Agility and Its True Impact on Retailers
We often talk about the importance of not just meeting but exceeding changing customer expectations. The problem for most retailers, however, is that the bar continues to be set higher and higher, making it more difficult to adapt and accommodate customers' demands.
Retailers either adapt their processes and operations as needed or they risk losing their shirt to other vendors. The COVID-19 pandemic, for example, required retail grocers to quickly ramp up contactless delivery of goods and services. Retailers without flexible infrastructures and agile development methodologies found it difficult to pivot to meet the challenge - a surge in online ordering and order fulfillment, as well as new delivery methods like curbside pickup and home delivery. Many retailers find it difficult to implement these changes efficiently while still delivering a positive customer experience amidst these types of unprecedented changes.
COVID’s mandate for limited physical contact and social distancing only accelerated shifts that were already in motion. Take the rise of the “low price leaders” — whether they are online giants, big box stores, or bargain-basement “dollar stores.” Amazon, Walmart, Dollar Store, and others make it near impossible to compete on price alone. This is one of the reasons customer expectations keep changing. Whether it is groceries, electronics, pet food, or fine wines - price isn’t the only factor anymore.
To gain a competitive advantage, retailers must shift away from selling commodities and towards selling experiences. It takes agility to deliver a unique, differentiated experience to customers and beat a competitor to market. Retailers that have already started innovating to accommodate recent trends have a jump start on the competition. It’s never too late to start, though, and retailers need to start if they want to avoid being left behind.
Why it’s so hard for retailers to make a shift “on a dime”
It’s crucial for retailers to not only be adaptable to meet customer expectations but also agile enough to do so quickly. That being said, getting started on that road has its challenges. In fact, most retailers face obstacles from three directions: people, processes, and technology.
- People and knowledge turnover
While store managers and a handful of employees hang around for years, many retail workers are ephemeral — students, part-timers, or seasonal workers — with a whopping 65% turnover rate. That means there’s usually a very small group of people that know how to use the store’s systems efficiently, as well as a constant cycle of training and re-training.
- Slow-to-change processes
Partly due to the constant turnover of employees, it is slow and tedious to change “the way things are done” in a store. It often takes six weeks’ notice for any new process, including time to define, refine, and train employees. This is made more difficult with a rapid solution development and rollout; you don’t know what the end-process will be until it is built. For example, JBS Solution’s curbside pickup implementation for Petco took only six weeks. To avoid another six weeks to make the final process change, it was critical to come up with a way to make store processes, procedures, and training more agile and adaptable.
Technology can’t fix every problem, but sometimes the idea of replacing aging retail technology is simply a no-go. Some retailers’ POS systems are 10 or even 20 years old. The capital outlay to replace them with 2020 tech-aware systems can be prohibitive, but it is essential to somehow integrate those antique systems with more modern technologies and capabilities in order to stay competitive.
The benefits outweigh the challenges
Given that these three categories all have multiple facets to address, it’s not hard to see why “agility” and “retail organizations” often don’t easily mix. At the same time, the benefits of following an agile approach far outweigh the pains of maintaining the status quo—and facing eventual failure. Indeed, when done properly, an agile overhaul puts the retailer on a path that makes future innovation quicker and easier. In the end, the retailer is more adaptable to change than they were before.
For one thing, agile practices remove the need for building and maintaining complex and invasive 'many to many' integrations between existing systems - or having to replace those systems outright. JBS follows a flexible, microservice-based approach to integration architecture that wraps a retailer’s existing systems and exposes additional functionality and data. This extends the useful life of the aging systems by allowing retailers to seamlessly combine them with newer technologies such as e-commerce, mobile apps, big data repositories, and advanced analytics and reporting.
Perhaps most of all, with this approach retailers can make significant strides towards meeting customers’ rapidly changing needs and demands, with a host of other benefits.
- Operational efficiency
- Visibility and insights into customer behavior
- Higher customer and employee satisfaction and retention
- Increased brand loyalty
- Higher basket size and value
- New revenue streams
- Quicker implementation of future services
With this newfound agility, a retailer gains the facility to create and sell unique customer experiences. They can also attack operational inefficiencies that were previously only addressable with manual, trial-and-error methods. Take perishable inventory and waste management, for example. The COVID-19 pandemic disrupted supply chains like nothing has in decades - customer behaviors were changed almost overnight. Suddenly, retailers were over-stocked on some products and under-stocked on others. Retailers without the ability to analyze the data quickly and adapt to sudden changes were faced with both spoiled inventory and upset customers.
Real-world cases of retailers that gained the agility to innovate
The challenges in responding to fundamental shifts in the marketplace and customer expectations are real, but they needn’t be insurmountable— even if retailers are saddled with decades-old legacy systems. Coming up in the next post in our retail series, we’ll examine how JBS Solutions has helped retailers with very different needs and requirements “pivot on a dime” and gain the agility they needed to adapt to a rapidly changing retail landscape.
Meanwhile, we’re here to discuss your unique challenges in adapting to the new normal. JBS Solutions has years of experience implementing efficient, full-featured solutions for multi-billion-dollar retail environments. Contact us for a free half-day assessment to find out how we can help deliver true agility to your next retail solution, while providing the best possible experience for both your customers and employees.