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For years now, many retailers have felt like they’re playing an impossible game of technology tag. Every time they come close to catching up with the latest app or device, a newer, faster offering appears on the scene—and the chase is on again.
Mark Innes has dedicated 35 years to understanding the inner workings of retail, and he has some good news for companies frustrated by ongoing technology challenges. Stop chasing the latest and greatest trend, he says, and start taking a strategic, agile approach.
Innes is Chief Retail Engagement Officer at the David Sobey Centre as well as an Associate Partner at IBM Consulting in Retail and Consumer Packaged Goods. His extensive experience working with retail brands across North America has shown him the complexity of integrating new technology into retail environments. It has also demonstrated, time and again, the virtue of pressing the pause button to strategize before launching a new tech initiative.
“The biggest thing,” he recommends, “is to be strategic in how you approach adopting new technology. Because if you don’t have a plan, things aren’t going to work out. And the other thing is to be super agile because capabilities are changing faster than you can keep up.”
Why technology is so tough for retail
The business of retail is inherently complicated. As Innes points out, retailers must keep their eye on “many moving parts.”
Whenever you introduce a new “tool” into your organization, you’re probably affecting some combination of customers, front-line workers, and managers. You’re also impacting established routines, from the way employees restock shelves and transact sales to processes for communicating with suppliers and managing your head office. To make things even more challenging, you may be making such changes across hundreds of physical locations, spread out across different regions.
Because retail depends so heavily on well-oiled procedures, introducing new technology requires you to think through all the ways your “moving parts” interconnect. Employees must be able to seamlessly insert tools into their work flow, or “improvements” that sound great to management will flop on the store floor.
Success starts with strategic alignment
When a new technology doesn’t work out, it’s usually due to a weak link in one of the four steps it takes to successfully adopt a novel solution: planning, communication, execution, and change management.
Success, according to Innes, depends on how closely you align technology with existing brand strengths through each of those phases.
After all, technology never makes you a different company; it simply makes you a better version of the organization you already are.
To be effective, any novel solution must reinforce the essence of your brand. For example, let’s say you’re known for personal service. Then any technology you adopt should make your service more personal. If all it does is make service more efficient, then the so-called solution is out of sync with the brand—and it will soon become a problem.
Bear in mind that most technology implementations take a year to 18 months to complete. During that transition period, employees must unlearn old habits and learn new habits. The motivation to do that quickly wanes if they sense a conflict between what the technology does and what the brand they know and love stands for.
Balance planning with agility
In the life of a retail organization, 12 to 18 months may not seem a long stretch. But in terms of technology, that’s more than enough time for a new solution to go through multiple updates. It’s also plenty of time for other elements in your technical landscape to evolve, or suddenly become obsolete.
That’s why Innes urges retailers to take a flexible approach to planning. Create enough structure to guide all those “moving parts” through implementation while anticipating adjustments.
The nature of retail requires leaders to spend most of their time focused on daily operations, with little attention left to think about enhancing performance. So any technology plan must be simple, prioritized, and malleable:
- Keep it realistic. How much change can you cram into the small amount of time you and your team have to devote to innovation? It’s better to execute well on a simple plan than to attempt a complex plan and fail.
- Think sequentially. Identify your priorities and tackle them one at a time. Start with the change that will pay the biggest benefit, and then build on that.
- Assume the need to reshape the plan. You’re entering into unknown territory, so don’t expect your map to show all the hills and swamps. Be ready to re-evaluate your strategy and to redraw the map in response to changes in the environment. For example, your customers could change their shopping habits. A natural disaster could happen. The inflation rate could rise or drop.
Be prepared to “test and learn,” says Innes. Start with a small sample size, perhaps a handful of high-performing stores or stores in a certain geographic region. Roll out the new technology to this pilot group and observe what happens. It's easiest to adjust when you’re dealing with just a few parties rather than the entire business.
Ten years ago, JC Penney learned this the hard way. When Ron Johnson took the helm in 2012, he decided to get rid of discounts in all stores and give customers lower prices year-round. Revenues took a nose-dive, and Johnson parachuted out of the company (involuntarily) just 16 months after becoming CEO.
Bring it all back to brand
In retail, it’s easy to get sucked into agonizing over the shiny, new toys your competitors are showing off. If Retailer X has a new chat bot on their website, shouldn’t we get one too? And if Retailer Y has just brought a smart cart into their flagship store, why don’t we have one yet?
But Innes warns against trying to keep up with the Joneses. Your brand isn’t the Jones brand, so what works for them could—and most likely will—misfire for you.
For example, a dollar store might easily be seduced by an app offering a digital loyalty program. But a dollar-store brand doesn’t anchor itself in personalized customer service. Discount brands tend to value efficiency over customer perks so they can pass cost savings onto price-conscious consumers. For a chain such as Dollarama to invest in a customer loyalty app wouldn’t just waste time and money; it would also confuse their customers.
On the other hand, a dollar store could reap big benefits from any technology that allowed customers to serve themselves, such as touchless checkouts. Empowering shoppers to save money, even at the “cost” of personal service, would align perfectly with their core mission and values.
As you consider ways to strategically integrate new technology into your retail routines, Innes offers three key questions to keep in mind:
- How do the alleged benefits of the technology compare with the benefits your brand delivers to customers?
- How will the technology affect the way your customer experiences your brand?
- How will the technology help convey your value proposition?
In the end, says Innes, “Adopting a new technology is really about enhancing, solidifying who you are. Let’s think about what’s best for our customers.”