Retailers struggle to move forward on e-commerce because their legacy technology stack is acting as an anchor, according to a sneak peek at RSR Research’s e-commerce Benchmark report.
Even as retailers stop panicking over giant competitors like Amazon and Alibaba, they continue to suffer from organizational silos and dated technology. While organizational silos are seen as the biggest barrier (we all know, thanks to Steve Dennis, that silos belong on farms!), existing technology infrastructure was a very close second barrier for winning retailers.
And while winners are even more cognizant of the problem, they still haven’t figured out how to modernize their operations across selling channels. As RSR said, “It just means they aren’t averting their eyes from an inconvenient truth any longer.”
From the conversations I have with retailers, I was not surprised about these findings. However, what did surprise me was the perceptions the retailers surveyed have about how to overcome these issues. I would have expected implementing a new e-commerce platform to be much higher (for overcoming inhibitors) than sixth on the list.
While the fourth highest priority was executive ownership, four of the top five ways to solve the issue were focused on technical infrastructure and improved coordination across channels, supply chain and marketing.
While such coordination relates to the issue of organizational silos, technical infrastructure often relates directly to silos within the organization. Simply lacking the ability to view what is happening across the business makes coordination difficult and can actually reinforce the silos.
These issues are complex and interconnected. RSR noted: “Each of these challenges stems from the same place…they simply went too long with legacy technologies and practices, constantly hoping to eke out one more year.”
For the past 150 years retail has changed little – a linear flow of product and only one channel. Ecommerce changed that. It is a new business model – in relative terms. We are all still learning.
New business models take time to be supported by standard software solutions. They require connectivity and orchestration across multiple systems, combined with additional logic in order to deliver what is needed.
Over the past four years I have been lucky enough to work with some of the world’s most progressive retailers who have adopted Software AG’s Digital Business Platform in order to solve these issues. Designed specifically for this task, the platform connects systems, people and things in real-time in order to streamline, automate and provide intelligent visibility. This is exactly what is needed when innovating with a new business model.
There is still a lot of work to do and RSR concluded: “This resistance to change and investment has come back to haunt them with very real consequences - those who cannot (or will not) adapt right now will be hard pressed to survive.”
To understand more about how Software AG is helping the world’s largest retailers adapt, please visit www.SoftwareAG.com/Retail.