How Retailers Measure the Success of a Technology Implementation
With all of the different technologies that retailers are using throughout their businesses, from in-store to distribution centers to their websites and apps, and more, it's critical that they have a system in place to evaluate the business benefits such solutions are providing them. That information is necessary to inform both current and future spend on technology investments. So what are the criteria that retailers are measuring when evaluating a technology purchase?
That was just one of the questions Total Retail answered in its latest research report, The 2017 Retail Technology Report: An Analysis of Trends, Buying Behaviors and Future Opportunities. The report, which was produced in conjunction with Radial, features the results of an online survey conducted over a two-week period about, among other things, how companies are handling the research, buying and implementation of new retail technologies. The survey received a total of 177 respondents.
As one would expect, increased revenue (62.87 percent) and cost savings (50.30 percent) are the top two metrics respondents believe are most important when evaluating the success of a technology investment. Actually, it’s surprising that these numbers aren’t higher. What impacts the bottom line is going to hold the greatest weight.
What’s interesting about the responses to this question is the order of priority for the other metrics on the list. For example, efficiency gains were the third most-cited metric (38.92 percent), followed by increased customer engagement (26.95 percent), increased customer retention/loyalty (27.54 percent), increased traffic (26.35 percent), and brand awareness (16.77 percent). Customer retention/loyalty seems to be a lower priority than it should be, as your most loyal customers are usually your most valuable customers.
Tips for Measuring the Value of a Technology Investment
With increased revenues and cost savings the benchmarks for nearly all retailers’ technology evaluation processes, here are four questions retailers should be asking themselves when determining the ROI of a technology implementation, courtesy of TechSoup Global:
- Do I understand what improvement this investment will result in and/or the problems it will solve? Core to measuring ROI is knowing what it is that you have to measure. That will be some quantifiable amount of anticipated revenue, productivity gain, staffing reduction or increase in clients served. You should know what those metrics are at the start of a project.
- Have I thoroughly considered the staffing changes that this investment might enable or require? For any large investment, you want to know up front how your day-to-day operations will be impacted. A new system might automate laborious processes, allowing you to repurpose staff. Or it might well require additional staffing in order to maximize the return. Those costs or savings are a key factor in the ROI.
- Do I have the necessary buy-in from the C-suite that will result in a successful implementation? Key to any large project's success is having support from key decision makers. If you're in middle management, and your initiative isn't well understood and appreciated by those in charge, then there's a significant chance that the project will fail. As right as you might be that your organization would benefit, again, the ROI requires that the organization is invested.
- Have I identified any required training and ensured that we have the resources and time to provide it? So much of the value in a new system is derived from people knowing how to use it. Devote employee training time for the new technology, because what you get out of a system is all contingent on being able to use it well and strategically.
The 2017 Retail Technology Report serves as a valuable resource for retailers looking to learn more about the technology landscape within their industry. In addition, service providers to the industry can gain insights into how they can better serve their clients. You can access the full 2017 Retail Technology Report: An Analysis of Trends, Buying Behaviors and Future Opportunities, by downloading it here.
Related story: The 2017 Retail Technology Report