How to thrive in retail through the permacrisis
A guide to prioritisation and success.
One thing I have learned from my 20 years in retail is that if you are standing still, you are actually going backwards. Permacrisis is the word that best describes retail and hospitality right now and it is likely to stick around for some time to come, so we better get used to it!
A frustrating phenomenon I sometimes still see in retail is siloing. I find it confusing, as we are all supposedly serving the same customer. However, I have noticed a shift in mindset to a much more collaborative way of working across departments, and even across retailers, with recognition that we are all in this together and might need each other to cope and enrich retail.
There are some fantastic growth stories out there, but they are few and far between with the vast majority being asked to cut costs and the inevitable squabble for who should cut how much from what budget to do “their bit”.
Permacrisis is the word that best describes retail and hospitality right now and it is likely to stick around for some time.
Digital transformation is not a workstream, it is an enabler — but how do you turn a buzzword into tangible business value?
The temptation when faced with budget cuts is to just pause everything. And yes, I have seen lots of that, but I have also seen very pragmatic approaches, which represent a shift away from the old way of simply cutting costs. Instead, retailers are choosing to be smart about costs and deliver small investments that improve productivity and ultimately deliver ROI and savings.
Technology is clearly playing an ever-increasing role in streamlining business operations with thousands of products available to solve just about every business problem — but, how do you know what is worth it and what is not? Product providers will all tell you that your business needs the solution they are offering, they will try to prove the ROI, etc., and in many cases this is true, but not always!
So, how do you choose whether to buy or build while also influencing your peers and business decision-makers not to take a blanket approach to saving costs and look at things differently?
According to a recent report, 95% of companies surveyed by Accenture and Brightline believe that the Chief Transformation Officer role is critical for transformation success. This role has been growing in frequency and importance, with more board levelboard-level positions in place than ever before. The transformation leader’s role is pivotal in stopping siloing and helping companies step back and look at the business in a different way. They are highly collaborative and will deliver their own ROI (if they are any good).
Before you start throwing money into silos again in order to fix “issues”, invest in a thought partner that can offer an objective view of your current landscape. The right partner will also advise where to consolidate, reengineer, or remove applications before you start creating more technical debt. A good transformation leader will know this!
Assessing your capacity and capability to deliver digital transformation will determine your approach. Addressing point 2 will flush this out but be ruthless about which project will get priority and sign off. Strong collaboration across teams will be needed as some areas of the business may receive more investment than others.
Consider outsourcing if you can’t recruit. Contracting onshore can be flexible but expensive, whereas offshore, although cheap, may not provide thought leadership and may cost more in the long run. There are a few nearshore options to choose from that can prove both cost-effective and provide quality, flexible resources while delivering across a number of different skillsets and technologies. If you choose the right tech partner, they can also develop your teams’ capabilities.
Cloud migration — a good partner will move you to the cloud, but a great partner will do this in the most cost-effective way for you and your business.
Data strategy — this area can burn through money very quickly. I see many businesses recruiting data specialists and that is great, but without a clear data strategy in place, this could be a waste. In order to see the ROI, it’s important to get the right balance of data engineers, architects, and scientists.
Rapid app development — when proving in year benefit is the challenge, consider rapid application solutions such as low-code. This technology allows you to build quickly and efficiently and is now being widely used in retail for this reason.
Support services — umbrella support for your applications can be a cost-effective way to manage multiple support agreements and development days can be built in to ensure you are updating as you go.
Testing — outsourcing your testing capability can be flexible and convenient. Testing specialists can adapt to your needs and provide expertise, consistency, and strong governance to your processes.
This is a surprisingly common mistake that retailers make when needing to transform — they throw a load of change at stores and hope it will stick. Good business change managers can make or break your ROI. This does not have to be an additional headcount,headcount; you just need to find advocates of change and train them well — they will return their own value in landing initiatives right the first time around.
Understanding why change is needed and how it is being prioritised and delivered is critical to success in digital transformation. The likelihood is that many in the business will be doing something differently than they did before, so it is crucial they buy into it. And, as we should all know, not everyone responds to change in the same way (see point 6).
If you need help with any of the points raised in this article, Objectivity can help in all of the areas mentioned and has over 30 years’ experience in helping the retail and hospitality industry digitally transform from the smallest to the very largest engagements. We can be your trusted go-to partner to help you along the way.
We are offering a free 1-hour workshop to help get you started — click here to contact us.
To find out more about Objectivity and the services they provide to the retail industry, click here.
This article was also published in The Retailer, our quarterly online magazine providing thought-leading insights from BRC experts and Associate Members.