Halford’s Neil Holden guides CIOs and CTOs through the path of digitization, reflecting on the challenges and opportunities to keep businesses on track in the current retail environment.
The pandemic had an alarming effect on the speed of digitization, and no more so than for the retail sector. IT roadmaps shortened by almost half while demand for digital services soared – previous years have proved an intense period for digitization. Now, the sector faces new external challenges.
During my time as a retail group CIO, digital services have been highly sought-after by retail companies, a move that started long before COVID impacts were felt. As the effects of the pandemic took its toll, digitization strategies were tightened and shortened – project timings were commonly cut in half, and as a result, CIOs, CTOs, and IT teams increasingly had to work together to implement successful digital strategies in shorter time frames.
The new and emerging pinch points of retail
As things have returned to a new normal, there are a number of pressure points and challenges facing retailers that are still looking to digitize their front and back-office operations. Here’s the list:
- Tech talent shortage – a lack of in-house technology experts can hold back most digitization initiatives. Deloitte, for example, has recently highlighted the software engineering shortage, where stats show more than 90% of IT leaders plan to expand their modern software engineering and cloud environments, yet 80% say inadequate employee skills are holding them back.
- Tech talent retention – on the flip side of a shortage of new employees, there is an increased focus on already available in-house skills and retaining current staff. This means retail leaders and CTOs need to look at making current staff feel gratified and rewarded while even offering them opportunities to train, upskill, and cross-skill in new areas to keep them in their organization.
- Guaranteeing consistency – then there are the overwhelming demands for a consistent customer experience, regardless of their retail channel of choice. This means harmonizing in-store and online experiences for an extremely discerning customer base.
- Technical debt – Legacy systems, often using older hardware and software, do not lend themselves to the flexibility and consistency required for modern retail. This means balancing investment in new solutions vs. rationalizing or customizing what may already be in place.
- Supply chain pressures – Then there are the global factors that can be out of the control of even the best-laid retail digitization plans. Hardware availability can cause project delays and budget inflations – for example, lead times are growing for critical network equipment, including routers and SD-WAN equipment.
Consider this assessment from EY: “Physical and digital retailing will not be an either-or choice.” Given this, it’s hardly surprising that the EY Reimagining Industry Futures 2022 study confirms how external factors have spurred the pace of digital transformation in retail. Seventy-five percent say the COVID-19 pandemic has accelerated their digital transformation plans. As retail activity continues to ramp back up and net out between the digital and physical worlds, there are clearly still a lot of obstacles to navigate for industry technology projects.
New and improved service delivery begins with a centralized data lake
Operational and technological integration forms a key part of this strategy – at the group level across retail, garage, and mobile – to provide a de-siloed and holistic view from a centralized data lake. A sophisticated web platform plays a critical role in this strategy, replacing different sites for different parts of the business and consolidating down to a single user experience. With people cautious about leaving their homes in the early days of the pandemic, we saw online sales figures jump from 20% to 80% of the overnight total. On the mobile and garage management side, an end-to-end service platform, which tracks the skills level of a technician, work hours, and the work undertaken is pivotal.
Uncover the full potential of a CIO and CTO strategy with five critical points
I have found that there are five key strands for retail CIOs, CTOs, and other tech leaders to keep in mind for their digital strategies.
1) Your workforce is the backbone of your business – don’t forget about them
Given the aforementioned talent shortage, this is even more important than pre-pandemic. In-store employees and mobile technicians alike are used to easy-to-operate apps and services in their everyday lives. Any retail digitization strategy should reflect these expectations.
This means designing and choosing the right devices, apps, and portals that deliver the right information and the right services to the employee in question – allowing them to execute their task and log information quickly and effectively. Pass on this ease of service to your workforce, and the benefit will be passed downstream to customers as well.
2) Keep the customer in mind, always
This is easy to say but harder to actually achieve from a technology perspective. This applies not just to the end result of digital transformation programs but during design and implementation as well.
Customers still need to access your products and services throughout the course of a digitization strategy, so this needs to be factored into planning, testing, and roll-out. There also needs to be no disconnect between colleagues and customers when it comes to using the technology deployed.
3) Data is just data until you actually understand it
It’s all fine implementing smart devices across stores and service operations, but retailers – particularly large group organizations – are missing a trick if they don’t harness data from all channels. Disparate pockets of data can lead to inaccurate analysis, and that could mean leaving revenue on the table and less optimal tech performance for employees and customers.
This is where deploying in the cloud can help with data collection, analysis, and action – giving retailers a single picture of the truth, governance, ownership, and control over every data stream across operations.
4) Pick and choose what works best for you – modularization is the way forward
Gone are the days of big monolithic retail implementations. APIs, microservices, and modularization are the way to go for modern cloud-based retail software implementations. This means retailers can pick and choose what solutions make sense for their business goals, keep implementation times down, but also make sure they are keeping that digital thread of data at the core of their business operations.
By enabling the software platform to split into a suite of software products that can be deployed for mobile service, or in-store/garage processes, the organization can alter the platform depending on the needs of the retail organization.
5) New tech is there to help – use it
The advantage of this modular approach is the ability to quickly introduce new technologies and processes across the organization into the future. Manual processes or legacy technology is very difficult to adapt and even more difficult to automate.
Again here, cloud-based deployments can be easily enhanced with additional functionalities such as artificial intelligence. Dynamic job/technician scheduling or dynamic pricing can be overlayed on top of existing systems to increase efficiency and profitability from every customer interaction.
Keep collaboration strong in a whole ecosystem of retail technology providers
The aforementioned EY report also found that nearly two-thirds of participants felt that collaboration between their business and technology vendor has been made tighter as a result of the COVID pandemic. It cited, “However, if they are to get to where they need to be at the required pace, it is simply not possible to recruit or train the right talent fast enough. They will have to find alternative ways to get the skills they need — and collaboration is the only feasible option.”
So as more and more organizations embark on the journey to digitization, it’s clear to see that integrations and collaborations with technology providers will be pivotal. There’s no denying that the role of the CIO has well and truly evolved – but it begs the question: should the role of the Chief Information Officer should now be renamed Chief Integration Officer?