Is your point of sale system good enough for today’s omnichannel environment?
In a recent blog, we talked about how changing consumer expectations are disrupting legacy point of sale technology and shared five areas to focus on to differentiate the store customer experience.
If you want to ensure your next retail platform will grow and evolve alongside your needs, here we look at the challenges retailers experience when making the shift to a new POS, and the important tests the new tech needs to pass.
For many omnichannel retailers, the rise of online shopping has set higher expectations for in-store experiences.
Physical stores now play a key role in driving demand and profitability - even when the final purchase happens online.
Shoppers today view their online and in-store interactions as part of a unified buying journey, not separate channels. And by speeding up delivery, increasing share of wallet, and providing hands-on product experiences, stores are enhancing and differentiating the overall customer journey.
Yet, a significant challenge persists: many retailers find that their outdated point of sale systems are unable to meet the needs of today’s omnichannel shoppers, especially with the ‘phygital’ experiences that tech-savvy consumers now expect.
And making the shift to a new point of sale is complicated:
Many retailers defer upgrades because of concerns about potential disruption to current operations, the resources required for successful implementation and the task of staff training.
Compatibility issues with existing and future systems can make the transition to a modern POS seem a daunting task.
This can be amplified by a fear of not achieving the anticipated return on investment, especially if they’ve previously been burned by failed tech projects.
In the past, retailers who got behind on their store technology investments frequently focused on catching up to current standards. However, now the focus is on future proofing – choosing platforms that speed up innovation, with the flexibility to change direction as opportunities develop, competitors act and customer expectations evolve.
You don’t want a project that fails to deliver the desired returns because the wrong product was selected.
So at a time when point of sale software is undergoing a surge of disruption, innovation and investment, how do you select the right system for your business requirements?
Here are the 7 tests a point of sale purchase must pass, with the first being the most crucial of all:
Test 1. Can it be rapidly implemented and deployed?
The number one priority for most of the retailers we speak with is speed of deployment.
The complexity of upgrading legacy POS infrastructures can present significant operational challenges. This means you need a platform built on a modern architecture, with all your core requirements out-of-the-box plus the ability to customise and easily add new functionality.
When you choose a partner with a mature platform, they can focus on delivering innovation because the core functionality you need already exists.
Check the provider has recent and proven success planning, implementing and managing complex, large-scale deployments across multiple stores, multiple formats and multiple geographies. They’ll need to understand your fast-paced, data-intensive environment where any significant level of downtime is unacceptable. And their people will need the capability to help you plan and implement your projects so that they work for you now and into the future.
Our client GAS took only 10 weeks to rollout Infinity across 127 stores – a masterclass in POS deployment. GAS now has a modern retail system that supports its retailers to provide great customer experiences and drive growth.
“That is what Infinity point of sale system is able to deliver to us, a system which is fast, reliable, secure and on a modern architecture and platform.”
Nahid Ali, GAS General Manager
Test 2. Will it support your unified commerce business model?
Today, the store is mission control for a seamless omnichannel customer experience, making the POS the anchor for unified commerce.
That means you’ll want a point of sale system that will not only work with your existing systems, but also provide an end-to-end solution for a unified commerce business model.
The POS needs to be the hub for unified experiences spanning endless aisle, click and collect, store fulfilment, pricing and promotions, clienteling and loyalty, as well as functions that allow customers to search, transact, acquire and consume products across all your channels.
You don’t want to be tied to a point player that can only provide portions.
“The reason unified commerce resonated with me is that it would give us one core platform do the heavy lifting and a single source of truth to manage the customer data, inventory and order orchestration, rather than relying on too many systems to push and pull data everywhere.”
Shane Lenton, previously Cue’s Chief Information and Digital Officer
Test 3. Will the system work offline?
No matter how exceptional your retail customer experience is, it becomes irrelevant if you're unable to complete a sale.
When inevitable network outages happen, you need to trust that your POS will keep all your stores operational without any disruption.
When implemented correctly, the offline POS experience should be so seamless that your staff may not even realise the system is offline.
Though some features may be limited, it's essential to know what transactions can still be processed during the loss of connectivity. For example, the system should handle card and cash payments, process returns, capture customer data and link it to profiles, and continue scanning products for smooth checkouts.
Test 4. Can it grow with you, and adapt to change?
Whether you're expanding into new locations or launching pop-up stores, it's crucial to ensure your POS system can scale quickly and adapt to changes in customer expectations. While it might seem obvious, scalability can easily be overlooked in the excitement of cutting-edge technology.
Your growth plans should account for how your physical stores can complement your online presence - not just to drive online sales but also to strengthen customer loyalty. Your POS solution must be able to function anywhere your ecommerce platform can.
POS adaptability means having a system that can quickly adjust to evolving customer preferences. It should operate seamlessly across tablets, phones and fixed tills, allowing transactions to flow between devices effortlessly. This flexibility not only opens up possibilities for innovative store layouts and experiences but also provides the practical benefit of better backup strategies for your devices.
Your partner should let third party solutions connect via APIs so that you are free to focus your development efforts on the front-end. You can be more agile and create a community of third-party apps and systems that work together in an ecosystem. As a result, you’ll reduce integration and maintenance overheads, increase real-time accuracy and enjoy virtually limitless scalability and agility.
Test 5. Does it have an intuitive UX for a better EX?
Today, any innovation within the store must minimise friction for store teams because this directly contributes to delivering a superior customer experience. The focus is now on speed and simplicity to maximise staff productivity, no matter where they are in the store.
An easy to use UX and straightforward setup will enable new employees to quickly learn the system and begin selling almost right away. By removing the frustrations caused by complex technology, you'll also help lower staff turnover.
In addition, many retailers run multiple systems within stores, forcing their teams to juggle between different apps and screens as they serve customers. By consolidating store technology onto a single POS-based retail system, your teams can do everything in a single view, from sales transactions, customer loyalty, pricing, product and promotions through to virtual appointments and endless aisle access to stock.
Test 6. Will it make complex sales simple?
For enterprise retailers with multiple brands, B2B operations or franchises, you’ll need a POS system that makes complex sales simple.
You’ll want to control everything from either head office or at store level to set pricing and promotion rules, permissions, return and refund validation, discounting and cash management.
And ensure it supports complex sales like charge-to-account, quote management by channel, debtor management, loyalty and all types of pricing, including retail, trade, contract, promotional, project, customer-specific and rules based.
“Infinity is one of the few platforms able to accommodate our diverse business model, with both retail and wholesale customers requiring multiple volume breaks and bulk purchasing. And Infinity’s New Zealand presence gives us an out-of-the box solution with local capabilities that can be customised to our requirements.”
Amanda Thompson, General Manager of Moore Wilson’s
Test 7. Can you rely on the vendor for new functionality and ongoing support?
Working with the right people and processes will make the roll-out of your new point of sale much easier and deliver results much faster.
A local partner means you’ll have direct access to second and third level support, with direct engagement with people on the ground committed to your success (and not distracted by offshore business activity).
It means you can have more influence on the product roadmap, with fewer layers of bureaucracy giving them more agility and responsiveness. And a mid-size partner is more likely to view you as an important customer of influence.
Louise Mitchell, NPD’s Senior Category Manager
Want help to modernise your point of sale?
As you transform your customer experience to deliver the seamless and personalised buying journeys your customers crave, your point of sale system must transform as well. If you’re looking for help to shape your strategy and extend your omnichannel capabilities, get in touch. We’d love to help you develop the solutions you need now and guide you to where you’re headed next.
For more on how a move to a unified commerce strategy gives you the flexibility and agility you need to keep in step with consumers’ changing needs, download our ebook:
6 omnichannel retail painpoints unified commerce solves
With rising customer expectations for a cohesive and consistent shopping experience, many retailers have hit a wall because their omnichannel efforts can’t meet today’s retail demands. Here Kelly Brown describes six major challenges you will face in omnichannel retail, and how to solve them.
Customers today are delightfully unreasonable, and expect to transact when, where and however they want. They don’t care how you achieve it and will reward you if you have it - or shop elsewhere if you don’t.
Retailers are responding by building a customer-centric approach to retail, using technology and experiences to enhance the brand, drive sales and grow loyalty.
However, it’s complicated.
Many omnichannel retail solutions can look smooth on the surface but have rough patches underneath. They include legacy solutions that are no longer fit for purpose, and channels operating in functional silos. Things can easily unravel.
And when 75% of retailers are unable to connect their online and in-store transaction data, most struggle to create a unified user experience that traverses easily between online and offline channels.
If you’re looking at how to keep pace with changing customer expectations, here are the most common challenges retailers face as they build their omnichannel systems, and how they can be remedied with a unified commerce approach.
Inventory that isn’t real time
Managing inventory is a retailer’s biggest challenge — no matter their size. It’s also the biggest cost. Many retailers launched digital commerce channels without getting their inventory right and can only access rudimentary sales and inventory positions. That prevents them from offering the ‘buy anywhere, fulfil anywhere’ options that are best for customers and most profitable for them.
The solution: Optimise inventory and availability
One of the most compelling benefits of unified commerce is a single view of stock across all stores and DCs. This means you can quickly see where inventory is and therefore the fastest place to fulfil from. You’ll improve inventory accuracy, reduce stock requirements, minimise fulfilment costs and get products to customers faster. And you’ll increase sales by using ranging and fulfilment capabilities that enable you to sell products across channels (and even sell products not normally stocked within any channels).
Blending physical and digital experiences
Services such as click-and-collect, ship-from-store, find-in-store and returns anywhere are all just table stakes today. Many retailers implemented quick-fixes to swiftly get new capabilities up-and-running, but now need a long-term unified solution to connect backend systems and deliver the omnichannel experiences customers expect.
The solution: Create relevant and agile experiences
With a unified inventory you can increase your purchasing, ordering and fulfilment options to provide customers with frictionless experiences and access to your entire range from any location. A single platform gives everyone across channels and stores the ability to view all customer touchpoints in real time. And you can extend your range across more sales channels such as in-store kiosks, shoppable screens, pop-up stores, concessions and mobile devices.
Obtaining a single view of the customer
Today consumers don’t think in terms of channels. They now expect a “one-brand” experience that lets them shop at any time, using any channel, from any device, at the best price. But if you’ve got siloed backend systems and processes that mean your customers must deal with inconsistencies and gaps, you simply cannot offer a seamless customer experience.
The solution: Personalise your customer experience
The ability to see each customer’s shopping preferences and purchase history across all channels is critical for building personalised shopping experiences. With a unified commerce platform providing a holistic view of your customers, you can better plan your pricing and promotion strategies and get the right offer or message to the right customer, at the right time and right place. By creating remarkable customer experiences that meet or even exceed consumer expectations, you can ensure customers return, again and again.
Integrating data silos
Retailers use multiple customer-facing and back-office systems, spanning POS, mobile apps, inventory management, ecommerce, CRM, fulfilment, finance, marketing and more. Often loosely connected with manual processes and custom integrations, these omnichannel solutions are fragile, inefficient and costly to maintain.
The solution: Lower cost of ownership
A single commerce platform gives you a leaner and more flexible architecture that reduces the need for reconciliation and manual processes to maintain and manage data and functions, and there is only one system to secure. Exposing data and functions (rather than moving and replicating them) makes integration faster and standards-based, improving efficiency, decreasing errors and increasing accuracy. Third parties can easily plug in, building the ecosystem of retail software, tools, resources and devices you can add and change to match your business needs.
Adding modern technologies and capabilities
To keep pace with consumer demands for omnichannel services, retailers need to create and deploy new apps, services and channels. However, connecting legacy systems with modern technologies requires custom integrations, and creating new brand experiences is complex, costly, time consuming and risky.
The solution: Accelerate speed to market
With a single platform, there’s less work required to plug in and implement new functions across channels, test cycles are reduced, and you’ll use development capacity more effectively. You can run experiments to test new customer experience innovations and easily move the successful experiments into enterprise-wide operations. These improvements in IT efficiency and flexibility let you launch new tools and services to meet business demands and start seeing revenue benefits faster.
Unifying employee experiences
After years of underinvestment, many retailers are playing catch-up with the employee experience. Their stores often lack the tools and systems that enable their people to deliver the relevant and personalised customer experiences that match online shopping’s price, speed and convenience.
The solution: Boost in-store productivity and sales
By arming your store staff with the right customer data and tools, combined with AI-driven recommendations, they can more easily make decisions, provide personalised upselling advice, sell inventory at any location and serve customers faster, anywhere in the store. You’ll enhance customer interactions, improve the employee experience and increase conversions.
This blog was originally published on 13 December 2022 and updated 20 May 2024
Can you keep up with your customers’ expectations?
Retailers are unifying their backend systems to create the seamless and convenient experiences customers now expect. If you’re experiencing technology challenges that prevent you from unifying your physical and digital experiences, get in touch. We’d love to help you develop the ability to create a compelling in-store experience harmonised with a digital offering for competitive advantage.
For more on how a move to a unified commerce strategy gives you the flexibility and agility you need to keep in step with consumers’ changing needs, download our ebook:
From bland to demand: 6 opportunities from increasing your IT spend
Are you confident your next tech investment will help achieve your strategic business goals by solving the challenges you face and creating new opportunities?
In recent blogs we asked if retailers were spending enough on their IT and, if not, how to make the case for increasing spend. We also shared retailer’s top spending goals for 2024 and three investment priorities.
Now we’re looking at the metrics retailers have set themselves to gauge their success in 2024, and the opportunities unleashed by increased IT spend.
Even though it’s tempting to press pause during another challenging year, the most successful companies will be those that find ways to differentiate to meet changing customer demand.
Retailers that are aggressive on growth – creating distinctive omnichannel customer experiences and expanding their product offerings, while also reducing costs over time - are the companies that will create value, meet customer needs and head off the competition.
The most progressive and driven retailers know that they need to do it quickly. But at a time when only 25% of retailers can connect their online and in-store transaction data, many retailers struggle to create a unified user experience that traverses easily between online and offline channels.
That’s why unified commerce is now firmly established as the dominant modern retail strategy, with 88% of retailers investing in unified commerce or considering doing so to unify online and store experiences and make their businesses stronger, smarter and ready for the future.
Making investments count
So how do you ensure your next investment will drive growth in a muddled economic environment?
As retailers ramp up their technology investments this year, they’ve put in place critical metrics to measure the value:
Customers at the centre: Most retailers (94%) ranked new technology as a significant driver for drawing in new customers, with 35% citing it as their main driver. The metrics they’re using this year include increasing new customers numbers (54%) and retaining existing customers (47%). The amount customers spend is also scrutinised, with retailers looking for increased sales (48%) or cost savings (48%) that can be attributed to their tech investments.
But, despite customers being at the centre of ROI metrics, nearly half of organisations invest in technology without thinking about the customer experience (48%).
Empowering employees: Employees are also at the centre of what makes technology work: 61% of retailers ranked well-prepared and well-informed staff equipped with new technologies as the most important factor for a successful in-store experience.
However, more than 2 in 5 (41%) do not seek or consider employee input for these same technology investments, despite the impact this tech will have on them and the valuable insight they have into how it affects customers.
Demanding more from partners: As they put the pressure on themselves to make tech investments count, retail execs are also putting pressure on their partners. Their top expectations of tech vendors include accessibility of solutions (50%), the ability to build long-term partnerships (48%) and ‘cutting edge’ technology (46%). Unsurprisingly, they also demand retail industry expertise (45%) and use cases for technology solutions (42%).
But 2 in 5 retailers (40%) lack in-house expertise to make the most of these new technologies.
As you build your foundation for modern retail, are you confident your next tech investment will deliver REAL value for your business?
There are six important opportunities your retail business can unleash by increasing its investment in IT:
1. Simplify technology and improve business agility
A modern infrastructure gives you a leaner and more flexible architecture to deliver greater agility, increased efficiency, more control and cost savings:
Scalability: third parties can easily plug in, building the ecosystem of retail software, tools, resources and devices you can add and change to match your business needs.
Accuracy: exposing data and functions via APIs (rather than moving and replicating them) makes integration faster and standards-based, improving efficiency, decreasing errors and increasing accuracy.
Easier to maintain: a central platform reduces the need for reconciliation and manual processes to maintain and manage data and functions, and there is only one system to secure.
Reduced costs: Reduced maintenance, fewer developer hours, faster integration and scalable infrastructure decreases your overheads.
2. Meet changing customer expectations
Changing consumer preferences and rising expectations for omnichannel experiences are creating new growth opportunities. The retailers that deliver a personalised and memorable CX are best positioned for long-term growth and loyalty. With a holistic view of your customers, you can better plan your pricing and promotion strategies and get the right offer or message to the right customer, at the right time and right place. By creating remarkable customer experiences that meet or even exceed consumer expectations, customers will return again and again.
3. Accelerate speed to market
Improvements in IT efficiency and flexibility let you launch new tools and services to meet business demands and start seeing revenue benefits faster. There’s less work required to plug in and implement new functions across channels, test cycles are reduced, and you’ll use development capacity more effectively. You can run experiments to test new customer experience innovations, easily move the successful experiments into enterprise-wide operations and adapt to new market demands. You’ll innovate quicker, increase speed to market and build your competitive advantage.
4. Better data insights for relevant and agile experiences
A single, unified platform gives everyone across channels and stores the ability to view all customer touchpoints and react to potential issues in real time. With a single source of truth and powerful analytics, you can turn large amounts of data from disparate sources into insights that help you to attract and engage customers in new ways and improve your bottom line.
5. Optimise inventory and availability
With a unified retail platform that gives you a single view of stock across all locations, plus the ability to easily move it around the business, you’ll improve inventory accuracy, reduce stock requirements, minimise fulfilment costs and get products to customers faster. Your most significant benefit will be increased sales generated by ranging and fulfilment capabilities that enable you to sell products across channels (and even sell products not normally stocked within any channels). And by giving customers a range of purchasing and fulfilment options, you’ll enhance your service and increase customer satisfaction.
6. Boost employee productivity and sales
By arming your store staff with the right customer data and tools at point of sale, combined with AI-driven recommendations, they can more easily make decisions, provide personalised upselling advice, sell inventory at any location and serve customers faster, anywhere in the store. You’ll enhance customer interactions, improve the employee experience and increase conversions.
Want help to build your foundation for modern retail?
We can advise you on the key technology investments creating differentiated customer experiences and business agility. Just contact me at kelly.brown@triquestra.com or get in touch.
For insights into how a unified commerce approach gives you the flexibility and agility you need to keep in step with consumers’ changing need, download our ebook:
Real-time inventory, stores and loyalty: Where retailers are investing in 2024
Do you have a plan for technologies to invest in this year? And do you know where to focus your IT budget for maximum ROI?
In our recent blogs, we asked if retailers were spending enough on their IT and, if not, how to make the case for increasing spend.
If you’ve successfully navigated these stages to secure new budget and are now wondering where to start, here we look at retailers’ top spending goals for 2024 and the building blocks they’ve prioritised for maximum returns.
We know that retailers are increasing their investments in new tech this year, with research showing that virtually all retail execs – an incredible 99% - predict increased spend. The growth in spend is sizable, with a 10% increase on average and nearly a quarter (23%) predicting 15% or more.
When asked about their goals for their spend, most retailers (94%) ranked new technology as a significant driver for drawing in new customers, with 35% citing it as their main driver.
And while ROI has always been important, these new tech investments are being held to an even higher standard. Enterprises now rank the ability to receive ROI within 6 months their second highest consideration (after ease of implementation).
The metrics they’re using this year to gauge their success include increasing new customers numbers (54%) and retaining existing customers (47%). The amount customers spend is also scrutinised, with retailers looking for increased sales (48%) or cost savings (48%) that can be attributed to their tech investments.
So we know that retailers are significantly increasing tech investments this year to create fresh, value-added customer experiences, but where are they focusing?
There are three investment priorities in 2024:
1. End-to-end inventory transparency
48% of retailers are prioritising investments in inventory management
Inventory visibility has always been important in retail. But with the proliferation of touchpoints and channels – both online and in-store – retailers now need to see a real-time view of all their inventory, right now.
Without an accurate view of inventory, retailers are virtually guaranteed to interrupt the flow of an omnichannel shopping journey. If you don’t know the quantity of an item, where it is located, its current price nor status, you can’t offer the ‘buy anywhere, fulfil anywhere’ options that are best for customers and most profitable for you.
With the average retail inventory accuracy at only 63%, that can mean problems with a whopping 2 in 5 orders. And as the customer journey continues to evolve to meet changing consumer demands, providing a seamless omnichannel experience will only get more difficult.
The solution: Real-time inventory
A unified commerce platform gives you a single, accurate and up-to-date view of all your inventory so you can be sure that you have the right product at the right place at the right time.
That means you can quickly see where inventory is and make better decisions about what stock to order and how to make it available in your physical, mobile, online stores, DCs and call centres.
You’ll improve inventory accuracy, reduce stock requirements, minimise fulfilment costs and get products to customers faster. And you’ll increase sales by using ranging and fulfilment capabilities that enable you to sell products across channels (and even sell products not normally stocked within any channels).
2. Unleashing omnichannel experiences through stores
71% cite store operations as a top 3 driver for their tech strategy, and 44% are investing in omnichannel solutions
For most omnichannel retailers, the growth of ecommerce has meant boosting their investments in physical retail. That’s because the store is essential to creating and satisfying customer demand - even if the customer ultimately transacts online. Consumers now see both the online and offline shopping experience as part of the same buying journey and not as one versus the other.
With the ability to see, touch and feel products and assess alternatives, stores are important for marketing and customer acquisition. Store conversion rates are typically 20-40% - around ten times more than ecommerce channels (only 2.5-3%). The store remains the dominant sales channel, still generating more than 70% of sales. And while the shift towards online retail is real, physical retail is going to continue to grow at 4% year on year.
But at a time when 75% of retailers can’t connect their online and in-store transaction data, they struggle to deliver the cohesive, consistent unified experiences customers now expect.
The solution: Point of sale
As you transform your stores to be the centre of your omnichannel experience, your retail systems must transform as well. POS systems are now the anchor for unified commerce platforms that unify online and store experiences with back-end systems so you can create holistic experiences across all customer touchpoints.
That lets you create the elevated experiences customers now crave, by bringing digital convenience to stores, fulfilling orders via stores to increase profitability and delivering personalised and tactile in-store experiences.
Unified commerce is now retail’s top priority, with 88% of retailers investing in unified commerce or considering doing so to make their businesses stronger, smarter and ready for the future. Retailers who used unified commerce in 2022 saw a 7% revenue boost over those who did not.
3. Attracting, scaling and earning more from loyal customers
As inflation and cost-of-living increases put pressure on consumer spending, shoppers are becoming more discerning and deliberate, rapidly switching between brands in the search for bargains. That’s why customer retention has become an important strategy for retailers wanting to capture market share and maximise profits. Retaining customers costs less than acquiring new ones - customer acquisition costs have increased a whopping 222% in the past decade - and returning customers are more likely to spend than new customers.
As more customers opt out of being tracked, retailers also need a compelling reason for consumers to be willing to identify themselves when they approach from different channels or touchpoints.
On average, nearly two-thirds of US consumers belong to one-to-five loyalty programmes. However, most consumers use 50% or less of their memberships. So the challenge for retailers is developing engaging programmes that convert members into users and, in turn, create profitable loyalty.
The solution: Loyalty
With customer details captured and stored in single unified commerce hub, you can recognise customers consistently, wherever they shop with you. You’ll know which customers are most profitable and what their preferences are. Your store teams can view this information to offer personalised service and encourage conversion at point of sale.
Looking ahead, large retailers are learning to drive customer loyalty and growth by pooling data within an ecosystem of brands. Multiple companies are tapping into their complementary product and service offerings to develop a joint loyalty programme around a unifying customer value proposition.
Consumers will receive heightened experiential benefits in addition to faster loyalty rewards growth, more flexible redemptions and an unmatched simplicity and daily relevance. Retailers and brands will see a rise in reach and frequency of usage. They will gain access to richer, more privileged consumer data, shared infrastructure and cross-marketing opportunities.
Want help to decide which tech innovation projects to tackle first?
We can advise you on the key technology investments driving growth and customer loyalty this year. Just contact me at kelly.brown@triquestra.com or get in touch.
For insights into how a unified commerce approach gives you the flexibility and agility you need to keep in step with consumers’ changing needs, download our ebook:
Retail reboot: How to shut down budget blocks and reset your tech spend
Can you keep up with stakeholder demand for innovation projects? And is your retail business scaling up IT spend to ensure the business is stronger, smarter and ready for the future?
Last month we asked if your retail business is spending enough on IT. We shared the critical indicators that can mean you’re underspending, tips on what you should spend and when it’s the right time to ramp up.
But of course, any increase in IT spend must be paid from somewhere. In this blog, we look at what gets in the way of scaling up investments and how to make the case for increasing spend.
While retail has traditionally lagged in IT spend as a share of revenue compared to other sectors, retailers that are aggressive on growth realise they need to harness new technologies for a customer-first experience.
The shift towards technology and innovation is critical for survival, especially as the industry becomes increasingly competitive, and the gap between winners and losers widens.
Today technology is not just for “keeping the lights on”, but a crucial driver for efficiency, customer satisfaction and sustainable growth.
So what’s stopping retailers from upping their spend?
There are five challenges that prevent retailers from making the decision to adopt new technologies:
Challenge 1: Money’s tight and many priorities to juggle
Retailers often face tight budget limitations and the need to prioritise expenditures that seem crucial for immediate survival, such as inventory, rent and staffing. Plus, there's often a real temptation to take a short-term focus, with execs opting to chase quick wins instead of playing the long game with IT investments. It’s all about juggling priorities, and sometimes tech just doesn’t make it to the top of the list.
Challenge 2: Understanding the big picture and shaking off old habits
A lack of understanding or awareness about the transformative potential of IT investments is another major hurdle. Sometimes the obstacle is an organisational culture resistant to change, where IT is viewed as a mere cost centre rather than a growth enabler. Traditional mindsets and the "if it ain't broke, don’t fix it" attitude hinder the adoption of new technologies.
Challenge 3: Playing it safe and doubting the hype
Retailer hesitation towards IT spending is frequently due to risk aversion - fear of not achieving the anticipated return on investment, especially if they’ve been burned by failed tech projects in the past. This skepticism is fuelled by rapid technological changes and a market flooded with new solutions, making it difficult to tell whether the investments will achieve the touted benefits.
Challenge 4: Old systems, big headaches
The complexity of upgrading IT infrastructure, especially for retailers with established legacy systems, presents significant operational challenges. Concerns about disrupting current operations, the resources required for successful implementation, and the task of staff training deter retailers from undertaking comprehensive IT upgrades. Compatibility issues with existing and future systems can make the transition to a modern IT infrastructure seem a daunting task.
Challenge 5: Keeping up with the competition
Highly competitive market conditions force retailers to focus on immediate competitive tactics, such as price wars, often at the expense of strategic IT investments. The pressure to maintain low prices and manage operational costs can leave little resources for innovation IT spending. Plus, the emergence of new consumer needs and technology changes can be overwhelming and create a sense of inability to keep up, leading to decision paralysis.
So how do you navigate the budget blocks to start over?
Making a business case for increasing IT spend involves a mix of strategy, foresight and clear communication.
Here's how to justify the investment:
Show real ROI: Demonstrate how the investment will help achieve your strategic business goals by providing a solution to challenges you face or taking advantage of new opportunities. Illustrate the benefits it offers with concrete data and case studies. Show how a modern tech infrastructure increases revenue, reduce costs over time and enhances operational effectiveness.
Check out the competition: Highlighting what others in retail (and other sectors) are doing is a powerful motivator, especially if they're gaining a competitive edge through technology. Show how changing consumer preferences and rising expectations for speed and convenience are creating new growth opportunities, with retailers that deliver a personalised omnichannel CX best positioned for long-term growth and loyalty.
Include a roadmap, and a plan for dodging trouble: Present a clear, phased plan for how the IT investment will be rolled out. This should include timelines, milestones, budget requirements and expected outcomes. Define the risks associated with inaction, including cybersecurity vulnerabilities, operational inefficiencies, and the threat of falling behind in a rapidly evolving retail landscape. Show you know how to select the right technology that delivers the expected returns for your retail business, and that you have a plan for what to do if things go wrong.
Highlight operational savings: Detail how IT investments will streamline day-to-day operations, improve inventory management, point of sale transactions and overall productivity, while also ensuring compliance with increasing data security and privacy standards. Demonstrate the operational necessity and legal imperatives for the IT upgrade.
Showcase scalability and sustainability: Explain how investing in IT is not just a short-term expense but a step towards making the business scalable and future-proof. Modern technology means you can easily adapt and grow by staying relevant and adaptable with technological advancements.
Get everyone onboard: Be ready to address any concerns or objections. This involves understanding the perspectives of different stakeholders and directly addressing their individual concerns, using data, visual aids and storytelling to make your case compelling and relatable.
Present data-driven insights: Show how a better IT infrastructure can lead to more effective data collection and analysis, which can shift your business strategies from guesswork to smarter, data-driven decisions. You’ll have insights that allow you to predict trends, deeply understand your customers' behaviours and optimise your operations for efficiency and satisfaction.
Boost working capital and get smart with stock: Demonstrate how a modern tech infrastructure improves visibility into stock levels and sales patterns, allowing for better demand forecasting and inventory allocation, and minimising stockouts and markdowns. This optimisation leads to a reduction in tied-up capital, freeing resources for other strategic investments.
By focusing on these eight strategies, you can craft a compelling case for increasing investments in IT, showing it’s a crucial driver for efficiency, customer satisfaction and sustainable growth.
If you want to ensure your retail business accelerates innovation while lowering costs and risk, get in touch. We’d love to help you navigate the budget blocks and craft a compelling business case.
For insights into how a unified commerce approach gives you the flexibility and agility you need to keep in step with consumers’ changing needs, download our ebook:
What is unified commerce and why is it so important to retail success?
As more sales channels and touchpoints emerge, the customer journey from awareness to purchase becomes more complex. Customers want to hop between channels in one seamless interaction. They want more options and less friction.
That means retailers need a strategy that lets customers shop, buy and receive goods how, when and wherever they want.
The only way to meet demands for a truly unified experience is to move to a unified commerce approach that delivers seamless customer journeys across all channels, touchpoints and locations.
Unified commerce is the term used for a retail software platform that provides a central hub for data from every system and channel across your organisation.
It breaks down the walls between channel silos to deliver frictionless customer experiences, while reducing integration and operating costs, and increasing efficiency and accuracy.
At a time when only 25% of retailers are able to connect their online and in-store transaction data it’s gaining momentum, with 20% of retailers heavily investing in it, 32% beginning to invest and 36% considering doing so. Retailers who use unified commerce have seen a solid 7% revenue boost over those who did not. And Australian retailers can tap into a $44 billion opportunity when they connect online and in-store sales channels via unified commerce.
So what exactly is unified commerce?
Unified commerce is a retail management system that unifies all your customer and inventory data on one open, centralised commerce platform that exposes one version of truth to all channels.
That means all your data stays in sync – across point of sale, websites, apps, call centres, field staff, DCs and warehouses, kiosks, pop-up stores, concessions and marketplaces – and transactions can be viewed in near real time.
With all these customer touch points connected, unified commerce lets you deliver a holistic and personalised customer experience more consistently. You can make purchasing online and in-stores more seamless and convenient through endless aisle, digital payments and ‘buy anywhere, fulfil anywhere’ services. And you can treat each customer as the individual they are – one person with one account, interacting with one unified brand.
A unified commerce platform also helps you and your technology partners innovate quickly, maximise margin and deploy new services – efficiently and profitably.
Here’s how unified commerce helps you retail better
Optimise inventory and availability
When you have an accurate, real-time view of your inventory, you can quickly see where inventory is and therefore the fastest place to fulfil from. You can increase sales by using ranging and fulfilment capabilities that enable you to sell products across channels (and even sell products not normally stocked within any channels). You’ll improve inventory accuracy, reduce stock requirements, minimise fulfilment costs and get products to customers faster.
Fulfil orders the way customers want
With a ‘buy anywhere, fulfil anywhere’ strategy and centralised unified commerce platform, you can give customers and staff real-time visibility of inventory, order and customer data across the business. That means you can offer a range of fulfilment options like click-and-collect, ship-from-store and split shipments – whatever suits your customers best.
Attract, scale and retain loyal customers
You can capture customer details for your loyalty program via any channel and then analyse purchase and browsing histories to develop the personalised experiences customers now expect, with rewards and offers that are timely and relevant. Store and call centre employees can also see this information to offer tailored services and encourage conversions at the point of sale.
Localise pricing and promotions
Pricing is shared across channels so customers can trust that they’ll see the same price whether they shop with you in-store or online. You can make better decisions about store product assortments, by matching breadth and depth to demand, trends and local demographics. And by customising products, prices and promotions nationally, regionally and even by individual sites, you’ll increase conversions and maximise profits.
React smarter and faster to demand changes
Using APIs on an open platform, you can expose data in real time, rather than replicate or move it. That lets you add specialised functionality across various systems and provides a fast and easy way to plug in and deploy new services, channels and devices. You’ll innovate quicker, increase speed to market and build your competitive advantage.
This blog was originally published on 13 January 2020 and updated 2 February 2024
If you’re experiencing technology challenges that prevent you from unifying your sales, service and marketing channels, get in touch. We’d love to help you develop the ability to create unified retail experiences for competitive advantage.
For more on how a move to a unified commerce strategy gives you the flexibility and agility you need to keep in step with consumers’ changing needs, download our ebook:
Low tech, high risk: 8 signs your retail business is underinvesting in IT
Are retailers spending enough on their IT?
As we all know, retailers traditionally have spent less on IT compared to other industries and enterprises of a similar size.
In the past, it was for good reason.
Other sectors like finance and healthcare rely heavily on technology for their core operations and risk management. Banks need top-notch IT for secure transactions, while healthcare relies on IT for patient records and life-saving equipment.
Retail, on the other hand, focused more on physical store operations and customer service, where IT played less of a central role. Retailers didn't face the same level of regulatory pressures as other industries with strict data security and privacy requirements, nor did it handle much sensitive customer data.
Retail is also a volume-driven and highly competitive sector with significant operational costs and price sensitivity, and slimmer margins compared to other sectors. This leaves less room for significant IT investments, especially when measured against competing demands from inventory, store rents and staffing.
And retailers were often slow to adopt new technologies because they didn’t yield high returns. Business changes were more gradual and often driven by consumer trends rather than technology.
So what has changed?
It was only with the advent of new technologies like mobile apps, ecommerce and digital marketing that IT become a game-changer in retail.
Retailers learned to be agile and invest in technology for competitive advantage during the pandemic and are starting to embrace that agility as new technologies like generative AI become mainstream.
Now retailers are focussed on finding the right systems and partners to rebuild their business from the bottom up. They’re building a customer-centric approach to retail using technology and experiences to enhance the brand, drive sales and grow loyalty.
The most forward-thinking and ambitious retailers know that they need to do it quickly. Nearly one in five retailers have posted negative economic profit since 2015. And while the retail sector has created value over that time, the gap between winners and losers is widening, with the top 10% of publicly traded retailers now accounting for 70% of the sector’s economic profit.
Retailers that are aggressive on growth - creating distinctive omnichannel customer experiences and expanding the breadth of their product offerings, while also resetting their cost base - are the companies that will create value, meet customer needs and head off competition.
And that means retailers are now as dependent on technology as other industries for their survival.
How much should retailers spend on IT?
The simple answer is it depends. There’s no one-size-fits-all solution and the right number depends on a retailer’s specific circumstances. It can vary greatly by retail category, company size and growth stage.
Our anecdotal experience suggests that most retailers spend only 1-3% of their revenue on IT, although one study found that retail and ecommerce IT spend was 10% share of company revenue in 2023 (up from 7% in 2022).
This is still low compared to other industries such as software, tech hosting and financial services, which dedicate 19%, 16% and 15% of revenues respectively.
These industries, of course, have different business models with significant investments in R&D. We’re not suggesting retailers need to invest at these levels, but they do need to scale their IT spend for opportunities that make their businesses stronger, smarter and ready for the future.
What are the problems retailers experience when they underspend?
There are 8 indicators that can mean it’s time to assess your level of IT spend:
1. Things just don’t work smoothly
Retailers who don't spend enough on their IT infrastructure may face hardware malfunctions, software crashes and other technical issues that disrupt business operations and negatively impact customer experience. Legacy systems can be less efficient, more vulnerable to security breaches and don’t integrate well with newer technologies.
2. Customers are frustrated
Today’s consumers expect a seamless shopping experience, whether online or in-store. Inadequate IT infrastructure can result in slow service, unavailability of products, discrepancies in pricing and a disjointed omnichannel experience, all of which lead to disappointment and frustration, a lack of trust and even a sense that your organisation is dysfunctional and incompetent.
3. Growing pains
Retailers with outdated or poor IT systems may find it difficult to scale their operations effectively. As the business grows, systems can become a barrier, hindering expansion and adaptation to new market demands.
4. Data, what data?
The inability to collect, analyse and act on data due to poor IT infrastructure can leave a retailer behind in understanding market trends, consumer behaviour and inventory needs. That means missing out on insights that could drive business growth and operational efficiency.
5. Security, what security?
Inadequate security measures and a lack of robust data privacy protocols are signs of underspending. Retailers need to invest in IT to protect customer data and comply with privacy laws. Failure to do so can lead to data breaches, legal issues and a loss of customer trust.
6. Compliance and regulatory challenges
Retailers are subject to various regulations, including those related to data protection and privacy. Insufficient IT investment can lead to non-compliance with these regulations, resulting in fines and damage to the company’s reputation.
7. Employees aren’t happy
Working with outdated systems can be frustrating for employees, leading to decreased morale, lower productivity and higher turnover rates.
8. Sales decline
With all these issues, sales and profitability can dip. Customers may choose competitors with better service and technology, and the retailer may incur additional costs due to inefficiencies and security breaches.
When is it time to increase your IT spend?
If your retail business is focused on any of the following goals, you’ll want to increase your IT spend as a percentage of revenue, at least in the short term:
Transforming into digital-first business: Retailers are implementing omnichannel strategies to make shopping a fast, easy and compelling omnichannel experience with personalised products, prices and promotions pre, during and post their purchases, plus fast and frictionless on-demand delivery options.
Meeting changing customer expectations: Changing consumer preferences and rising expectations for speed and convenience are creating new growth opportunities. The retailers that deliver a personalised and memorable CX are best positioned for long-term growth and loyalty.
Developing new business models: Retail leaders are improving and expanding their traditional products and services and launching in new, but related, market segments. Technology is blurring industry lines and allowing different operators – including retailers – to move into services such as media, healthcare, finances, travel and entertainment.
Improving operational efficiency: With increasing costs, pressure on consumer spending and the cost of doing business on the rise, there will be more consolidation and business failures. Retailers recognise that investing in technology now will lead to long-term cost savings, even if it means a higher short-term spend. It’s about making things run smoother and more efficiently, which cuts costs down the road.
Want help to find the right systems to build your unified commerce business model?
We can help you build a foundation for operational efficiency and continuous, innovative growth. Just contact me at kelly.brown@triquestra.com or get in touch.
For insights into how a unified commerce approach gives you the flexibility and agility you need to keep in step with consumers’ changing needs, download our ebook:
Stock smart: How to elevate the omnichannel CX with real-time inventory
Is your inventory visibility good enough for today’s omnichannel retail?
Inventory visibility has always been important in retail. But with the proliferation of touchpoints and channels – both online and in-store – retailers now need to see a real-time view of all their inventory, right now.
If you don’t know the quantity of an item, where it is located, its current price nor status, you can’t offer the ‘buy anywhere, fulfil anywhere’ options that are best for customers and most profitable for you.
With the average retail inventory accuracy at a low 63%, that can mean problems with a whopping 2 in 5 orders. And as the customer journey continues to evolve to meet changing consumer demands, providing a seamless omnichannel experience will only get more difficult.
The challenge of inventory visibility
After the stock shortages of 2020 and 2021, many retailers have spent the past year or more cleaning up excess inventory as steep inflation forced consumers to cut their spending.
While understocks lead to the opportunity cost of lost sales and dissatisfied customers, overstocks came with the financial costs of storage and financing. Excess inventory also ties up working capital, results in markdowns that can hurt your margins and, perhaps most importantly, means the loss of new products and innovations that can give you a competitive edge.
Without a real-time view of inventory, retailers are virtually guaranteed to interrupt the flow of an omnichannel shopping journey.
Overselling can occur when products ordered online are not in stock. That results in cancelled orders, fewer sales and frustrated customers.
Underselling happens when safety stock levels have been set too high to protect customers from cancelled orders, or when buffers are put on inventory to make it available for click-and-collect. But taking an item off the website when you really have it available elsewhere means you’re disappointing customers and missing sales.
Rejected orders can result when online orders are routed to a fulfilment location that doesn’t hold the items and the order must be rerouted to a new location. This results in delayed deliveries and more unhappy customers.
These challenges affect a customer’s confidence in your omnichannel offering and drive new shopping behaviours. Customers don’t just use click-and-collect because it’s convenient - they’re using it to ensure the inventory indicated online as in stock will definitely be there when they walk into the store.
And poor inventory visibility doesn’t just result in botched sales and increased costs. Store and call centre employees have to deal with all the problems that rise, including upset customers, misplaced products and inaccuracies across different systems. That means inventory inconsistencies not only churn customers – they also churn staff.
What causes inaccurate inventory data?
The problem with inventory visibility is typically down to four underlying challenges:
Using ERP or in-house systems to manage inventory
Retailers often use ERP systems and homegrown software which aren’t built to provide accurate, real-time inventory data. ERP systems are designed to process financial transactions but can’t handle the volume and speed of stock availability checks from digital sales channels. Nor were they designed to consume updates from point-of-sale systems in near real-time. Many retailers end up pouring money and resources into fixing problems that didn’t need to happen in the first place.
Connecting legacy systems
Enterprise retailers have to spin up new channels and touchpoints as customers demand them. But legacy or outdated systems weren’t designed to send and receive real-time data. Delayed or incomplete product availability and pricing across various channels results in inaccuracies, and means the data is always stale.
Integrating data silos
Retailers use multiple customer-facing and back-office systems, spanning POS, pricing & promotions, order management, fulfilment, inventory management, mobile apps, ecommerce, loyalty, CRM, finance, marketing and more. Often loosely connected with manual processes and custom integrations, these omnichannel solutions are fragile, inefficient and costly to maintain. When data isn’t centralised, retailers can only access rudimentary sales, stock, pricing and promotions data and can’t build unified views of their customers.
Resorting to quick fixes, not long-term innovation
When problems emerge with inventory visibility, some retailers resort to quick fixes and point solutions to get capabilities up-and-running, instead of tackling the underlying problems with existing systems. And by diverting resources and budget into short-term solutions, they neglect to create the innovations that can differentiate the CX.
3 steps to take towards real-time inventory
When the cost overruns outweigh the expected gains – higher customer satisfaction, increased revenue and better margins - it’s time to invest in new technology and process improvements.
A unified commerce platform will provide an accurate, real-time view of all your inventory and customer data across stores, DCs and digital channels. This means you can quickly see where inventory is and therefore the fastest place to fulfil from. You’ll improve inventory accuracy, reduce stock requirements, minimise fulfilment costs and get products to customers faster. And you’ll increase sales by using ranging and fulfilment capabilities that enable you to sell products across channels (and even sell products not normally stocked within any channels).
There are three steps to take as you start the process of solving inventory pain points:
1. Plan your journey over the next decade
Your investment in a new retail system that meets your inventory visibility needs is a significant undertaking with huge returns that requires a strong business case. That means starting with a vision for the business in 5-10 years from now.
Assess where you can improve and expand your traditional products and services, and where you can launch into new market segments or introduce new business lines. Plan how the business model will be disrupted and the new skills and capabilities you will need to compete with unfamiliar competitors.
Use these insights to develop a deep understanding of customers and their shopping preferences and figure out what you need from a new retail system to create that single view of customers and inventory for a truly unified CX.
2. Bridge the gap between stores and back office
Customer today expect a harmonised shopping experience for every shopping journey. That means your stores, departments, systems and channels can’t run in parallel to each other. The entire organisation must align on the value of a seamless customer experience.
To get your stores and enterprise on the same page, form a cross-functional team representing various departments and stakeholders across the business. Consult these key individuals about their needs and pain points and agree clear goals for the transition, such as reducing stockouts, improving data accuracy or enhancing order fulfilment.
3. Get the CFO’s buy-in . . . and allocate budget
Your CFO can be the most important stakeholder in the move to a new solution. Getting their buy-in and endorsement means assessing how the investment helps to deliver cost savings and real value over its entire lifespan.
Create a budget by calculating how much the system will cost in terms of licenses, implementation, training and maintenance. Then compare these costs to the benefits you expect to see from an accurate enterprise-wide view of inventory, including tangible and intangible returns, such as cost savings, increased revenue, improved decision-making, enhanced scalability or competitive advantage.
A cost-benefit analysis should show with absolute clarity how a new system can deliver a positive ROI.
Want help to achieve deliver a successful omnichannel CX?
If you’re struggling with inventory accuracy and are looking at how to build a foundation for a seamless customer experiences, talk to us about how to start with a real-time view of inventory.
For more on how a move to a unified commerce strategy gives you the flexibility and agility you need to keep in step with consumers’ changing needs, download our new ebook:
What’s the difference between unified commerce and omnichannel?
In recent years, the terms ‘unified commerce’ and ‘omnichannel’ have reached buzzword status. Both are used to describe the delivery of seamless customer experiences across physical and digital channels.
But while they’re used interchangeably, there’s a significant difference between them.
Unified commerce is the next-generation architecture that finally delivers on what omnichannel promised.
A unified commerce platform provides a central hub that breaks down the silos between channels to deliver truly seamless experiences, while also solving omnichannel’s biggest weakness – operational complexity.
At a time when only 25% of retailers can connect their online and in-store transaction data it’s gaining momentum, with 20% of retailers heavily investing in it, 32% beginning to invest and 36% considering doing so. And retailers who used unified commerce in 2022 saw a solid 7% revenue boost over those who did not.
Omnichannel offers options, but creates operational complexity
Omnichannel strategies talked about creating a seamless and consistent customer experience across all channels, but the execution has left a large gap in the user experience.
Why? Retailers have to quickly spin up new channels as consumers demand them. An omnichannel approach does connect numerous channels, but they all operate in functional silos. That means customers can’t hop between channels in one seamless interaction and most attempts to deliver unified experiences fall well short.
Omnichannel makes things much harder for retailers in five ways:
Integrating data silos: Often loosely connected with manual processes and custom integrations, omnichannel solutions are fragile, inefficient and costly to maintain. The silos generate a cascade of inconsistent, inaccurate data shared across the business, making it virtually impossible to deliver a seamless customer experience.
Inventory that isn’t real time: Many omnichannel systems only access rudimentary sales and inventory positions. This prevents retailers from offering the ‘buy anywhere, fulfil anywhere’ options that are best for customers and most profitable for them.
Adding modern technologies and capabilities: Connecting legacy systems with modern technologies requires custom integrations, making the creation of new brand experiences complex, expensive, time consuming and risky.
Obtaining a single view of the customer: Silos negatively impact customers because they have to deal with inconsistencies and gaps, such as partial sales histories, different answers to questions or having to start new conversations in each channel.
Loss of innovation: Day-to-day inefficiencies mean that internal teams are tied up in remediation and troubleshooting and have less time to spend on creating the innovative, personalised experiences customers desire.
Here’s an example of how omnichannel creates operational complexity:
An omnichannel architecture could allow a retailer to look up inventory across all its stores but they would struggle to make all items available online. This is because many retailers have items that are difficult to ship, such as fragile items, dangerous goods or large and bulky or heavy products. With no ability to create customised views of inventory to make them available for click and collect but exclude them from home delivery or inter-store transfers, they can only offer these items in stores.
Unified commerce puts the customer experience first
Customers today expect to transact when, where and however they want. They don’t care how you achieve it and will reward you if you have it - or shop elsewhere if you don’t.
The only way to meet these demands for a truly unified experience is to move beyond omnichannel to unified commerce.
Unified commerce is an architectural approach that delivers seamless customer journeys across all channels, touchpoints and locations.
It breaks down the walls between internal channel silos by using a centralised commerce platform that combines point of sale, inventory, ordering and fulfilment, loyalty, pricing and business intelligence.
With a unified view of the customer, and all channels and engagement points connected in real-time, you can deliver a personalised and consistent customer experience.
Your customers get a ‘one brand’ experience: one person with one account, interacting with one unified brand. No hitches, and no inconsistencies.
You can make purchasing online and in-stores more seamless and convenient through endless aisle, digital payments and ‘buy anywhere, fulfil anywhere’ services.
And you can quickly respond to changing customer expectations and new technologies by using microservices and APIs to expose data and connect third-party services.
A unified commerce platform enriches your customer experience and positively impacts your entire business in so many ways:
Simplify your technology
Accelerate speed to market
Optimise inventory and availability
Boost in-store productivity and sales
Personalise your customer experience
Create relevant and agile experiences.
This blog was originally published in January 2020 and updated 17 October 2023.
Want help to reduce operational complexity?
We can help you define your goals, develop a business case and create your roadmap to simplified operations and unified customer experiences. Get in touch.
For insights into how a unified commerce approach gives you the flexibility and agility you need to keep in step with consumers’ changing needs, download our ebook:
Success or surrender: 5 critical moves for rescuing a failing retail software project, plus when to cut your losses
Has your retail software project hit rock bottom?
In my last blog, I talked about why many retailers fail to achieve the expected ROI from their retail management software investments and shared five tests a new purchase must pass.
In this blog, we’ll look at what to do when a software project goes wrong.
Enterprise software failure rates are remarkably high, though naturally rarely discussed in public! For some companies, their investments become a black hole, sucking up funds and resources to rescue the project. Others lead to serious business disruptions when the software goes live and the loss of innovations that deliver a competitive edge.
So how do you resurrect a failed software project and, more significantly, what are the important signs it’s time to cut your losses and walk away?
There are five steps to take to salvage a failing software project, or rebuild after a failure:
Step 1: Rethink your game plan and goals
Take another look at the original project plan and strategic objectives. Adjust them to fit the new reality and the challenges you've faced. Then set realistic expectations and lay out clear objectives for moving forward. Maybe you need to tweak the timeline, shuffle resources or reconsider the budget? A fresh plan gives you a chance to gain momentum and start over.
Step 2: Take a good hard look at what went wrong
Figure out the specific issues and challenges that caused the project to falter. Was it poor planning, bad program management, miscommunication or technical shortcomings? Communicate openly with all the stakeholders involved and listen to their take on the situation. Working together and sharing ideas will foster trust, encourage problem-solving and ensure everyone is on the same page regarding the path forward.
Step 3: Take stock of your team
Are the people and team dynamics that got you to this point capable of turning the project around? Check that the individuals have got the right skills for the job and are aligned with the revised project goals. Examine the team dynamics and make sure your leaders are up to the task. A great team can often turn things around.
Step 4: Call in the experts
If the project is in a critical state, it’s probably time to bring in outside help. Get on board external consultants and software vendors with real-world experience in the current disrupted retail environment. Ask them to provide guidance, identify areas to improve and suggest potential solutions. They'll have managed complex, large-scale deployments and can provide new perspectives and bridge skills gaps to get things back on track.
Step 5: Take action and keep tabs on progress
Take actions to remedy the identified issues and implement corrective measures. Whether it's changing team members, improving communication, adjusting workflows or adopting new project management methodologies, implement the fixes needed to address the issues. Keep a close eye on the progress, track the key performance indicators (KPIs), and have regular status updates to make sure things are heading in the right direction.
But what do you do when you’ve completed all these moves and the project is still floundering?
If the project is still not delivering real value after taking these steps, it can mean the wrong product was selected. Any software purchase that doesn’t meet its target ROI is a failure. And at a time when consumer confidence is low and customer expectations are rising, new technology investments are being held to an even higher standard.
Sometimes making the uncomfortable decision to cut your losses and start the process of finding a new software provider is the right thing to do.
While it may first register as a loss, it could end up being the best thing that ever happened to your retail business.
Here are the indicators that mean it's time to pull the plug and start over:
Misalignment with business KPIs: If the project no longer aligns with your strategic goals or the original business objectives have significantly shifted, it's a fundamental mismatch. When the deviation is substantial and irreconcilable, it's best to cut ties and focus on initiatives that do.
Unrecoverable delays: If the project keeps getting delayed without any end in sight, it's a red flag. When the delays are significant and impact the project's viability or business objectives, it’s time to assess whether the proposed solution is even feasible.
Escalating costs: If the project costs are skyrocketing and return on investment isn't looking promising, it may be financially unsustainable to continue. When cost overruns outweigh the expected gains, it’s better to cut your losses and move on.
Susceptibility to the sunk cost fallacy: This is our tendency to follow through on a project if we have already invested time, effort, emotion or money into it, whether or not the current costs outweigh the benefits. Any unrecoverable costs sunk in the past are irrelevant when deciding what to do next.
Insurmountable technical challenges: If the project faces technical obstacles or limitations that can’t be overcome within a reasonable timeframe, it’s an indication that the solution is not suitable or feasible. When the problems are too big to fix or would require a complete overhaul, the software is not the right fit.
Stakeholders withdraw support: When important stakeholders lose confidence in the solution or no longer provide support, it's a clear message. If the solution cannot realistically recover to meet their expectations, it’s time to consider ending it.
Making the call to exit a failing software project is tough, but often necessary.
It’s an opportunity to find a solution that best meets your particular needs, allowing you to create real, sustainable value for your retail business.
Want help to assess the viability of your software project?
If your project is not delivering the returns you expected, we can help you navigate the complex issues and find the right path forward. Just contact me at kelly.brown@triquestra.com or get in touch.
For insights into how a unified commerce approach gives you the flexibility and agility you need to keep in step with consumers’ changing needs, download our ebook:
