COVID-19: Why Long-Term Tech Investment Pays Off
In the face of rapidly changing consumer lifestyles and shopping habits, businesses are finding the need to pivot quickly to stay competitive in today’s landscape. Digital transformation is something we’ve been talking about for a long time in retail, but many brands swifty moved online, seemingly overnight, once they realized this is how they would stay afloat. A quick glance at Shopify's recent sales surge shows some merchants are quickly adapting operations to survive the coronavirus.
However, many others are faced with the burdens of legacy — e.g., on premise ERP systems which stand in complete contrast of retail innovation, speed of deployment and modernized functionality, which are essential in these challenging times.
Leading analytics company Forrester even talks of the new era of the digital operations platform (DOP), where antiquated ERP systems are being phased out by next-generation DOPs that are better suited to modern digital business. This is crucial in the current climate because DOP systems offer flexibility to rapid changes in demand and integrate with other aspects of your business. Furthermore, they're built for speedy deployment to enable merchants to react quickly to the coronavirus challenge.
Planning to Fail
The lack of innovation, long-term technology planning and investment is a retail dilemma. One of the most surprising statistics to come out of Brightpearl’s Retail Tech Stack report was that one in three retailers either do not have or are not aware of their business having a long-term IT strategy.
PA Consulting found that 66 percent of executives stated they had made little to no moves towards making the innovative changes they felt their business needed to survive. This coincides with another concerning statistic pulled from the Brightpearl study which highlights that more than half of American retailers (51 percent) admit they don't have the time or expertise to confidently make major software investments.
Even at the best of times this presents a problem, but given the current retail climate it represents a catastrophic oversight. Multiple chains and categories have gone dark because of the lack of technology planning and investment, combined with a reliance on legacy ERP, which impairs the ability to operate across multiple channels.
In this climate it’s more imperative than ever that retailers are agile and invest in the right technologies to support greater flexibility, such as the ability to enter new markets with minimal investment or to test new business models to help them weather the storm.
However, even brands making the switch to the online direct-to-consumer space should understand that this channel is going to expand past what they previously had. When you’re operating in different markets and you’re scaling quickly, you’ve got to have the right retail operations in place to respond effectively. Without those mechanics, for example, to handle inventory, shipping and logistics across multiple channels and locations, or for more real-time customer-facing support, the business is quickly going to run into problems.
Tech Investments Pay Off
All merchants, no matter how digitized, need to look beyond COVID-19 and start thinking about what the future may look like. This is a perfect opportunity to take the time to really evaluate your tech stack and assess the operational pain points within the business that could be addressed.
Brands should take lessons from this pandemic: tech investments pay off. Retailers that have invested in their operations to support real-time visibility across channels are faring much better than those that didn’t, as tactics like curbside pickup prove to be survival factors.
Those brands that ultimately thrive post-crisis have, or will be implementing, long-term IT strategies that are underpinned by intelligent retail technology which form the building blocks for multichannel growth and success.
Derek O’Carroll is the CEO of Brightpearl, a retail operations platform for retailers and wholesalers with a clear mission to automate the back office so merchants can spend their time and money growing the business.
Related story: 2020 Retail Technology Report
Derek O'Carroll is CEO of Brightpearl, a cloud-based ERP for retailers and wholesalers. Recognized as a leading retail expert, his mantra is to deliver on Brightpearl’s mission to automate the back office for today’s merchants.
Brightpearl is a retail operations platform for retailers and wholesalers with a clear mission to automate the back office so merchants can spend their time and money growing the business. Brightpearl’s complete back office solution includes financial management, inventory and sales order management, purchasing and supplier management, CRM, fulfillment, warehouse management and logistics.