By Rob Garf & Cathy Hotka of Cathy Hotka & Associates
Cathy Hotka and Rob Garf here, checking in from parts unknown. Recently, Hotka & Associates and Demandware teamed up for a series of thought-provoking sessions with retail CIOs across the US to discuss the changing face of retail. As we recall all the great conversations, there was one prevailing theme among the more than 50 retail technology executives who participated in our networking events – the need for a single commerce platform to cost-effectively manage consumer interactions across all touch points. In this new retail reality, line-of-business executives demand a technology environment that supports the fast pace of the retail industry and their desire to move faster. It’s no longer acceptable to be burdened with the risk and cost of spinning up additional instances – and related hardware, software, licenses, infrastructure and integration – to support inevitable growth into new channels, devices and geographies.
While CIOs are setting the stage for a technology transformation where consumer-facing applications converge – notably ecommerce and store – here are other strategic opportunities that were discussed during our tour.
- Achieve channel-less commerce. Consumers don’t see channels, they only see the retail brand, and they have no patience for the artificial limitations that channel conflict imposes. One executive declared: “The customer is ahead of us on this.” One issue that technology leaders face is a lack of organizational alignment between “ecommerce” and “retail” technology groups, where a delicate balance between speed and enterprise architectural integrity is required to break down barriers.
- Apply the same analytics to in-store purchases that are used for online browsing and purchasing. With so many sophisticated analytics tools used in the online world, it’s a missed opportunity not to apply similar capabilities to the physical world. Applications, such as suggestive selling and personalized promotions, sit on top of customer intelligence to increase loyalty and conversion. Most participants agreed that they plan to select these new technologies based on innovative features and benefits rather than cost.
- Arm store associates with extensive product information and customer data so that they can become more effective brand ambassadors. With better information in the store, retailers can better align customer desires with in-store performance. They’re keenly aware that the new retail paradigm depends heavily on enhanced customer interactions.
- Cloud is here to stay. Consider the acceleration of mobility in the four walls of the store. It’s now essential and irreplaceable. Executives leverage new ways to increase bandwidth in the store, including consumer-grade wireless for transactions and backup. This is a significant and necessary undertaking for companies with thousands of highly distributed stores. Participants talked about what’s already in the cloud: time and attendance, labor scheduling, employee assessments, employment applications and office productivity. And now they’re deploying mission-critical applications such as endless aisle, clienteling and even core point-of-sale in the cloud to arm store associates with knowledge and service.
- C-level executives and board members get high marks for understanding the new retail vision and what needs to be done. As one CIO put it, “Business executives have the vision; now they need the roadmap to eliminate silos and replace expensive older technologies.” Both business and technology executives may need some help to understand the difference between on-premise CAPEX purchases and cloud OPEX arrangements. To achieve success, CIOs need CEO buy-in and a clear understanding of the new cost model, risk profiles and efficiencies of scale. One participant noted that retail ecommerce volumes vary by season, but that “you’ve got to build the church for Easter Sunday,” so retailers have a choice between maintaining capacity for Black Friday all the time or transferring those expenses and risks to their cloud ecommerce partner.
We look forward to seeing how technology vendors make these strategic opportunities real for retailers at IRCE in June!