In this age of technology and innovation, using obsolete or outdated systems sounds the death knell for any retailer. It is no longer seen as innovative to future-proof your business, it is vital — if you don’t want to end up on the business scrap heap.
Consider this: of the Fortune 500 firms that existed in 1955, 88% are no more, either through bankruptcy, mergers or simply tumbling down the list. You would be hard-pressed to recognise many of those that still remain from 1955, so different have their business models become.
There are many famous examples of companies and brands that refused to embrace change. For example, think about one of the most iconic brands in the video rental space, Blockbuster Video. Around since 1985, at its peak it had more than 9 000 stores worldwide, but unable to transition towards a digital model, Blockbuster filed for bankruptcy in 2010.
(The irony in the backstory here is that Netflix approached Blockbuster with an offer to sell their company to Blockbuster for US$50 million but was turned down as it was seen as small fry, a ‘niche market’ that was losing business at the time. How they must kick themselves when you look at Netflix now!)
In today’s fast-moving customer-driven marketplace, agility is key, being able to pivot when trends emerge, systems become cumbersome and outdated — and a new business model is unavoidable.
Like Blockbuster, retail has reached a fork in the road: traditional or digital. As the landscape changes and evolves around customer buying behaviour on the back of the pandemic, technological superiority is now a basic requirement, along with agile working practices in strategy, structure, people and processes.
Nick Grayston, CEO, The Warehouse Group, New Zealand has this to say: “Historical command-and-control mechanisms simply do not permit us to operate fast enough, to become changeable and nimble, and to have ‘speed as a habit.’ To make this work, we need to empower cross-functional teams to operate autonomously at the edge closest to the customer.”
Retail is moving way beyond omnichannel or multichannel, it will involve retailers offering in-store merchandise for purchase online, enabling brick-and-mortar shoppers to have their purchases delivered to their homes, thereby enhancing the shopping experience, no matter where it takes place. This approach is facilitating the move towards integrated retailing. In time, online and offline will morph, and the traditional divide between the two will disappear entirely.
It is for this reason that retailers must have an adaptive technology backbone in place. No more are tools such as mobile payments and apps viewed as remarkable, they are considered standard in the era of omnichannel retail and, as the rate of customer-driven demands continue to accelerate, retailers are going to have to constantly adapt to keep pace and keep customers. And there, driving the adaptation is the Internet of Things, artificial intelligence, augmented reality, and new social platforms for customers, forcing retailers to flex, based on customer demand.
No longer is simply having a great brand enough for retailers competing in the new market environment. Customer behaviour is evolving, and they are looking for convenience across all touchpoints, no matter how they choose to interact, browse, or purchase, expecting a single and seamless end-to-end customer experience.
Innovation and flexibility are the name of the game and those companies that fail to move with the times are destined to be buried in the sands of time.
