The Future of Retail in the Digital Age - Part Two
As I stated in Part One of The Future of Retail in the Digital Age, I wrote that there will be further parts to this ongoing story.?I did not plan to write part two so quickly after part one but I have given further thought to key questions directed at both retailers and their software “solution” providers.
Retailers ask:?How do we solve this issue?
Software companies ask: How do we sell our products & services to this retailer?
Let us examine these two questions, first from an individual perspective and then in tandem.
In reality, I sincerely believe that both questions are wrong.
1. The Retail Question - How do we solve this issue?
Yes, retailers will have many issues although the base key issues I classify as 4S;?namely stock, suppliers, staff and space.?Retailers have to get these four bases on a solid footing to be able to offer a service to customers in branches.?Add to that the detail of each, for example, Stock:?buy at a good price to be able to sell at a good margin, ensuring that the Suppliers: can deliver on time, in the right place at the right quality with continuity of service.?Staff:?who are interested in both the customer and the product who are able to serve the customer and maintain the store in an environment in which customers will shop.?Space:?have enough space to display the stock with stores positioned in prime positions and with the stock located in the correct place to maximise profits.
All of the above, my retail readers will say, “yes, we know all that” except that many of those principles are often lost.?Consider, for a moment, an organisation chart of your company.?Is the Chair of that company at the top with Directors beneath, then Managers and so on??Where is the customer??Surely the customer should be at the top with the rest of the company organisation reversed - at least in principle.?I know that “shareholder value” is very important but without the customer there is no company.?Basic, yes, but ignored, at your peril.
Now we move into the future of retail in the digital age.?Much of the hurdles?transitioning towards a digital transformation have been documented in Part One of this series.?So let us discuss the second question.
2. The Software Question - How do we sell our products & services to this retailer?
There are a plethora of software “solutions” that companies will offer to you, the retailer, with the promise of increased loyalty, better margins, quick systems development, less time spent on tasks and so on.?However, this is a minefield for the uninitiated and is still a battlefield for those supposed experienced I.T folk in your departments.?As I have mentioned in previous articles on this subject, there is a gulf between operational retailers understanding of what I.T can bring and the lack of real understanding of the Retail Value Proposition, the whole purpose of the retailer, by I.T.
For this reason, software companies have to be able to answer these questions.
All retailers have invested over the years and know, all too well, how often these systems just do not seem to keep up-to-date with the changing needs of the consumer.?The advent of personal computing followed by the expansion of the mobile ‘phone networks, have accelerated that rush to update systems, both computing and operational.?Sometimes the former will outrun the latter with dire consequences thus negating the cost of computing expenditure.
From the early days of local shopping when the store owner knew all his best customers by name, true customer loyalty has been an increasingly difficult trend to maintain.?“Loyalty” shopping cards, discounts and incentives tend to do nothing more today than create the promiscuous shopper who will look for the the best deal from whatever source without loyalty to the shop or online supplier.?However, they will still expect a great product, at the best price, delivered almost immediately, using any means of payment.?In addition, they will also expect the same great service that they might have got some years ago when store staff were trained and available to answer customer’s questions and solve any issues.
There are, of course, several excellent software companies, both global ones as well as some burgeoning ones.?Selecting a company will very much depend on what you, as the retailer, wish to achieve.?For example, as in the title of this article, you are transitioning to more of an online company with customers making purchases using a variety of means and at the same time, you believe in managing all your customers whether in-store, online or by post, it will be necessary to take a single 360° view of all that customer’s transactions.
This illustrates a key issue that is raised by this digital transition which is driven by customers who demand a seamless customer experience. In addition, shops are being re-designed as showrooms, fulfilment centres and experience hubs. The advent of online shopping also means that many new entrants, which have much lower costs than traditional retailers, are able to more rapidly innovate every step of the shopper journey. ?For these reasons, retailers of all sizes must change or be changed. Creating a seamless digital experiences, faster is one of the challenges facing I.T so it is very important to empower I.T and business teams to work closely together in order to create this seamless digital customer shopping experience.?Another key challenge is to unlock and integrate data from every system in order to deliver critical, time-sensitive projects.?Being able to integrate all relevant application software is an important piece of this jigsaw puzzle.?
My research has come up with an interesting set of applications from a company that aims to “take the donkey work out of data integration” but for the word donkey, replace it with mule, hence the name Mulesoft, a company recently acquired by Salesforce, the world’s leading CRM software company.?Their products include integration and API management (API is the acronym for Application Programming Interface, which is a software intermediary that allows two applications to talk to each other).?Integration is particularly important when building a single customer view as part of the omni-channel strategy.?The retailer will also be able to launch retail innovations faster with re-usable APIs.
As you will know, Ahold Delhaize is one of the world’s largest food retail groups, with more than 6,600 stores.?I was very interested to read one of their comments on Mulesoft that stated:?“MuleSoft is a key enabler of the new data and application integration strategy and will support a host of strategic digital initiatives ensuring our local brands are equipped to stay ahead of the competition in this fast-changing retail world.”?The key words here are staying ahead of the competition.?This has always been the challenge of any retailers and now, more than ever, with increasing sales channels, it is imperative for retailers to be able to deploy new initiatives almost instantly, with these “re-usable APIs, and to do so pro-actively rather than just respond to the competition.
One of the big issues in building an e-commerce platform is the need to connect all the backend systems for each of a retailer’s brands to the e-commerce storefront.?This can be a massive and time-consuming and expensive task.?What Mulesoft does is to sit in the middle and handle the communication back and forth rather than create point-to-point connections between all of those backend systems.?This also enables the retailer both to unlock and integrate data from any system to deliver critical, time-sensitive projects. ?
Other global companies offer a different view, such as Oracle which aims to put customers at the heart of the retail business. Oracle does have a complete set of mission-critical retail solutions, cloud services and hardware to enable insights and the agility needed to delight customers at every touchpoint.?This article is not an attempt to explain technology choices or detailed examination of technology, I leave that to others far more adept technologically.?However, from my many years’ experience working in retail, I know that most global retailers have invested heavily in Oracle applications are now able to rapidly connect these systems and access all the data using MuleSoft products. I shall be interested to learn more about how companies such as Oracle and Mulesoft, integrate together to provide great solutions for retailers.
May I conclude this missive by stating what I consider to be the obvious, but often forgotten retail principles.?Get the right stock in the right place at the right time and now, to do so by providing this service via any means with customers using many channels and at all times remember that the customer is the reason we are in business.