Have you ever found yourself browsing Netflix in search of the TV show or film that fits perfectly with your mood? Even with nothing at stake, it’s often difficult to decide what to watch. We’re so overwhelmed by the plethora of options that we end up paralyzed — unable to get up off the sofa, but not willing to commit to an hour of viewing time because it might not be the correct choice.
This happens in other aspects of our lives, too — e.g., pairing a tie with a shirt, deciding on a particular flavor of ice cream. Choice is difficult. Twenty years ago, psychologists Sheena Iyengar and Mark Lepper conducted a study to determine if a wider array of choice led to an increase in sales. They set up two jam tasting booths at a grocery store, one offering only six flavors, the other offering 24. The results showed that those presented with the choice of six products were 10 times more likely to buy than those with 24 on offer.
Therefore, when it comes to television shows and jam flavors, a surplus of choice may lead to an inability to make a decision.
Now consider that you’re the owner of a retail store, looking to make a significant investment in technology for your business. This decision has huge ramifications and you have very little time as the market moves so fast. There are also more than a hundred solutions and technology partners available in any given area — from payments, to delivery, and from email marketing to your e-commerce storefront. It’s no wonder then that a recent Retail Tech Stack Report found that 41 percent of businesses simply abstained from making a technology investment last year due to an overabundance of choice. Furthermore, 51 percent of retailers said they didn't have the time or expertise to confidently select a technology vendor.
Decision making paralysis is a dangerous thing for retailers, particularly in the current climate, which is forcing the adoption of new business models in order for merchants to thrive. Those that failed to make the correct technology investment last year have found themselves ill-prepared for the massive shift to online shopping over the past six months and, consequently, many have been forced to close temporarily or, worse, fold altogether. Even some well-established household brands were caught by their inability to sell online and ship products direct to consumer, and have been reporting massive losses, while scores of independent fashion boutiques without any infrastructure in place for an e-commerce store have also gone under.
However, there are notable examples of brands that have been able to pivot online and thrive during the pandemic. This is due to their previous investment in agile technology platforms that support multichannel commerce. Since lockdown began, hair and beauty company CoolBlades has seen an incredible 650 percent increase in sales vs. the same time last year. The brand attributes much of its success to its ability to handle the exponential rate of demand, on account of its investment in a digital operations platform that allowed the team to manage thousands of orders across multiple online channels without missing a step. Without the right technology, CoolBlades claims that like many others it would have had to close its doors during the lockdown.
COVID-19 has taught us a number of lessons, including that the correct technology can prepare retailers for any eventuality, but a lack of investment can be a death knell to brands.
The health crisis is forcing retailers to act much more quickly than they normally would, and entering into technology partnerships will become increasingly common. A quick glance at Shopify's recent sales surge shows some merchants are rapidly adapting operations to survive the coronavirus. In the post-lockdown landscape, it's vital that brands make considered decisions with a view to the long term.
In an era of rapid change, flexible, quick-to-deploy technology stacks that can support multichannel commerce will be vital for brands to respond quickly to drastic flux in their environment, including the potential for a second wave of the virus. Navigating the post-coronavirus landscape will be a complex time for retailers, but the one thing they can no longer afford to do is be paralyzed by choice. The time for action is now.
Derek O’Carroll is the CEO of Brightpearl, a digital 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: COVID-19: Why Long-Term Tech Investment Pays Off
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.