By Derek O’Carroll, CEO, Brightpearl
In the face of rapidly-changing consumer lifestyles and shopping habits, businesses are finding the need to pivot quickly to stay competitive in today’s landscape.
Digital transformation is something we’ve been talking about for a long time in retail, but many brands swiftly moved online, seemingly overnight, once they realised this is how they would stay afloat – a quick glance at Shopify’s recent sales surge shows some merchants are quickly adapting operations to survive the coronavirus. Other retailers are opening up multiple channels online using Amazon Marketplace and eBay.
However, many others are faced with the burdens of legacy; on premise ERP systems which stand in complete contrast to retail innovation, speed of deployment and modernised functionality which are essential in these challenging times.
Forrester even talks of the new era of the Digital Operations Platform, where antiquated ERP systems are being phased out by next generation DOPs that are better suited to modern digital business. This is crucial in the current climate because DOP systems offer flexibility to rapid changes in demand and integrate with other aspects of your business, as well as being built for speedy deployment to enable merchants to react quickly to the coronavirus challenge.
Planning to fail
The lack of innovation, long-term technology planning and investment is a retail dilemma. One of the most surprising statistics to come out of Brightpearl’s Retail Tech Stack report was that 1 in 3 retailers either do not have, or are not aware of their business having a long term IT strategy.
PA found that 66 per cent of executives stated they’d made little to no moves towards making the innovative changes they felt their business needed to survive. This chimes with another concerning statistic from the Brightpearl.com study which highlights that more than half of retailers (51%) admit they do not have the time or expertise to confidently make major software investments.
Even at the best of times this presents a problem, but given the current retail climate it presents a catastrophic oversight. Multiple chains and categories have gone dark because of the lack of technology planning and investment, combined with a reliance on Legacy ERP which impairs the ability to operate across multiple channels.
The C19 crisis will force retailers to act much more quickly than they normally would. As the world moves to digital, entering into technology partnerships will become increasingly common.
Lockdown is pushing consumers online and this creates a huge opportunity for smaller players, however, it is more imperative that retailers invest in the right technologies to support greater flexibility, such as the ability to enter new markets with minimal investment or to test new business models to help them weather the C19 storm.
But even brands making the switch to the online DTC space should understand that this channel is going to expand past what they previously had. When you’re operating in different markets and you’re scaling quickly, you’ve got to have the right retail operations in place to respond effectively.
Without those mechanics, for example, to handle inventory, shipping, and logistics across multiple channels and locations, or for more real-time customer-facing support, the business is quickly going to run into problems.
Tech investments pay off
All merchants no matter how digitized, now need to look beyond COVID-19 and start thinking about what the future may look like. This is a perfect opportunity to take the time to really evaluate your tech stack and assess the operational pain points within the business that could be addressed.
Brands should take lessons from this pandemic: Tech Investments Pay Off. Retailers that have invested in their operations to support real-time visibility across channels are faring much better than those that didn’t as tactics like click & collect prove to be key survival factors.
Those brands that ultimately thrive post-crisis have, or will be implementing long-term IT strategies that are underpinned by intelligent retail technology which form the building blocks for multichannel growth and success.