The accelerating pace of innovation has forced retailers to rethink their strategies and the ways they manage their businesses, from the supply chain to customer engagement and beyond. Game-changing technologies continue to reshape the retail landscape driven by increasingly demanding modern-day consumers and emerging technologies. For example, modern online shoppers not only expect a frictionless online shopping experience, but they also demand a quick and easy checkout process and even faster (and free) delivery. However, winning the retail race is no longer solely about delivering a seamless and frictionless customer experience across all channels. Retailers need to be more agile and create a strategic differentiator that will make them stand out from the crowd while ensuring that the cost of doing business remains low and margins remain as high as possible. This article explores four common barriers to innovation and strategies to overcome them.
Legacy Systems Are Holding Retailers Back
The hidden costs of maintaining archaic legacy systems can quickly become burdensome, leaving no budget for innovation or digital transformation. According to Retail Operations Insights, over 60 percent of retailers still rely on spreadsheets and other outdated processes to run their businesses. Due to their unreliable and repetitive nature, spreadsheets are known productivity killers. What’s more, retailers often end up spending more over time to maintain and operate legacy systems than to upgrade to modern ones. Legacy systems are also more vulnerable to security risks. Investing in modern, integrated foundational retail solutions is an essential step to help retailers get on the path to innovation.
Failing to Master the Art of Promotions is Eroding the Bottom Line
A recent study from RSR Research found that 73 percent of retail winners believe that continuous promotional activity has cut into their discretionary budget. When done right, however, promotions can drive market share and profitability. Sadly, retailers often lack the ability to effectively manage promotions that drive in-store and online traffic while ensuring that profit targets are still met. Investing in a feature-rich promotion management solution that automatically calculates the financial impact of future promotions can help attract new and existing customers and reduce excess inventory.
Stubbornness and Narrow Mindsets Maintain to the Status Quo
RSR Research found that 62 percent of retailers agreed there were numerous cultural barriers to innovation, including the now infamous “this is how we’ve always done it” mindset. Forbes found that this phrase actually contains the seven most expensive words in business, where the only constant is change. Retailers should never rest on their laurels, but instead constantly search for new ways to both surprise and delight their customers. For instance, by failing to properly forecast customer demand and optimize assortment and allocation planning, retailers bleed profits needlessly. Investing in integrated retail solutions can help retailers harmonize their core business processes and remove inefficiencies enterprise-wide.
Not Taking Enough Risks is the Riskiest Move of All
The reluctance to take risks is another common obstacle to innovation most retailers face. When Steve Jobs first introduced the iPhone in 2007, Microsoft former CEO, Steve Ballmer was convinced the iPhone had no chance to get any significant market share, and many industry experts shared his opinion. The iPhone became Apple’s bestselling product shortly after and its success proved its merit. To remain relevant, successful companies must have the courage to take risks, as they are often well worth the potential rewards.