Adapt or perish, now more than ever, is a retailer’s imperative. Stores today face new customer expectations, new competitive business models and new technology options at a scale not experienced since the birth of the Internet. Those who innovate, invest and engage customers in new ways will prosper. We all know what happens to those who do not.
A big part of adapting to today’s everchanging retail environment is creating an effective IT strategy and seeing it through to the end. IT must be managed as a business strategy enabler and be evaluated on how cost effectively it provides a long-term platform for the delivery of the in-store strategy, not simply on how it can fix the latest fire drill. Retail IT solutions need to be evaluated on how they can enable the store strategy, and how well they equip the business to manage escalating rates of change, particularly in customer engagement models. This requires a longer-term view of investments and their ROI. And in many cases, the software defined store approach which incorporates edge virtualization with intelligent automation can serve as the answer for retailers’ needs, here is why…
Adapting To Evolving Customer Needs
New customer engagement models including frictionless checkout, mobile POS and “scan and go,” are all designed to eliminate lines, speed up transaction performance and improve the experience for both the customer and store associate. To achieve this with traditional IT is not easy. The application must be secure, which always presents challenges when mobility is involved, and integrated with existing POS, peripherals and back office systems. The challenges can seem insurmountable. But with a software defined store solution, the POS application can be adapted to run on the edge server, freeing up the ability to run the POS application on multiple devices, such as a mobile tablet, anywhere in the store. The edge environment can be securely integrated with the back office and required device peripherals such as barcode scanners, magnetic stripe readers and receipt printers.
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As the retail world constantly evolves, retailers are searching for new ways to engage with customers, making the shopping experience more convenient and engaging. For example, according to Boston Retail Partners, many retailers are prioritizing the checkout experience as a top customer engagement priority, with 62% of retailers planning to increase their use of mobile devices as the POS by the end of 2019. Checkout is just one example of new engagement models that can be facilitated via software defined store approach. Others include loyalty applications and experiential shopping involving AR and VR. But what is the best approach to make these new engagement models happen?
Moving Away From A Device-By-Device Approach
Traditional store IT is device-based, delivering a new application with it’s operating system, one by one. However, this has led to a proliferation of in-store IT hardware and software, escalating maintenance costs and a support nightmare. For example, if a retailer wants to roll out an upgrade or new application across hundreds or thousands of stores, the time and cost involved to install, maintain, integrate and manage existing in-store servers and peripherals is prohibitively expensive. With traditional investment strategies that focus on device-based solutions, each project is evaluated and justified purely on its own merits, with no view as to what other future business opportunities it will enable. In addition, it is rare that the long-term support costs are fully evaluated.
Moving to a software defined store strategy provides the solution to this strategic need. It involves implementing automated edge IT and, once that initial step is taken, new needs are met by simply deploying new applications to the edge. It delivers the flexibility, innovation and IT cost optimization that retailers need, and provides a long-term platform for business optimization — be that from capex and opex reduction, customer experience or process rationalization..
Agility In The Face Of Change
The rate of change in the retail industry is currently so great that it is impossible to predict which methods of purchasing and checking out, and which new in-store technologies will be needed in two years’ time. What retailers can predict is that new in-store capabilities will be required, and that an approach to IT that enables innovative new capabilities to be deployed quickly is and will continue to be essential. The IT imperative is to build flexibility into the solution so that new, yet to be identified requirements can be met without massive costs and store upheaval.
With edge virtualization, retailers benefit from immediate cost savings and operational efficiency. New applications can be rolled out swiftly in every store from a central control point, a singular view of store technology speeds up diagnosis and resolution of issues while reducing the volume of costly site visits, and a move away from single-application devices to a leaner environment will result in savings in capex and opex costs for every store. Consequently, the retailer has flexibility and adaptability built into its core and becomes a competitive asset for the business. By breaking the relationship between hardware and software retailers also benefit from resolving the operating system End of Life challenges such as legacy endpoints being incompatibile with Windows 10.
If retail store IT investment continues to be deployed on a stand-alone project by project device-orientated basis, then the right steps will not be taken to put in place the platform that is needed to optimize cost and, most importantly, the customer experience. The gap will only widen between what the customers want and what the store can deliver. To put it another way, when you look at store IT investment, you have to see the movie through to the end, and not make your call after the opening credits.
Nick East is co-founder and CEO of Zynstra, the award-winning leader in purpose-built retail edge software. East’s in-depth work with major retailers gives him a deep insight into the challenges retailers face and how new, innovative in-store technology can transform customer experiences and cost efficiency. His forte is to focus on retailer business issues, particularly in the prevailing challenging, omni-channel environment, and to explain how new advances in technology can offer new and exciting ways to address them. Prior to Zynstra, East was GM for the OSS Division at Amdocs, leading a global team of 500 people and driving the strategy for the company.
