Editor's note: In what we plan to make an annual end-of-year tradition, RetailWire has compiled a list of the most significant retail industry "Turning Points" of 2008. (See our news release...) What follows is the fourth in a series of 12 discussions based on the list.
Each April, the Information Technology Research Institute of the Sam M. Walton College of Business publishes the results of their survey of retail IT executives and technology vendors regarding priorities for the coming year. As we look back on 2008, it is interesting to compare the technology events that appeared in RetailWire against the priorities set by these business executives. This was the list: (The parenthetical comments are mine.)
- Corporate Strategic Planning (Align IT with business)
- Speed of Business/Project Management (Time, money, scope ... pick two)
- Increase IT Majors (Technology must be nurtured)
- Impact of Economy (Some things are beyond our control)
- Security and Privacy (There is always someone out to get you)
- Business Intelligence (So much data, too little information)
- Innovation (Stay one step ahead)
- Increasing Diversity (One person does not have all the answers)
- Organizational Change Management (Adapt or die)
- Governmental Regulations and Compliance (Another thing beyond our control)
To some extent it seems that the challenge has not been to create the technology, but rather to tame it. Retail managers are focused on getting results from investments in both new and existing technology. The irony is that, often, to get more from existing technology (e.g. POS scan data) you have to buy more technology (e.g. Business Intelligence Software).
The RetailWire subjects referenced during 2008 seemed to bolster this theme. Three of the articles focused specifically on IT budgets. One of the budget discussions included a full-scale make over, but the majority focused on tactical benefits from applications geared to labor utilization, fresh department management, and interpreting results (Business Intelligence software). Pricing applications came into maturity as more chains turned over routine margin maintenance to automation. Others realized that reducing waste in their operations was a win/win as "green initiatives" built trust with consumers and reduced expenses.
As efforts to target individual consumers intensified, customer-facing technology seemed to return mixed results as customers continued to embrace self-checkout while pushing back on RFID in dressing rooms. The most exciting consumer item I saw really came from researching the responses to the demise of biometrics at Supervalu. Biometric cell phones that assure they're in their owner's possession can present payments (and coupons) to POS systems. Integrating multiple channels to the consumer and ensuring internet, catalogue and in-store experiences are coordinated and complementary seemed to be finally coming together.
RFID was mentioned several times, but the glamour seems to have died and the hard work is underway. Closed loop applications for asset, pallet, and tote tracking seem to be the emphasis as retailers learn how to get the most from this new technology while costs continue to decline. But the implementation of Business Intelligence Software and/or Demand Signal Repositories means that retailers are building the data storage and application platforms needed to glean intelligence from the huge volumes of data which will be collected through RFID.
Discussion Questions: What are the technology events you feel marked 2008? Which 2008 technologies will have the largest impact on operations in 2009? What opportunities will be traffic and revenue generators?
[Author's commentary] 2008 may turn out to be the year when many retailers laid the foundation for taking advantage of new technology. You shouldn't underestimate the impact of pricing applications and the insight gained from timely scan data. In this chaotic economy, retailers can't always keep up with rising and falling merchandise costs without help from automation. Fast changing tastes and new styles make proper assortment planning through business intelligence software imperative.
2009 does not portend to be any less hectic, but the retailers who have set the foundation in 2008 will likely experience the benefits of their investment in technology. Technology is the benevolent king that will lead them through the confusion.