Retail: Four key challenges in 2023. What are the solutions?
by Barry McKendrick – Head of Retail Practice, HSO UK
A spike, by its very definition, will not last Lockdowns, supplier disruptions, and the escalating cost of living crisis have transformed retail and compelled brands to focus on promoting their core values and overcoming key obstacles.
No organisation is perfect. Some use dated systems that cause processes to take too long or prevent them from providing certain services or add-ons for customers. Others struggle to keep up with ever-changing market demand or generate large amounts of wasted stock.
These challenges aren’t new, nor do they necessarily result in business closures. Indeed, many have been successfully operating despite exhibiting one or more of them. This is no longer the case. The degree of inefficiency that previously may have been tolerated – dare I say, ignored – can no longer be absorbed.
There are four main challenges that retailers are facing:
- Skyrocketing container costs and record lead times have re-emphasised the importance of stock management, supply chain visibility and accurate forecasting.
- High staff turnover and wage increases have reinforced the need to engage with and empower workers.
- Rising inflation and market uncertainty require companies to operate more efficiently and profitably.
- Fragmented views, siloed information, and competing versions of the truth make achieving all these tasks infinitely harder.
Retailers employ numerous IT systems which often don’t, can’t or won’t share data. Many retail companies also grow through mergers and acquisitions, which see additional systems being bolted on.
Consequently, IT architectures are chaotic and confusing; nothing is consolidated, every department speaks its own language, and systems contain multiple versions of the same customer and stock levels.
Little wonder that retailers spend 70% of their time on data collection and only 30% on data analysis.
But there is a better way, and though it sounds simple, it’s a request we receive all the time from retail customers: A single source of truth.
Now more than ever, retailers need to understand their current performance and confidently forecast future demand. Decision-making needs to be swift, decisive and informed by accurate data. That starts by having a single source of truth.
provide staff with easy access to the same information at the right time, regardless of location. It also enables teams to better understand the company’s strategic goals and how their role contributes and empowers everyone to pull in the same direction.
Yet, a single source of truth isn’t solely about having additional or more capable tools, it’s also about changing mindsets to look at processes and business models differently. The importance of adaptability in an increasingly complex world can’t be overstated, especially in retail.
Retail businesses feel the squeeze earlier during times of uncertainty and economic concerns. Their position on the frontline of consumer spending means they must have the ability to flex with fluctuating demand, to handle cost increases and react quickly yet strategically.
We see that the retailers succeeding are those who:
- Embrace innovation and try new things
- Use technology to connect their people, products and processes
- Prioritise agility and responsiveness
By living that same ethos, HSO has risen to be among the top 1% of all Microsoft partners globally, with more than 2,500 successful implementations. We are trusted by 1,200 customers to help them embed a growth mindset across their organisation.
What could you achieve with the right partner in your corner?