Real Business Value? Or is your retail tech just digital lipstick on an analogue pig?

July 31, 2019 Claranet Limited

Last year Retail Week published, Three reasons why stores need to digitise. It’s well worth a read, but this did catch our attention:

“Lift and learn solutions, self-service kiosks, POS projection, touchscreens and mirror displays all help the customer to help themselves without the need (and cost) of sales assistants. 

“Large-format visualisation using LCD and dvLED videowalls and projection help to inspire, entertain and influence shoppers, providing the all-important in-store experience.” 

That’s quite a list, even for the head office team looking to kit out its flagship store on Oxford Street. But for your managers at the out-of-town outlets in Coventry, Cleckheaton, and Carmarthen? Probably not a priority, and why would it be? As one retail CIO said to us, “We’re running a national retail business, not a circus.” 

"The most critical step is separating the technology that will drive growth, from that which will end up being just another toy in the toy box."

Time for retail tech to grow up?
The development of new technology to improve the shopping experience in-store shouldn’t be dismissed. Far from it. But perhaps the big question to ask is whether the introduction of new tech will:

  • Genuinely improve your company over the long term?

  • Give you a temporary boost but poor ROI?

  • Fail to work with existing systems?

  • Or (worse still) actually disrupt business operations?

Retail Connections explored the issue earlier this year, emphasising the importance of digital transformation in the industry but recognising the challenge of gearing up for what it called a new technologically-enabled dimension of retail:  

“It is important that retailers do not simply follow the latest trend in what’s hot. There are so many solutions available, that arguably the most critical step is separating the technology that will drive growth in the business from that which will end up being just another toy in the toy box.” 

In its recently published article on the same theme, BizTech says: 

“Many retailers… take a wait-and-see approach to new technologies, implementing them as new needs arise. It makes sense not to spend large sums on unproven solutions, but there is one area where retailers should absolutely invest with an eye on the future: IT infrastructure.” 

For BizTech, retail businesses need to make sure their infrastructure is built on:  

  • Robust networks that help retailers to process their data 

  • Hybrid Cloud and hyperconvergence to aid in data storage

  • Micro datacentres to support IT at branch locations

  • Security tools that can mitigate the damage of data breaches

  • Support solutions to help smooth IT adoption

With retailers under intense pressure to be better, quicker, slicker, cheaper, and more productive than ever before, technology clearly has an important role to play. But the question is: what technology? 

The latest and much discussed trends in augmented and virtual reality may well be a game-changer for the industry, and the same goes for smart mirrors and virtual assistants. Anything that addresses and improves customer service has to be welcomed. But what is abundantly clear is that retail companies need to get the basics right first.  

If their connectivity across the store network is slow, if website queueing systems are needed to cope with flash sales events, if customer data is compromised (the list goes on), then no end of tech wizardry will sure up the business. 

Legacy systems are a fact of life for all established businesses, and transformational change inevitably needs to be iterative rather than wholesale overnight. Nevertheless, meaningful change also needs to focus on the underlying infrastructure, not just the glamour of the shop window. As Barack Obama commented in his 2008 Presidential election: “You can put lipstick on a pig. But it’s still a pig.” 

Key takeaways:

  • The retail technology market is saturated with products and services. 

  • In a low-margin industry, retailers themselves are often hesitant to adopt until proven. 

  • The trick is knowing which tech solutions will deliver real value for the business. 

  • Getting the basic IT infrastructure right is the obvious place to start. 

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