Challenges Ahead
Competitive challenge lies in understanding customer needs, developing insight and building a differentiable experience that enables customers to buy what they want, where they want, whenever they want and in whichever channel they want. The new consumer is armed with better information about products, pricing and promotions; has more options than ever before; and expects a seamless multichannel experience.
Based in Switzerland, Jon McNerney, VP and General Manager, International Operations, Talisma, a CRM solutions provider, believes that there is an increased demand for speedier and more efficient customer response because most businesses including retail are now being worked over the Web rather than over the phone as earlier.
“According to e-commerce consumer surveys about 72 percent shoppers found live chat “very important” to “most important” when purchasing gifts online, just behind the tried-and-true toll free number. Of the 140 million Americans online, 78 percent reported having researched a product or service before buying it,” McNerney says.
Today this type of an integration of multiple channels in retailing is bringing about a greater complexity in IT infrastructure and services. Outsourcers focus on these various channels. For instance, Wipro has built significant competence and set up eight centers of excellence in retailing in areas such as billing, in-store displays, technology at the Point of Sale (PoS), store layout, and the way products are stacked.
“The vendor has to understand not just technology, but also the entire nature of activity, which includes merchandising, replenishment and other related activities. Customers look at not just large-scale development but also more at innovation,” explains Wipro’s Bhanumurthy.
Moreover, there is always an underlying fear in the minds of a foreign retailer. “The longer you outsource, greater the dependency builds up on the outsourcer,” says Vijay Ghei, VP, Retail Practice, NIIT Technologies based in New Delhi, India. “And the outsourcer does not have the fear of failure as the retailer. That is why though there are more outsourcing contracts, there are a lot more clauses that give greater flexibility to the retailer.”
Sharper Focus on the Customer
Although retailers have always focused on the customer — that focus has now intensified. As a result, investment in customer-facing technologies has been trending upward. The issues on top of every retailer’s mind are what role does service-oriented architecture, industry standards and open source have in future retail application, and how should retailers prioritize current technology projects and investments, according to Gartner analysts John Davison and Stephen Smith in Research Agenda and Key Issues for Retail, 2007.
Moreover, the Gartner Retail Industry Advisory Service agenda reflects the priorities identified by their retail clients. It examines critical trends that affect four areas: Store, multichannel and e-commerce operations; merchandising, marketing and analytics; supply chain; and retail trends.
“Today’s retailers find themselves challenged as they use technology not just to cut costs, but to make money through enhanced multichannel customer experiences. In-store technologies like selfcheck-out, point-of-sale terminals, and wireless devices present opportunities for retailers to address consumer service issues and the cost/availability of labor at the same time. Integrating fulfillment, merchandising and marketing across all channels has become crucial,” says the report.
Today, defining the future retail enterprise architecture is one of the biggest retail challenges. “This not only enables a smooth migration from current legacy environments but also provides flexibility for business needs and applications that may not have even been thought of yet,” says Ghei.
