Taking a modern approach to retail transformation 

Sarah-Jane Nightingale at Red Ant outlines areas that retailers must focus on when deciding the next steps to transform their businesses

  

As retailers rush to refine their operating model, adopt new tech and refine customer experience strategies to outperform competitors, there’s much to consider to ensure everything lines up for retail success. Changing customer behaviour and hyper personalisation, increased supply chain complexity, and advances in integration and cloud technology are all reshaping the industry at a rapid pace.

 

Some of the motivating factors to invest in tech might be to increase customer engagement, upgrade ageing in-store PoS, or harness data from their ecommerce system. A popular driver is to provide customers with a personalised feeling, to make them feel special.

 

However, while retailers are keen to embrace retail innovation, it appears they are lagging in their procurement approaches, where the budgeting cycles remain long and technology progress is often slow. This calls for a more modern approach to keep on top of customers’ expectations and to stay relevant in a challenging digital landscape.

 

The current challenges with retail tech procurement

The most progressive retailers have changed their budgeting cycles to quarterly chunks, with the concept behind this being to fail fast. They want to try something, see if it works, if it doesn’t – shelve it and move on to the next thing.

 

Accelerated by the pandemic, decision-making cycles have shortened, not least because retailers are worried about the recession. CIOs haven’t got the budget or the time to put something in that isn’t going to work. While some brands are implementing tech once a year there’s often a tendency to make lower investments. As a result, they’re only taking a nibble of what they could be achieving.

 

The biggest issue with current procurement strategies is that many retailers with a monolithic budget that operate in a four-year investment cycle are being held back from taking a more dynamic approach to improving data integration that’s required to deliver the customer experience shoppers expect.  And even with retailers that have per-quarter budget reviews, there’s still a hesitancy and a desire to complete one roll out before starting another which is slowing progress and change down.

 

Challenge to get data ‘in order’

With such little brand loyalty around amidst the cost-of-living crisis, retailers have one chance to impress customers and take mindshare. But the one thing that can enable personalised services is data.

 

Ensuring the data in so many different systems is ‘in order’ is essential to provide the holistic view of the customer – the fact that no matter where they purchased from and no matter how you interacted with them, you know all the information you need to know about that consumer.

 

Yet many brands haven’t got a handle on managing and integrating their data, let alone data quality, and are missing out on being able to target effectively and to get to the focus of their customer. CIOs are struggling to get data out of their huge cumbersome legacy systems and get it into a format that it’s usable by tech platforms and they can bring the customer data into the store.

 

One of the biggest challenges is that data is a grey area in terms of who owns it. Operations need it, but marketing want to know their customer is and who’s buying, while manufacturing and supply chain need to know what’s been ordered and lead times. But, if data teams can’t get this data out in an effective and accurate way to all these stakeholders, it’s simply slowing the business down.

 

Forward thinking brands realise they need to take a modern approach to embrace data and integration challenges to seriously move the needle on customer experience.

 

The need for speed and ROI

Retail transformation projects are now a more collaborative process. The long wait to co-ordinate diaries of CIOs and lead engineers has evolved into more effective meetings that ensure the right stakeholders are involved. With the CIO, IT and finance all on a call, this fast tracks to scenarios where retail tech can impact the bottom line in a limited period of time.

 

One thing decision-makers all agree on is that ROI has never been more critical. Most want to get to a minimum viable product (MVP) with enough features to attract early-adopter customers and validate a product idea in the quickest most cost-effective time. If the proposed project has not got an ROI, it’s unlikely there’s hope of it going anywhere, because there’s no reason for it. Any vanity projects that previously slipped under the radar face greater scrutiny in terms of what they’re going to deliver.

 

Retailers are looking for a high level of customisation rather than configuration which has an impact on huge implementation timelines or costs. Tier 2-3 retailers with lower budgets and in-house skills haven’t got time to invest in those huge systems that are highly customised. They want to be on something that is core, that someone isn’t regularly updating for them.

 

For this reason, they are gravitating towards solutions that are lighter-touch and are configurable, which is a base core product with options to turn items on or off, and avoids having to have everything all at once.

 

Key foundations for approaching retail transformation

Here are some key considerations for retailers exploring their next project:

1. Brands can elevate their CX through taking steps to transformation, rather than waiting for one big transformation. Asking for ROI for projects in similar types of brands gives a good idea of what is possible
2. Getting your data in order should start with a data strategy that’s shared and widely understood throughout the organisation. It’s important not to overlook the importance of data democracy - offering consumers, store associates, and managers equal access to the right data and technology  
3.  Build strong foundations for a successful partnership, including mutually agreeing vision, goals and timelines to drive success, and have a blameless culture. Look for a partner that is transparent – clear from the get-go what’s possible. Clear owners on both sides will pull together to ensure that installations are successful. Let everyone be involved – from development to digital and marketing - they’ll all have valid opinions as they all have a need for data.
4.  It’s critical to get to know customers like never before. This means how they want to engage, even doing some mystery shopping to understand the customer journey to identify friction and highlight any problem areas.
5.  Constantly evaluate to keep the project on track. A tech partner should be checking in regularly, for example a temperature check at the end of every week, which shows exactly where the project is with regards to budget, development, and delivery.

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Sarah-Jane Nightingale is Business Development Manager at Red Ant 

 

Main image courtesy of iStockPhoto.com