The last some years has been nothing less than a train wreck, and a traffic pile up put together. Things seem to look up for a bit and then go down into the dump. Maybe, its a W-shaped recession after all. But there is a bit of a silver lining.
Retail will have a very different shape in the next decade. How should the CIOs of retail companies prepare? Here are some pointers from my experience interacting with Retail CIOs worldover for about the last seven years.
Proactive alignment with business
IT not always being aligned with the mainline business has always been the bane of many a CIO organization. Right now is the opportunity to make the change. CIOs must choose to drive leadership in IT areas which directly add to the company value propositions, and not wait for business to set direction and strategy for IT.
Act local, think Global
All retailers must think of the world as their consumer base. Thinking global does not necessarily mean proliferation to the scale of Starbucks in which case you could see half a dozen starbucks signs standing any stop lights in downtown AnyCity in the US. The Body shop is a fairly decent example, and so is WHSmiths in gradual global expansion, and reducing overall risk by placing the eggs in different baskets. Of course, this needs the processes and systems to support such geographic diversity and this is where the CIO comes in to play a major part. In some geographies e.g. India, most of this progress will be through JVs, and the CIO plays a part in integration and adapting to local IT needs
Consumer and demand driven
Retailing is slowly becoming, and will completely be Customer driven rather than merchandise driven. The hammer and nail syndrome will have to go away. As shake downs happen, the retail geography changes. New specialty, and information driven retail comes to play very strongly. Here are two examples – Airtel is the largest seller of music in India today. Best Buy’s largest competitor perhaps is Amazon, and not other brick and mortar set ups (now that Circuit City is history). Better understanding the customer behaviour is what will make the difference.
Out of the box
Time to think differently, time to adapt and bring forth disparate step changes in technology. Retailers who are able to harness technology for bringing in innovation will see progress. Technology which brings in quick supply chain squeeze, inventory handling or deliver top-line increase will see being adapted, and CIOs need to be ready to move rapidly.