Why “OK” is costing retailers
Many retailers do not use information technology (IT) to its fullest potential. Based on my own customer and prospect visits, there is no question that retailers are not fully exploiting big data and business intelligence to not only improve operational efficiency, but to also deliver advanced analytics, which could promote a consistent and high-quality customer experience. The reality is that the current mindset of retailers is that they are simply OK with operating the status quo in their business practices and IT systems, which for many are outdated or substandard systems. This OK mindset unfortunately does inevitably cost the retailer in terms of lost opportunities for not only operational improvement, but also higher sales and improved brand loyalty.
An optimal view
To realize the vision of omnichannel retailing, retailers need single views of customers: how they buy, what they buy, how much they buy and what promotions motivate them to do more. The ultimate goal is to advance that further and not just deliver what customers think they want, but also what they need. The easiest and most efficient way to achieve that is to operate a single system that merges all channels from e-commerce, mobile commerce, social media and store fronts to catalog orders. Unfortunately, many retailers operate a variety of different retail systems, point of sale (POS) and databases that average in age from seven to as much as 20-year-old technology. That challenge means that it is very difficult to get data warehouse and business intelligence in sync with catalog orders, brick-and-mortar store orders and e-commerce. The data simply is not reliable or consistent and any analysis can be subject to inaccuracy. Adding further to retailers’ IT challenges is the fact that most retailers’ technical architectures are unnecessarily complex. Unfortunately, that complex technology was implemented, likely at significant cost, to compensate for a lack of direction in overall IT strategy.
Look for guidance
So what’s keeping retailers from replacing their legacy systems with new technology or upgrading their current systems so all their applications and technology are integrated seamlessly to deliver that 360-degree view of the customer? Cost and the fear of failure in implementing any new technology seem to be the main factors. That is where technology providers, consultants and resellers can play a high-profile role in guiding retailers through the all-important cost-benefit analysis. Consultants can provide retailers valuable advice, guide them on specific strategies meeting the unique needs of the business and then lay out the road map of various programs to meet those objectives. Through this collaboration, retailers can shed their protracted OK mindset and focus on fully exploiting the opportunities for improvement.
While there is a significant investment in any new technology implementation, settling for OK and doing nothing could be even more costly in the long run for the business.