The retail revolution: Jon Stretton’s thoughts on an industry in flux
The retail industry has always evolved swiftly, but rarely has the pace of change been as intense as today. With new competitors, new technology and an increasingly globalised, 24/7 shopping environment, many global retailers are scrambling to amend systems and reboot business models to survive or thrive in the years ahead.
In times of uncertainty, those best able to adapt, evolve and embrace new ways of working are the ones that emerge strongest. Here PCMS Chief Commercial Officer Jon Stretton discusses how for retailers, the risk of inertia is high, but for those willing to invest and experiment, the opportunities are enormous.
How do you feel about the retail industry today?
“It’s more exciting than ever! The general public may be being fed a daily diet of headlines about department store closures and the desolation of the High Street, but those that work in the industry can see we’re in a period of colossal opportunity. For the first time ever, retailers are able to reach customers wherever they are, whenever they want and with highly-targeted, highly-personalized offers. In this new age of retail, there will be casualties. But there will be big winners too – the business that innovate.”
What is the key to adapting for the new age?
“Retailers need to make two fundamental changes. The first is in mindset. It’s time to stop the silo mentality between departments, and give every part of the retail operation the tools they need to truly place themselves in their customers’ shoes and work out how, and where and when, they would most like to be engaged with. This is not all new thinking: the fundamental principles of retail remain the same; for example, knowing your customer, personalizing the sale etc. But it’s by adapting those old principles to a new multi-channel world that retailers can thrive.
“The second requirement is a fundamental shift in technology. Einstein famously said the definition of insanity is doing the same thing over and over again and expecting a different result, yet we still see major retailers marrying themselves to bespoke, inefficient commerce systems. On these systems, every customization makes the retailer more vulnerable. Instead, mid-market and Tier 1 retailers need robust, flexible “on product” core commerce systems that enable them to evolve for today’s rapid growth in new shopping habits, shipping options and channels, and for tomorrow, when AI and the Internet of Things really kick in.”
What do retailers need from a commerce system?
“Flexibility, scalability, reliability, and simplicity. Flexibility, because we’re in a state of rapid technological advancement, both at the consumer and the retail end. Scalability, because we’re in an incredibly fast-moving industry – changes have to be rolled out across regions and formats at breakneck speed. Reliability because anything that breaks during peak demand will cost millions of pounds in lost sales and damaged reputations. And simplicity, because simplicity enables swift responses to competition from Amazon, Alibaba and the like, as well as being a way to drive strategic wins without unnecessary complication. At PCMS, we’re confident we offer best-in-class in all four areas.”
What are the barriers to new commerce system adoption?
“Some businesses are in denial about the state of their commerce systems; they’re simply not equipped to deal with the way shoppers want to browse and buy today.
For example, many large grocery businesses have kept the same legacy systems for twenty years or more. During that time their business model has altered considerably – think click and collect, home delivery, fuel and cafes. But they’ve updated their old system piecemeal, and because of the volume of small changes the result is a gnarly mess. These spaghetti-like systems are creaking under the hundreds of minor tweaks that have been made in isolation, meaning the amount of programmer time needed for even the simplest of changes is incredible. Worse, when they do make a change, it can have an unforeseen negative impact somewhere else. It’s a precarious and costly approach – every update is a bit like adding another block to a Jenga tower.”
What is the answer?
“Retailers above a certain size need a robust, underlying platform, one that’s designed to be built upon, is easier to manage and less expensive to own. Ease of reporting to truly understand the end-to-end journey is key. If you look at the retailers that are really innovating and responding to changes in shopping habits – for example food businesses using scan and go technology – you can see they’ve got a solid but flexible system that’s enabled them to experiment and evolve.”
What does PCMS offer?
“Against the backdrop of constant change, only PCMS has the technology and support that can help retailers remain relevant. We update our software once a fortnight, and share an 18-month investment and technology roadmap with our partners. With our cloud, IT service desk and VISION Commerce Suite, retailers have a flexible, scalable, single-system that enables them to fight their way through the challenges ahead – fast.”
++ Jon and the rest of the senior PCMS team will be at Retail’s Big Show in New York in January. To book an appointment, email email@example.com. Alternatively visit our interactive displays at booth #2001.