Retailers must get radical with technology, Searchlight Consulting
Retailers are not using technology as effectively as they could be and in some cases it is actually having a detrimental effect on their business, according to a new report from Searchlight Consulting. The study, entitled ‘Is Technology Clouding Retailers’ Vision?’, states that, instead of constantly searching for a ‘silver bullet’ which can cause them to lose focus and waste investment, retailers need to adopt a more holistic, long-term approach, as well as paying greater attention to company culture.
There is a fixation on having the latest tools and systems, believing they are essential to win customers. On the other hand, fear of projects being too complex or costly, as well as having too many different systems to choose from may be factors which prevent some companies from implementing technology effectively. And while some organisations are reluctant to relinquish their legacy systems to embrace new technologies, the need to compete in the online world is driving others to install systems that provide maximum convenience for customers whilst not always leading to benefits for the company itself.
In addition, retailers too often run their digital operations separately from the wider goals of the business rather than thinking holistically and ensuring the two work together effectively. Simon Ratcliffe, Infrastructure Director at Fat Face, says: “A lot of retailers of a certain age have legacy systems representative of when they were selling to fewer countries on fewer channels.”
Simon Burke, Non-Executive Director at The Co-operative Group and Chairman of Blue Diamond Garden Centres, claims that some retailers held back for too long before developing a strong online presence. “The new normal for retail is for businesses to recognise that investing for the medium term entails putting down money that is not going to create a return tomorrow, but will hopefully build value for shareholders, members et al later on…you need to think outside the box,” he says. The study states that technology has at times taken retailers in directions that were not right for the wider organisation, and has sometimes led to inertia allowing rivals to steal market share. There is a need for more realistic expectations and a longer-term vision, and to be business-focused rather than IT-led.
The creation of operational silos has been amplified by the arrival of e-commerce, the report claims, and this can lead to a segmentation of customers according to the channels that they use. However, consumers tend to view retailers as a single brand and often want to interact via multiple channels. ASOS is cited as an example of a company that is effectively linking its business and IT strategy; a solution for some companies may be to dispense with IT teams in the traditional sense altogether in favour of an outsourced model, as restaurant chain Cote has done.