Is outdated technology destroying your retail business? 9 red flags to look out for

Your retail management system serves as the backbone of your business, ensuring optimal efficiency and seamless operations across all aspects of your company. It enables you to provide exceptional services and experiences that not only meet but exceed the expectations of your customers. However, it is disheartening to see numerous retailers rely on outdated legacy IT systems.
Often, these patched-together systems can’t sync information properly, are hard and costly to maintain don’t allow retailers to deliver the services that consumers demand. Although many retailers are afraid of the investment required by a new system, outdated tech may be already costing them more than a complete technology overhaul. Are you, like many retailers, losing competitiveness because of your outdated software systems?

We have compiled a list of the top red flags you should look out for

If two or more of these points hit home, it’s time for a technology overhaul.

1. You can’t accept product returns across channels

Today’s consumers browse and shop on multiple channels, and they expect to be able to return purchases the way they like, too. According to a study by Forrester Research, consumers demand simple and easy returns, and the ability to return items bought online to brick-and-mortar store locations. "There are a lot of people who don’t even bother returning [products] because it’s such a pain, and when they don’t bother returning, they just don’t shop with you again,” says Sucharita Mulpuru, retail analyst at Forrester. 

Ask yourself: Does my current technology enable me to offer customers the ability to buy online and return in-store?

2. You can’t offer click-and-collect or alternative pickup options

In today's competitive retail world, offering services like click-and-collect – also known as BOPIS, for Buy Online and Pick up In-Store – or curbside pickup is vital. Such services blend online and in-store shopping, making it easier for shoppers to get what they need when they need it. These options also benefit retailers, as they can lead to more sales since customers often buy extra items when they pick up their orders. 

Ask yourself: Am I missing out on both sales and upselling opportunities by keeping my e-commerce and physical locations disconnected?

3. You regularly oversell items

In many retail chains, each store location runs on its own database, and the eCommerce website runs on another platform. When information is saved in separate places, if the systems do not communicate with each other in real-time, there is a very high chance you might sell an item on your eCommerce website even if the product is actually out of stock. At that point, you’ll have to inform the customer you can’t deliver the item they bought – losing the sale, and perhaps, the customer’s trust. 

Ask yourself: Do I have out-of-sync, siloed information? Is inventory information updated too seldom, causing a stale view of inventory and overselling?

4. You don’t give customers visibility into the inventory

According to the IBM Institute for Business Value, two out of three consumers now check product availability before heading out to shop, indicating a shift towards purposeful shopping trips. This means that if retailers fail to provide visibility into their inventory, customers may choose not to visit their stores. Shockingly, only around one-third of retailers offer accurate product availability across store locations, and 45% provide no access to inventory whatsoever, as reported by Sapio Research. The lack of visibility doesn't just affect consumers; it also hinders store associates, with less than 15% of retailers offering effective inventory visibility across channels, according to BRP research. Consequently, sales staff cannot inform customers whether an item they desire is in stock at another store location or offer suitable replacements on the spot.

Ask yourself: Do I force shoppers to make the trip in person to find out if a product is available in my stores? Can my sales associates help consumers, by looking up product availability in other locations?

5. You waste a lot of time on manual tasks

You’d be surprised at how much time is spent on doing manual tasks that could be digitized. EKN reports that two out of three retail professionals are still forced to spend time completing physical paperwork during store visits! All these physical documents must then be analyzed and transcribed, manually – leading to further waste of time and risk of errors. Crocodile International, one of our customers, told us that their accounting staff used to spend many hours at the end of each month manually verifying inventory figures against sales orders. They were forced to because of legacy systems that didn’t communicate with each other. The delayed transaction postings also made them unable to know exactly how much stock was available at a given time. 

Ask yourself: Am I wasting a lot of man-hours with manual entering and double-checking of data?

6. You can’t recognize customers across channels

To engage customers effectively, you need to be able to identify and follow them across various channels and touchpoints. Unfortunately, many retailers manage each channel or store as a separate entity, which makes it nearly impossible to achieve. This leads to duplicate information, incomplete records, and no clear view of each consumer's preferences and behavior. When you don’t know your customers, you cannot design meaningful loyalty programs and rewards, upsell, or offer relevant promotions.

Ask yourself: Can I connect my customers’ data and use it to create personalized interactions? Or is this data locked away in silos and unusable?

7. You can’t get real-time reports

Having a real-time view of your retail operations is crucial for making timely and effective decisions, especially during important events and sales periods. However, running each location as a separate entity can make it complex and time-consuming to connect and compare the performance of each store. This not only leads to inaccurate or incomplete data, but by the time everything is aggregated into a single report, the information is often already outdated. As a result, any business decision made at that point runs the risk of being ineffective and too late to make a significant impact.

Ask yourself: Can I trust the quality of the information I use for decision-making?

8. It’s complex and time-consuming to change prices or implement new offers or promotions

When you are running your business on several separate systems, even basic (but necessary) activities like running promotions and changing prices can become complex and costly. One of our customers, a resort with retail stores and restaurants, told us how with their old IT setup they couldn’t run offers. They were using many software solutions, and since information couldn’t be synced, the company couldn’t track the performance of different products. And without knowing what items sold best and which were slow movers, they couldn’t run effective offers. Even changing prices can be difficult, when your IT setup hinders you. Auto Milovanovic, a specialty retail company selling spare car parts, used to keep its price tables on separate databases and Excel documents. Finding or changing prices was very time-consuming – and since the process was manual, mistakes happened. 

Ask yourself: Can I easily change prices, plan and run new offers, and track the results of marketing activities in my retail chain?

9. You spend a lot of money on system maintenance.

In a recent study by Stripe, almost 70% of UK developers said outdated and custom-built technology systems are holding their businesses back. Over 17 hours a week (almost half of a working week!) are wasted on system maintenance tasks, including debugging, patching old systems and fixing bad code. Stripe estimates that outdated, legacy systems have a negative impact on global GDP amounting to around $300 billion per year. 

Ask yourself: Are some of my IT systems so old that they are not supported anymore? Am I spending so much on system maintenance that I can't afford to replace the IT?  

Most retail leaders who took part in Data Driven’s “Digital Transformation Trends” research say that digital transformation is essential to their retail strategy. To achieve effective digital transformation, retailers must ditch the disconnected, legacy systems limiting their visibility and ability to compete and upgrade to a unified commerce platform. Unified commerce unites all parts of the business within one common platform, which is used across the enterprise, across physical and online stores. When all your key business information – from customer data, to products, to financials – is stored in a single place, it can easily be shared in real time across the whole company.

If you want to learn more about how a unified commerce platform can benefit your business today and tomorrow, contact us.