days’ – frighteningly seen as five or so years ago – IT changes tended to be lengthy and expensive. Today, cloud architectures enable businesses to activate and then pause various capabilities as and when they are needed and at rapid speed. Front end functionality can be integrated with less emphasis on the need to invest exhaustive time, money and effort. 

But to react this quickly will demand a change in culture. Bluntly speaking, operational models are struggling to keep up. The speed to market of new technology is starting to outpace the speed with which retail organisations can adapt to innovations. Retailers really need to recruit a certain type of ‘techie’ – one with a passion for commerce too. These hybrid stars will drive smart retail rather than technology itself. 

To illustrate this point; retailers have typically been slower than other sectors of the economy in getting chief information officers (CIOs) onto the executive board.  But now with customers becoming increasingly savvy about technology and there being little distinction between the online and offline shopping experience, the industry needs to match those it serves and meet its expectations. 

At first base, this means capturing the customer journey, analysing customer behaviour; adapting processes to match increasingly complex consumer needs and providing a consistent level of service across all channels.   

While online businesses begin to open physical stores and existing bricks and mortar retailers dedicate more floor space to collection points for orders placed online, there is a clear lag in the retailer’s ability to maintain a clear view on what technology needs to be implemented, and how this can all be managed, developed and evolved as innovation continues to gather pace. 

It’s clear that retailers want to remove as many pain points as possible from the customer journey, creating a seamless link between online and offline channels but the retailer’s own pain points must also be addressed. This goes beyond running front end technology, but into providing reliable in-store Wi-Fi, personalised offers and messaging, and emerging retail theatre innovations such as AR-based apps and AI-driven smart kiosks. 

Back office systems must also be adapted, not only to support the front-end systems, but to enable retailers to continue running the crucial technologies that the business relies on from day to day. Meanwhile, the increased level of customer-facing offerings places greater strain on the infrastructure that back office systems rely on. From stock control to point of sale systems, mobile point of sale, data collection, data storage and CRM systems, there are many vital business applications that also require updating if they are to work effectively alongside the emerging technologies. 

Without efficient and smooth-running back office operations, retailers are at great risk of losing customer trust and eroding brand loyalty, resulting from an inability to match their customers’ growing expectations. Frighteningly, retailers’ ERP systems are commonly found to be up to 14 years old, designed without consideration for the modern trading environment and requiring constant improvements to survive in their increasingly demanding roles, ultimately making them difficult to replace.   

As a result of growing consumer expectations, retail has become an on-demand service, functioning around the clock making many of the systems currently in place unfit for purpose. Retailers must consider implementing ERP systems that address these issues, or risk catastrophic system outages that are expensive to fix and also costly in terms of lost revenue. It’s no surprise that successful retailers are investing in system improvements or completely replacing legacy ERP systems. 

ERP systems have historically been seen as business focused, looking after logistics, distribution, product management and finance, but today’s systems enable retailers to make technology increasingly sales and customer-friendly, adapting to shifting customer expectations in the retail arena. Considering that the core enterprise resources that retailers actually own are stock and customer information, it simply no longer makes sense for ERP to be limited to back office technology. 

Retailers strive for effective ways to drive brand loyalty and customer retention, most often driven by delivering on their promises to cater for consumer expectations. By implementing ERP systems that integrate people and processes across different areas of the business, greater performance can be delivered in the areas of sales and customer service. At the heart of this is, of course, the use of cloud-based technologies.   

A retailer’s future success will depend in no small part on their ability to achieve a simplified, singular view of both stock and customer information, accessible for staff via wireless devices, whether a smartphone or a tablet, wherever they are on the premises. The adoption of such technology is about the retailer aligning their goals with the expectations of the consumer.   

Retailers who lack the appetite for change have already fallen by the wayside. For those that are left, it’s taking a cultural, as well as a technological shift, to maintain their position and keep up the momentum. 

Robin Coles, Microsoft Technologies Enablement Lead, HSO (opens in new tab)

Image Credit: Maxx-Studio / Shutterstock

Robin Coles is the Microsoft Technologies Enablement Lead at HSO.