Wednesday, October 15, 2008

The Next Wave of Innovation in Retail

Published: July 20, 2007 
By Dan Rasmus
 
 
Enabling Success

Combining people's abilities and knowledge with IT solutions helps retailers grow profitably and operate efficiently.

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Throughout history, the buying and selling of goods and services has been the quintessential person-to-person transaction. But as retailers become more global and sophisticated, the core of what they do—merchandising, store operations, supply management, finance, marketing, and human resources—becomes increasingly automated to drive efficiency.

Although technology provides business with a technical framework for success, retailers know it is their people who ultimately enable them to succeed. It’s the ability of people who recognize technology’s potential to connect them better with customers that leads to innovation in retailing. And it’s the combined knowledge, capabilities, and ideas of people, along with technology solutions, that are helping retailers grow their companies in an ever more challenging environment.

Globalization, regulation, technology, and other sweeping changes are presenting retailers with a new set of demands and opportunities. Those merchants best able to ride this wave will be those who empower their people to add new value.

Informed Executives Drive Operational Excellence
The retail enterprise today produces a flood of data drawn from every corner of the business. The challenge today is to extract clear insights from this data to produce better business decisions. The challenge tomorrow will be to produce innovations in the retail business through merchandising, store operations, supply management, finance, marketing, and human capital investments that produce competitive advantage. The key to this wave of innovation is the availability of powerful tools and technologies, seated in a culture of innovation, that enable people to drive innovation and accelerate change.

The key … is the availability of powerful tools and technologies, seated in a culture of innovation, that enable people to drive innovation.
INSTANT INSIGHT

Retailers often are the first audience for new merchandise. They need to make the right decisions about marketability, pricing, and promotion in advance of hard data from customers. Fortunately, most of the necessary data already exists in internal and external repositories.

Today’s challenge is to integrate information from those systems and create a complete picture for planners. Leveraging interoperability standards, executives will be able to overlay expansion plans on maps, sales forecasts, and advertising and marketing budgets to visualize how the impact of new growth will ripple through their business functions. Meanwhile, systems will provide interactive ways to change planning assumptions and conditions to create robust models for future growth, which can reduce risk and uncertainty.

With more precise tools for planning, retailers will be able to target growth markets and invest capital with greater confidence. They will also be able to better prepare for contingencies that may arise while managing turbulent growth processes more closely.

Investing in Human Capital
A retailer’s best representatives to the public are the people with greatest knowledge of the organization, the products and services, and the tastes and preferences of its customers. However, as retailers are acutely aware, it’s often difficult to attract and retain high-performing employees in customer-facing roles. Knowledge management and collaboration technologies used in other industries offer some theoretical value in spreading good practices from high-value employees to the rest of the work force. But for these technologies to be useful in retail, they need to become more accessible and convenient.

With more precise tools for planning, retailers will be able to target growth markets and invest capital with greater confidence.

The use of next-generation mobile devices can help transfer best practices to retail associates on the sales floor, in direct engagements with customers, and in the back room. Workers with mobile devices can access not only information and business systems, but also the expertise of colleagues via instant messaging, application sharing, and online meetings.

As mobile devices continue to spread, retailers will be able to provide even higher levels of convenience and connection to customers on the sales floor. Retailers can furnish location services such as store maps to customers’ mobile devices, where they can integrate with shopping lists, loyalty programs, and other data. Customers can even make their selections and have their accounts debited automatically as they leave the store.

Customers want a shopping experience built around their needs and reflecting their lifestyle. New technology can help retailers provide that kind of excellent service by empowering people in customer-facing roles to anticipate customer needs and use resources more effectively. In apparel, for example, new 3-D body scanners are not only improving the precision and privacy of measurement, but also helping customers find the right brands and sizes for a better fit.

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