In my recent blog, I discussed the words of George Buckley, the former chairman, president and CEO of 3M, who famously declared: “Every company in the world is dying.” He explained that this is due to competitive attacks, the end of life of its products and maybe even the cannibalisation of its products. He added: “The trick is knowing it, calculating how fast you are dying and then working out how much more stuff you need to put in at the top to counteract what is leaking out at the bottom. If you only focus on short-term results and not on replacing that core or expanding your capabilities, then you die.”
Anybody can point out the bad stuff so I thought I would follow-up this up and throw some ideas into the mix to see if any of these observations are relevant. But before I do, let’s look at the three main pressures being applied to retailers today.
- Weak consumer sentiment – people do not feel confident in making spending commitments.
- Intense competition – online, supermarkets and rising star specialists are shaking up the traditional high street.
- Rising costs – business rates, rents and national living wage increases.
Cloud – is it all that?
Different technology can address one or more of the points above but what does cloud bring to the table? Well, it can be a lot or it can be relatively little, depending upon how you choose to use it.
Better people than I have written articles on the merits of ‘Multi Tenant SaaS applications’ and ‘hosted private clouds’ so I will leave that be, but CIOs must be able to educate their fellow executives on all the differences and nuances while they deliver a ‘cloud-first’ strategy.
At their best, cloud solutions let you work with a ‘just add data’ approach meaning that IT departments are leaner, strategic partnerships develop to be able to call on any skills needed and IT can truly become a challenging friend to the business. Cloud as a strategy will enable a reduction in IT costs and an ability to try new things faster, whereas ‘cloud as a reaction’ (my term for a piecemeal knee-jerk decision to try the odd cloud app), in my experience, will be cost additive and will inevitably also increase the chances of ‘shadow IT’ growing.
Be a disruptor
If consumer sentiment is showing a reluctance to spend then how do you make it easier for customers to get a product into their lives? Do they need to own the product? Does the product need to be new, or could it be pre-owned? Can you mould new business offerings around the sustainability-conscious way of thinking? The best approach should be to trial new business options quickly or deploy Minimum Viable Products (MVP) to be able to feed consumer appetite quickly – and be prepared to evaluate, change and even stop these initiatives on a day to day basis.
Get more out of what you have
One of the main costs of a retail business is its staff but to help reduce costs and deploy staff to more worthwhile tasks, automation is the perfect opportunity to get rid of labour-intensive, repetitive tasks. Robotic Process Automation is becoming commonplace in finance functions, automated warehouses are reducing the need for armies of operatives, and even chatbots are making inroads into contact centres. These are initiatives where the primary function is headcount reduction but what we really should be thinking of is improving productivity.
Technology helps you to develop your staff, to manage compliance and in retail, provide them with tools to be able to serve every customer better. HR systems with e-learning capabilities enable dissemination of information and enable participation in training courses without the need for travel costs, expenses or lost time. Compliance can be reinforced, as these technologies record attendance and also the successful completion of any qualifications. I have personally used such technologies for broadcasting video messages from the CEO and other senior executives.
As we will be describing in our webinar on 19 November 2019, more and more employees say they would quit a role with a poor technology experience (70% of millennials). When working with customers, Clienteling (little black book) and Assisted Selling (guiding through the flow, and getting better technical product information), deployed onto tablet technology enables this to be at the fingertips of the store associate. Already used in many countries and many stores, KIT is a leader in this space.
Connect to an ideas factory
Even the biggest retailers realise that they cannot come up with every sparkling new idea themselves. That’s why more and more are investing in technology incubators, innovation labs and are running ‘hackathons’. Innovators and niche technology companies are great sources of new ideas that need to be given an opportunity in the commercial world.
Turning on the tap of ideas and innovation is half the battle in generating new ideas and ways of doing things – the other half is to be willing to try outside the lab. This requires a cultural change to make it part of the business evolution process, but it also can bring excitement to the Executive Board, and energy to other members of the IT function giving them opportunities in this new world.
So it’s no surprise at all – death is not inevitable (although taxes still are!) but it requires work and a technologically curious mind that can apply new ideas to business, and the ability to bring the Executive Board with you.