Budget And The Single Platform
In nature, a “perfect storm ” occurs when a combination of drastic patterns collides to make something much larger -much more impactful – than they could on their own. I’m no meteorologist, but I’ve noticed that the magic number tends to often be three.
Budget has become a fairly drastic issue in retail lately, something that most recently showed up in our latest Mobile report. In comparison to last year’s report, when retailers identified their top challenge as not having enough eCommerce/Mobile resources to manage all of the available mobile opportunities (which received 65% of retailers responses and was even higher for Winners at 67%), the mere 38% of retailers who report this as a roadblock this year signals a significant change.
In fact, for the past several years, retailers have consistently told us that even with a budget, they wouldn’t have the human resources necessary to address all the technology-related challenges and opportunities on their wishlists, and especially that their IT departments were already spread much too thin. Many Retail Winners still are very concerned about getting IT resources to focus on mobile strategies (43% compared to 28% of all other respondents).
The tide has now turned, and in research ranging from eCommerce to Omni-channel to the Store, retailers tell us that it’s become all about fighting for budget, once more. This is particularly true for Retail Winners – 55% compared to 46%of all others in the Mobile benchmark. Does this indicate that budgets have frozen? Or does it mean that retailers have too many “top ” priorities while trying to engage with empowered consumers across multiple fronts (including the supply chain, merchandising, and marketing)?
What does remain consistent from last year, however, is exactly how a majority of retailers think they can get past their internal roadblocks: they see a streamlined technology platform as the key to their way forward (Figure).
Figure: A House United
Source: RSR Research, February 2014
And this trend may serve as our second drastic pattern: even since the dawn of catalog sales (and to a much larger degree, eCommerce), retailers have struggled to not only fulfill orders across multiple channels in a consistent manner, but to provide an overall brand engagement that feels consistent to the consumer across myriad touchpoints.
In fairness, how can a retailer be expected to provide a seamless experience from one channel to another when many of the necessary technologies have simply been bolted on over time to older, existing systems as the evolutionary demands of shoppers required them? As channels proliferate – and with who-knows-what shopping behaviors/channels/technologies to come in even the next few years – the answer is “it’s incredibly tough, ” and most retailers recognize this (Retail Winners see this in particular; 57% compared to 49% of all others). Most are ready for a true all-channel end-to-end commerce platform, and for those who also operate stores, many are hoping its arrival will solve many of the problems their stores currently suffer from, as well.
If a perfect retail storm is to be avoided, at least one of these two patterns will have to be downgraded before the customer “system ” gains much more power.