Today’s customer expectations are clearly outpacing retail’s ability to deliver. It’s a serious issue, putting many retailers at risk of losing market share, seeing loyal customers drift away, and becoming irrelevant.
Due to this technological debt, instead of driving toward insights that will better serve customers, retailers are using simplistic tactics like discounting to grow sales and revenue. This surge in promotional discounting means retailers are always in sales mode, making it even more difficult to deliver growth. For example, according to research from Planet Retail, in 2015 the average percentage of sales of marked down goods in the UK has eroded retail’s contribution to the country’s economic output by more than £20.3 billion ($30bn).
Meanwhile, most retailers believe their current retail management systems lack the capacity to mitigate this loss of revenue due to irrelevant discounting. They essentially have no idea what impact it has on their ROI. So, how can retailers use their technology to deliver the brand experiences consumers expect?
There are two approaches to closing that gap. Leaders take a step back, examine their technology, shift operations to the cloud and deploy a unified platform for innovation and growth. The laggards reckon they can fix what they have by stacking the latest, best-of-breed products on top of existing, legacy systems.
Unfortunately, the latter approach only creates more complexity and cost and ignores the fundamental issue: everyone from the back office to the shop floor suffers, especially customers, when disparate systems make it difficult to piece together a single, cohesive view of the business and deliver on customer needs.
Becoming omnipotent in omni-channel
Further, retailers cannot provide omni-channel experiences with just an upgrade to their e-commerce or POS front-end systems. Retailers need to unify the foundation of their business systems to get a unified view of the customer and business. They must stop buying departmental, point solutions – integrating all these systems together is never ending, and will always soak up budget to maintain integrations.
Retailers must first focus on remediating tangled systems and inaugurating a unified approach. To achieve success in today’s competitive marketplace, retailers need to consolidate down to a single system for the backbone systems of retail: order, customer, and inventory data. This first step focuses on the heart of the business; those core processes that are essential to daily operations.
Once implemented, this back-end system can distribute accurate data to all existing and future channels, which is why it takes precedence as the first step towards achieving omni-channel success.
When a retailer has a solid and reliable system of record in place, they can then more rapidly deploy the modern systems that will seamlessly connect with any current or future channel. A unified commerce foundation enables retailers to target consumers with better, more personalized offers, recognizing their revenue from overall sales and drilling down into different sectors within the market.
Forward thinkers look to the cloud
Forward thinking retailers will look to the cloud and unified commerce platforms. Cloud offers the flexibility retailers need to quickly react to new and unforeseen challenges and deliver the retail brand experiences today’s shoppers crave.
Cloud also enables retailers to spend less time worrying about the costs and complexities associated with managing, patching and upgrading on-premise software and hardware. No longer having to deal with the frustration of version lock, cloud-enabled retailers are always on the newest software and able to offer the latest experiences to shoppers. In addition, any customizations needed to support retailer’s unique needs are automatically migrated.
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