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Retail Operations: Don’t Sweat the Small Stuff

By August 5, 2013Article

We continue to see turbulent times for retailers as consumer shopping habits keep shifting. Fundamentally, there is no time for complacency and retailers have to sharpen their offerings to stay ahead of the game. A direct impact of this is that retailers have, by necessity, integrated technological conveniences into stores — a popular example being expediting checkout experiences through mobile technology that allows shoppers to scan and pay, or letting consumers purchase products not available in the store.
The U-turn in consumer spending over recent years can largely be attributed to technological innovations, with one of the greatest impacts on this progress and performance being innovations with regards to in-store technology. As consumers are more comfortable with online shopping, they have come to expect speed and ease of use; as a result, the traditional store format will no longer be sufficient to survive. Indeed, in order to stay ahead, optimising, integrating and automating existing and future technology and processes will be key.
eMarketer estimated that in-store mobile payments will add up to $640 million in transaction volume in the United States in 2013, up from $170 million in 2011. Investment into in-store technology is expected to accelerate with John Lewis, Burberry and Marks & Spencer leading the way and transforming the retail industry by technology such as “Click and Collect,” services that are already proving popular with consumers.
However, despite the well-documented rise of ecommerce, almost 90 percent of sales still occur in physical stores and therefore retailers have to operate quicker and smarter if they are to survive and remain agile to competition. The emphasis of offering the right product to the right customer through the right channel remains paramount.
Run the business
With such a vast proportion of IT budgets being channelled into day-to-day activities, there is a real need for IT to work smarter if it is to enable better business performance. In many cases, highly paid skill sets are overloaded with keeping things running, creating bottlenecks that obstruct the IT department’s ability to deliver value to the business fast enough to get ahead in an increasingly competitive landscape. However, it is often the case that in the race to meet consumer expectations, retailers turn to technology and often purchase disparate pieces of software and equipment with the hope of achieving such efficiencies.
As IT infrastructures continue to exert ever-increasing influence over the operations of businesses, CIOs face a huge challenge — a vastly increased responsibility for the well-being of the company that is exponentially greater than the resources dedicated to maintaining it. The disparate sources of data need consolidating in order for the same service to be available across multiple channels. If retailers spend time and resources on administering processes and technology, they are not spending time on innovation and strategy to drive the business forward. 
Both bricks and mortar and ecommerce retailers face challenges in warehouse management, point of sale and other external systems such as mobile applications; and to manage customer experience, this needs to be fully integrated. 
Building the business
There can be a disconnect between what is considered to be development activity and operations activity, which can lead to inefficiency. DevOps is a cultural and professional movement that aims to break down these potential silos and is about culture, automation, measurement and sharing. Common areas that would benefit from automation are release management of applications and codes, systems integration, monitoring and testing. A key element of DevOps is automating repetitive tasks using software development, which frees resources from manual tasks, reduces error and increases speed to deployment. 
A successful example lies with Marks & Spencer, which recently announced the opening of a fully automated 900,000 square-foot warehouse in the UK that will eventually be able to handle over a million orders a day. As part of the announcement, M&S admitted that its current systems were aging and inefficient and that it had outgrown its traditional business infrastructure as online sales continued to increase. M&S believes the new deployment will generate vast improvements to the way it serves online customers and aims to launch a “market-leading proposition” in the way it delivers online purchases to shoppers. 
With so many people across the organization working on application updates, and each group typically keeping its information in its own set of spreadsheets, retailers have no reliable way to manage application knowledge across the organization. There’s no traceability when something goes wrong — no way to find out who was responsible for that part of the application, which doesn’t interact well with the traceability needed to meet the growing list of customer demands.
Developers are under pressure from the business side of the organization to get updates into production quickly so that end users can have access to the new features. Operations groups, on the other hand, focus on factors like control, security and manageability, which tend to slow things down. Still, the trend is towards more frequent updates. In some cases, production updates may occur as often as daily — particularly in the case of dynamic Web applications. In other cases, they may be weekly or monthly or, more rarely, quarterly.
The ability to segregate duties (e.g., keeping developers out of production environments) and detailed documentation of all aspects of the release process play a key role in helping to meet regulatory requirements. The application release process should be smooth and seamless, critical to efficient deployment. End-to-end visibility eliminates the need for scripts and error-prone manual steps. It gives businesses complete control over all aspects of the application release process, enhancing both security and compliance.
Transform the business 
With the continual shift in consumer behavior both on and offline, retailers need to be able to deploy application and code changes quickly and efficiently. This is ever more challenging with the increased use of cloud technology and virtualization, alongside deploying solutions across various business units and applications. 
As a result, many retailers are now turning to utilizing software featuring real-time, event-driven and message-based infrastructure integrating multiple applications. This enables the access of data across hardware platforms, applications and operating systems where legacy systems, ecommerce and CRM can be consolidated in a fast and cost-effective way. Typically, data from a point-of-sale module can help a retailer with fulfilment; yet having the same data within a CRM application can create additional sales and marketing opportunities, something retailers can no longer afford to miss out on. 
Historically, without this integration, end users had to rely on manual processes and entering data into multiple systems, which is time consuming, ineffective and error prone. As consumers become more demanding, the need for the best ERP, CRM and fulfilment data warehouses all working together (alongside legacy systems) becomes critical to protect a retailer’s brand and ensure in-store and online customer experiences are unified and optimized. 
According to new research from IMRG, fulfilment plays a principle role in customer retention, with 74 percent of consumers encouraged to shop again with a specific online retailer if the delivery experience was positive. Optimizing processes such as warehouse fulfilment and order picking will quickly become a necessity for retailers to ensure consumers return and are not led into the hands of a competitor. 
Retailers across the world are under increasing amounts of pressure to work more efficiently and cut costs across their organizations while increasing revenue. Add to this customers’ increasingly high expectations, and it’s easy to see how traditional retailers are faced with the realization that they must modernise and invest in technology to remain agile or risk falling behind.
This is where a process like automation comes into its own, managing time-consuming administration and routine maintenance tasks that eat into retailers’ IT resources, freeing up staff to focus on innovation, the key driver for success for any retailer. The tools, technologies and infrastructure to manage complex business processes end to end, which will directly help increase competitive advantage by ensuring consumers are presented with the end result, giving the optimum experience whether online or in store.
Craig Beddis is chief marketing officer at Automic. Craig replicates many strategic marketing/sales initiatives he successfully implemented in Northern Europe across Automic’s global reach and focuses on building the business through thought leadership, closer alignment of sales/marketing, and promoting Automic’s ONE Automation strategy. Craig has been in tech sales and marketing transformation 20 years and has held a number of business growth and leadership roles at BMC Software, Citrix, Netscaler, Iona and WebPerform Group/Gomez.

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