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“Freeze and squeeze and looking for a release”
A sector under pressure in transformation – step by step to a new perspective.
Whether you stroll down a busy shopping street or scroll through digital e-commerce platforms, it is difficult to not consider the challenges facing the retail sector. Roland Berger, a well-known research agency, has investigated which factors influence the purchasing habits of consumers. This research took place before the customer was confronted with increasingly high inflation. The five most important topics on the agenda are clear: 'Value for money' is still at the top, followed by quality, while price remains a constant third. Following these, sustainability and ease of use are joint fourth. Branding, though once a high priority, now occupies the last position when it concerns budget spending.
To attain a top position in the market it is especially important to have a good insight into the finances, all cost components and sales trends. It is also important to optimize the logistic value, know where your product originated from, together with fast and efficient delivery to the customer, in both a physical and an online environment. Particularly the last strategy demands an entirely different organization, which is strongly based on data and much less on gut feeling.
Surviving through challenging times is now often the main concern, linked to an indestructible optimism, which characterizes the retail sector. The sector is also skilled at achieving much with limited resources, the gigantic advertising budgets have in many cases already been smartly transferred to social media, influencers and a more personalized approach.
Yet, overhauling the fundamental business processes of a retailer isn't something that can happen abruptly. Operating on a 24x7 basis, the business cannot simply shut down to replace all the outdated systems with a new infrastructure, spanning from administration to logistics, HR, and stock control. Larger retail companies often belong to the early innovators: we have long been accustomed to making decisions in an environment with small margins based on data in every department within the company. However, the transition to digital and in-store environments brings new challenges. How can you provide the critical consumer with insight into the origin of your product? And how can you offer services that perfectly fit with your brand?
Crucial core systems don't necessarily require a complete replacement merely due to outdated technology. Just as one wouldn't discard an entire automobile when the gasoline engine can be substituted with an electric one. Collaborating with the right partner, who takes the business as a starting point, can yield significant improvements.
Thinkwise has helped several businesses from the retail sector with vital transformation processes, including Omoda. During the Thinkwise Summit, the IT event for the retail sector last October, Omoda CEO Jan Baan shared his experiences about their project.
The Summit was all about building a 'never legacy enterprise': with regard to the technology, culture, talent and eco systems with which you work. Never to be dependent again and to be able to determine your own future with regard to the technology that is so important as the engine of all the data that you need every day to progress to the next level. Transform to ‘never legacy’ and become a ‘never legacy legend’. Step by step, with quick wins on subprojects and a keen eye on the costs. ‘Don’t just survive – thrive’.