By Frank Lochbaum, Managing Partner at KPS.
More than five years ago, retailers were urged to adopt new technologies to enable them to keep pace with increasingly fickle, demanding, sophisticated and connected consumers. Today, it is clear that no one realised just how fast this pace of change would be, and therefore the timetables that many retailers put in place back then are seriously out of date.
One of the biggest problems in meeting shopper expectations has been the gulf between the promises that retailers made and what they have actually been able to deliver. The root cause of this issue is the fact that most organisations are trying to provide a rapid, agile customer service with legacy systems built for a more predictable age.
Tacking 'accelerators' onto the side of existing solutions has been a contingent approach for fixing immediate problems, or overlaying new processes in the hope of reconfiguring outdated technology. But for the core business of merchandising, replenishment, supply chain, and promotions, which depends more than ever on collaboration around the needs of the consumer, this is not enough to enable innovation to match the pace in which shopper behaviour is evolving.
The only way to ensure greater flexibility and speed across the business on a long-term basis is to stop putting money into technology that is unfit for purpose, and invest in new solutions and processes that can not only keep up with the connected consumer, but offer a competitive advantage to the retailer.
By reinvigorating core processes, retailers can deliver benefits to the business; such as, reducing their stock to cash cycle, and raising revenue and profit per product category, store format, channel and customer. Moreover, introducing best practice processes will provide retailers with a platform for expansions into new channels, territories, product categories and customer groups; as and when the consumer demands it.
With the perfect balance between technology and processes, retail organisations will be empowered to deliver a service to customers, unseen and unknown today. And for many retailers, radical change is the only way to achieve this end goal.
Naturally, this level of change is daunting, but the good news for retail businesses is that the right vendor partner can optimise their complete ecosystem in a single project – without disrupting everyday business activities. Within months they will have the technology and processes to unify marketing, operations, buying and supply chain, in order to build a single strategy around the customer.
They say that the definition of insanity is doing the same thing over and over again, expecting different results. Surely enough time has passed for retailers to accept that focusing on legacy systems will not enable a quick enough change to keep up with evolving shopper behaviour. Now is the time to invest in innovation, so the retail sector can fully embrace the pace at which the connected consumer is moving.