Retail Software Modernization
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We are very happy to introduce you to two members of our advisory board Bill Robinson and Diane Randolph. Today we’ll hear them discuss the current state of retail in a post-pandemic world. We hope to offer other videos of this sort in the future.
We hope you enjoy!
Bill:
Hello everybody, I'm Bill Robinson. I'm an advisor at RIBA-AYDEPT and welcome to our first executive insight program sponsored by RIBA-AYDEPT. I’m joined by Diane Randolph. Diane, would you introduce yourself?
Diane:
Sure Bill, thank you. Yes I’m Diane Randolph and I’m thrilled to be advising RIBA-AYDEPT, I recently retired from a little more than 15 years as CIO of two large retail companies and prior to that I spent 25 years in various capacities customer facing at a retail software and services firm.
Bill:
Thanks Diane. And Diane and I have been, uh, studious observers of the retail industry for a long time — in my case it’s actually 55 years and Diane is getting close to 40 I would imagine. So hopefully we know something. Anyway, one thing I do know is that retailing is changing like I’ve never seen it before. Especially with the covid going on. So Diane, as you view it, what are the forces that are causing this change?
Diane:
Sure. Well you know COVID forced a big shift in behaviors, but customers found that some of those elements driven out of necessity are things that they actually like. So some examples of that are a huge shift to online penetration. For many people, it was their first time being an OMNI channel shopper and engaging with the brands that they loved in a digital way. Not only did they become comfortable with buying online, but they also became hungry for those digital experiences that they found brought them convenience that they had never seen before. Some of those behaviors — even when you know the pandemic is over — people will stick to because they really found it brought them value.
Bill:
How about the economics of the situation?
Diane:
So number one: The shift to online has really driven a tremendous amount of margin pressure because those e-commerce sales come at a much higher cost to serve. Controlling that and managing that is really challenging, and as you know, the retailers have not had the kind of tools and data available to them to really manage that. They’ve been doing the best they can. At the same time, there’s also a much greater scrutiny and desire to have stricter cost controls on margins on one side. Then you know cost and expense on the other side are really creating a true challenge.
Bill:
Well Diane, you've had lots of experience as a CIO in this environment. What are CIOs faced with to keep pace with what’s going on all around them and to help their companies be competitive?
Diane:
Well, I think they’re seeing pressure from two different sides of the spectrum. One is that the pandemic taught them that in some cases one or more of their core legacy enterprise solutions was not adaptable to be able to respond to some of the needs of the consumer in this world. So they are going to need to be refreshed and upgraded, and that means a large significant transformation project. Often when that happens, that really becomes the prime focus of the organization because it’s so all-consuming both from a budgetary perspective as well as a total company resource perspective.
At the same time, now everyone realizes they need to up their game in digital engagement things to support curbside pickup. For example, contactless payment in the stores means that they’re also dealing with a lot of smaller niche point solutions and expanding the number of vendors they’re dealing with in a dramatic way. This is just going to make things complicated all at the same time that they’ve got to manage costs and a large portfolio of initiatives with limited resources.
Bill:
That’s really interesting Diane. I bet you’re happy you’ve retired as a CIO. My goodness gracious what a challenge. There’s more work than ever with tighter controls. What’s the reality of what they can really accomplish and what are the internal battles that must be fought while this is going on?
Diane:
Well it’s a challenge for a CIO because they are dealing with so many things at one time. It must be important to know that everything needs to be done through the lens of improving margin, improving the guest experience, and really trying to deliver all of this in a holistic way. This is a huge challenge. You know, when we talk about trying to deal with the reality of a huge online penetration, figuring out the best way to get a product to the customer is of paramount importance. So metrics and data are necessary to figure out where that product should be sourced from in order to deliver the best experience for the customer and the lowest cost to serve for the retailer. Sourcing strategies need to encompass BOPUS, they must ship from store all of the various fulfillment methods, which opens up the door for the need for a tremendous amount of operating metrics. That’s going to be new to the organization: How are they going to make decisions on what to do and what capabilities do they launch first?
Bill:
Well Diane thank you very much. These executive insight sessions are designed to be short, but you’ve outlined several things that we’ll pursue in further conversations but for now we want to thank you all for listening to RIBA-AYDEPT’s Executive Insight session.
