IT services and solutions for retail and hospitality

  • 31 May 2010

Time for change because retail is changing

Alan Morris

By Alan Morris, Managing Director of Retail Assist

May 2010: As retail is changing, more now than ever before, Alan Morris advocates a new way for retailers to review how they plan their technology, to reflect and remain on the upside of market change.

As an industry, we are driven more by change than by any other factor. Retailers no longer introduce new lines solely to reflect the four main seasons. Merchandising now takes place on a continuous basis, to keep the offer fresh, relevant and customer-centric. So how should a retailer’s IT strategy accommodate and serve that constantly evolving market?

Retailers customarily manage their IT investments and infrastructure to reflect a 5-year business plan. To ensure we providers tailor our solutions to the challenges that retailers face today and will face tomorrow, I put myself in the shoes of a retail IT director. How would I decide what to include in an IT strategy today? Well, I would certainly try to build one that contained more than incremental technical upgrade and investment.

Any retail IT strategy needs to support the business’s drive to improve footfall and conversion rate. This is even more challenging in these recessionary times although, as pockets of buoyant sales reveal, people with (relatively) secure jobs are continuing to spend. Nevertheless, some good retailers are struggling and others, less sound, have been able to mask their poor performance. As with consumers, few retailers have escaped the recession without some exposure to vulnerability, somewhere.

So, looking forward to 2015, I know that my strategy must increase the closeness of IT to the business. I believe IT should take responsibility for looking at customers and their IT usage. They should ask themselves what the company stands for, what makes them exceptional and then map that into trends and IT practices that bring consumer and retailer closer.

The most obvious element – now a given – is to make sure the internet is an integrated point-of-service. But, what else would I look at, say, taking the example of a fashion retailer catering for women in their 20s and 30s? Who could I trust to predict the changes that will happen in my sector? I’d look more widely at society, including the media, and not confine myself to consulting ‘experts’ in the fields of technology and retail. Whilst a lot of IT directors set their strategies to reflect the predictions of technology visionaries, I believe they’d be better served by focusing on how their customer profile will change.

Your current customer base will grow out of your mix, your product profile. To forecast how people will buy tomorrow, look not just at today’s technologies but turn your attention to today’s 15 year olds who will be your target market in 5 years’ time. Make your judgments based upon the technologies that are embedded in the lives of the individuals who will be tomorrow’s customers. Consider the ways in which today’s teenagers communicate via social networking sites such as Facebook and Twitter; and consider the devices that they live by to obtain information and gratify their retail needs and desires, ie. mobile and intelligent ‘phones.

Retailers know they must be customer-centric but do they realise they need total visibility across their selling chain? You need to understand every customer interaction and, using the CRM functions that exist within today’s retail systems, capture and record activity across each channel. When someone buys online, for example, this needs to cascade through your business, alerting every part of it and added this record to other information available on that customer and their previous interactions.

Today’s hot topics are support for the iPhone and the Blackberry. Looking forward, mobile and ‘on the go’ computing will remain strong. Online purchasing will expand from largely home-based to taking place anywhere and at any time. Retail IT strategy for the coming years needs to cater for this in its systems design and management.

Still in the shoes of that retail IT director, I’d ponder how to integrate these new devices into my hardware ‘pool’. With potential customers walking round with significant processing power in their pockets or handbags, I’d be a fool not to use it to deliver truly individual service that could differentiate me from my competitor

Even those retailers considering themselves to be technology pioneers need to know where they will go next. When it comes to systems upgrade or acquisition, they should ask tough questions of their solutions providers. They should expect ‘roadmaps’ that chart the release of new functions and support for any new technologies, demonstrating what they will do for a retail business at a practical level. It is only then that the crystal ball marked “retail in 2015” can be looked into by all parties, and a strategy defined that will accurately reflect the future intersection of technology and customer in the retail sector.

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