The retail world is evolving at pace – and keeping up requires a balance of strength and flexibility.
Consumers are changing the way they shop and engage with brands, providing a healthy challenge for retailers as they plan to meet their increasing demands.
Meanwhile, the competitive environment continues to heat up. With Amazon appearing on Australia’s virtual and physical horizon, the local landscape is going to feel the impact – and it’s going to hit hard.
Jemma Parsons, director of The Strategy Group says “We are in the fastest-moving period of human progress in history – driven in large part by rapid technological change. The thinking and approaches that got us to where we are today won't solve the problems of tomorrow”, in her story Retailers must move fast to avoid Amazon trainwreck
It’s no wonder then retailers are increasingly looking for agile systems and vendors to support changes they know they’ll need to make - even if they don’t know yet what those changes are.
So what’s the best way for a retailer to remain competitive?
Ensure your processes are agile and your software and vendors are too - but don't assume this means compromising stability.
Assessing a system or vendor’s agility can be difficult, with many people making the mistake of assuming stability is the nemesis of agility.
In fact, the opposite is often true.
It’s about the power of ‘and’, says this McKinsey article, with the understanding there’s not always a trade-off between being flexible and being structured.
Striking a balance between stability and agility is more likely to achieve better results than a single focus on reliability or speed of change.
To be truly agile, organisations need to learn to be both stable and dynamic. In fact, it’s a stable organisational or product backbone which gives the ability to be dynamic.
What should you keep in mind when selecting a vendor and system to future-proof your investment?
For software, the main considerations for agility are depth and architecture.
We all know some mature systems with deep functionality are too fixed and rigid to evolve quickly. However, those based on scalable and extensible architecture provide a unique competitive advantage over newer solutions - the strong backbone which can quickly be added to or extended.
In these products, fundamental functionality and performance is solid, while modular and API-based architecture enables ‘layering’ of new functionality or integration to other systems.
McKinsey demonstrates this in a very simple product analogy: Smartphones have become ubiquitous in part because of their design and functionality. The hardware and operating system form a stable foundation. But a dynamic application layer builds in “white space” for new apps to be added, updated, modified, and deleted over time as requirements change and new capabilities develop.
When assessing a vendor's agility, consider governance and process.
A vendor with strong decision making and authority over the software’s roadmap has much greater control over the form and speed of changes, compared with those representing a product with which they have little influence over product direction.
You can expect an established vendor to have optimised processes in place, with the experience of refining them for maximum speed and resilience. A startup or new vendor who appears quick to react, may be grappling with introducing and trialling process at the same time as they are building a product.
Keep these points in mind when assessing your vendor and software requirements and your business will be fit and agile, and ready to adapt to change.
