Your retail management system is at the heart of your business efficiency. It keeps your operations smooth, connects all parts of your business, and helps you deliver services and experiences that meet and go beyond your customers’ expectations. Still, many retailers operate on legacy IT. Often, these patched-together systems can’t sync information properly, are hard and costly to maintain don’t allow retailers to deliver the services that consumers demand. Although many retailers are afraid of the investment required by a new system, outdated tech may be already costing them more than a complete technology overhaul. Are you, like many retailers, losing competitiveness because of your outdated software systems? We have compiled a list of the top red flags you should look out for. If two or more of these points hit home, it’s time for a technology overhaul.
You can’t accept product returns across channels
Today’s consumers browse and shop on multiple channels, and they expect to be able to return purchases the way they like, too. According to a study by Forrester Research, consumers demand simple and easy returns, and the ability to return items bought online to brick-and-mortar store locations. “There are a lot of people who don’t even bother returning [products] because it’s such a pain, and when they don’t bother returning, they just don’t shop with you again,” says Sucharita Mulpuru, retail analyst at Forrester.
Ask yourself: Does my current technology enable me to offer customers the abilty to buy online and return in-store?
You can’t offer click and collect or curbside pickup
Click and collect – also known as BOPIS, for Buy Online and Pick up In Store – is one of the most sought-after services by consumers. Curbside pickup has been around for a few years, but it surged in popularity during the pandemic. Both options are expected to remain in high demand with shoppers, as they bridge the gap between ecommerce and physical retail, and are both highly convenient and – when needed – contactless. Click and collect also holds benefits for retailers, as it has been shown to lead to larger shopping baskets as customers add unplanned items when they go pick up their purchases.
Ask yourself: Am I missing out on both sales and upselling opportunities by keeping my e-commerce and physical locations disconnected?
You regularly oversell items
In many retail chains, each store location runs on its own database, and the eCommerce website runs on another platform altogether. When information is saved in separate places, if the systems do not communicate with each other in real time, there is a very high chance you might sell an item on your eCommerce website even if the product is actually out of stock. At that point, you’ll have to inform the customer you can’t deliver the item they bought – losing the sale, and perhaps, the customer’s trust.
Ask yourself: Do I have out-of-sync, siloed information? Is inventory information updated too seldom, causing a stale view of inventory and overselling?
You don’t give customers visibility into the inventory
Consumers are increasingly taking purposeful shopping trips. Today, two out of three consumers check if the item they are looking for is available before they head out to shop, the IBM Institute for Business Value reports. If you don’t give visibility into what products are available in your stores, customers may not make the trip to your store at all. Yet, only around one third of retailers give customers access to accurate product availability across store locations, and 45% offer no access to inventory at all, according to data by Sapio Research. It’s not just consumers that don’t get the visibility they need. Less than 15% of retailers give their store associates effective inventory visibility across channels, according to BRP research. This means that sales staff can’t, for example, tell customers whether an item they desire is in stock in another store location, or instantly offer a suitable replacement.
Ask yourself: Do I force shoppers to make the trip in person to find out if a product is available in my stores? Can my sales associates help consumers, looking up product availability in other locations?
You waste a lot of time on manual tasks
You’d be surprised at how much time is spent on doing manually tasks that could be digitized. EKN reports that two out of three retail professionals are still forced to spend time completing physical paperwork during store visits! All these physical documents must then be analyzed and transcribed, manually – leading to further waste of time and risk of errors. Crocodile International, one of our customers, told us that their accounting staff used to spend many hours at the end of each month to manually verify inventory figures against sales orders. They were forced to because of legacy systems that didn’t communicate with each other. The delayed transaction postings also made them unable to know exactly how much stock was available at a given time.
Ask yourself: Am I wasting a lot of man-hours with manual entering and double-checking of data?
You can’t recognize customers across channels
Today, the average shopping journey can begin with a customer seeing a new item on your Facebook page. They might then check out the item in one of your store locations, and buy it later on your eCommerce site. To engage customers, you need to be able to identify and follow them across the various channels and touchpoints they use. You must then share this information across your enterprise, and use it to create personalized interactions. Unfortunately, this is near impossible to achieve if, like many retailers, you manage each channel – perhaps each store – as a separate entity. Some companies don’t even have an integrated customer database, and valuable customer information like sales per client, payments, loyalty points, is stored in separate systems which don’t communicate with each other. The result? Duplicate information, incomplete and inconsistent records, and no clear view of who each consumer is, what they like, etc. When you don’t know your customers, you cannot design meaningful loyalty programs and rewards, deliver personalized recommendations, or offer relevant promotions.
Ask yourself: Can I connect my customers’ data and use it to create personalized interactions? Or is this data locked away in silos and unusable?
You can’t get real-time reports
A real-time view of your retail operations is necessary for timely, effective decision-making, especially (but not only) during crucial events and sales periods. Unfortunately, when you are running each location as a separate entity, connecting and comparing each store’s performance can be complex and time consuming. Not only is data often inaccurate or incomplete, but once everything has finally been aggregated into a single report, chances are that the information is already outdated. At that point, any business decision you make risks being ineffective, the “too little, too late” kind.
Ask yourself: Can I trust the quality of the information I use for decision-making?
It’s complex and time-consuming to change prices or implement new offers or promotions
When you are running your business on several separate systems, even basic (but necessary) activities like running promotions and changing prices can become complex and costly. One of our customers, a resort with retail stores and restaurants, told us how with their old IT setup they couldn’t run offers. They were using many software solutions, and since information couldn’t be synced, the company couldn’t track the performance of different products. And without knowing what items sold best and which were slow movers, they couldn’t run effective offers. Even changing prices can be difficult, when your IT setup hinders you. Auto Milovanovic, a specialty retail company selling spare car parts, used to keep its price tables on separate databases and Excel documents. Finding or changing prices was very time consuming – and since the process was manual, mistakes happened.
Ask yourself: Can I easily change prices, plan and run new offers, and track the results of marketing activities in my retail chain?
You spend a lot of money on system maintenance.
In a recent study by Stripe, almost 70% of UK developers said their businesses are being held back by outdated and custom-built technology systems. Over 17 hours a week (almost half of a working week!) are wasted on system maintenance tasks, including debugging, patching old systems and fixing bad code. Stripe estimates that outdated, legacy systems have a negative impact on global GDP amounting to around $300 billion per year.
Ask yourself: Are some of my IT systems so old that they are not supported anymore? Am I spending so much in system maintenance that I can’t afford to replace the IT?
The majority of retail leaders who took part in Data Driven’s “Digital Transformation Trends” research say that digital transformation is an essential part of their retail strategy. To achieve effective digital transformation, retailers must ditch the disconnected, legacy systems that are limiting their visibility and their ability to compete, and upgrade to a unified commerce platform. Unified commerce unites all parts of the business within one common platform, which is used across the enterprise, across physical and online stores. When all your key business information – from customer data, to products, to financials – is stored in a single place, it can easily be shared in real time across the whole company.
Blog reference: LS Retail Official- https://www.lsretail.com/blog/is-outdated-technology-destroying-your-retail-business-9-red-flags-to-look-out-for