Significant events over the past year – from new industry entrants to continued consolidation and rapid deployment of new ecommerce technologies to meet changing consumer expectations– have ushered in a new era of grocery retail.
Disruption is the name of the game and the new reality in this dynamic industry. While recent changes have certainly created some challenges, they have also sparked a resurgence of the grit and passion for consumers that grocery retailers have displayed for decades in highly competitive marketplace. Recent disruption has also placed IT at the epicenter of grocers’ strategies to remain competitive and deliver the experience consumers want.
Traditional grocery retailers, with deep expertise in operating brick and mortar stores, know that new, innovative technology solutions are critical to engaging a new generation of customers. Until recently, there has been a push relationship between IT and its business partners. CIOs had to push new technology, present potential use cases and negotiate increased investments, sometimes without success.
Today, IT organizations can hardly deliver solutions fast enough. Grocery retailers are clamoring for new technologies to be first to market with innovative consumer experiences.
This change in view of the role of IT and sudden increase in demand are changing the way grocery retail IT organizations function, engage and innovate. Here’s what’s in store for grocery retail IT:
Blurred Lines
The lines between the business and IT are blurring. Today, IT decisions are just as important to the CEO as merchandising decisions. IT leaders are viewed as partners, have a place at the decision table, and are accountable for the success and failure of business ventures.
This new relationship and new view of the role of IT requires that IT professionals be equipped with more than technological expertise. They need strong business acumen too. If IT organizations ignore their new charge and role in their organizations, a consequence may be “shadow” functions.
At Retail Business Services, in order to deeply understand the local brand companies that are our clients, we’ve set up brand relationship manager roles to ensure that IT is closely connected to local brands’ strategies and goals and can move quickly to meet the brands’ needs. IT organizations that embrace – not ignore – their new role in retail organizations will be those that are best positioned for success.
Agile Action
The ability to respond to business demand with speed and quality requires IT to assess its development methodologies and processes. Many of the legacy applications in use today in grocery retail have been developed in-house and on traditional platforms like the mainframe. Waterfall development methodologies were conducive to this type of development.
Today, Agile and DevOps are taking off. The deployment of these methodologies is enabling clients to implement more quickly and begin to realize benefits sooner. However, exclusive use of any of these methods is not sustainable for the long term. IT organizations should assess the best method depending on the specific business need and consider hybrid approaches to deliver solutions.
Changing Supplier Expectations
As the volume of technology projects and speed to deliver solutions increases, IT organizations in grocery retail are relying on suppliers for additional resources and technical expertise. Traditional suppliers appear to be encumbered with legacy processes and are at times slow to respond. This is giving rise to niche IT players.
Next generation IT professionals will need to be able to effectively manage the supplier landscape – including both incumbents and new entrants – to maximize resources, present a seamless experience for clients and ensure speed to market for solutions.
Innovation for Scale
As technology rapidly evolves, it goes without saying that the most innovative companies will win. IT has a responsibility to provide thought leadership to the organization and lead innovation that can further the organization’s strategic objectives.
But there’s a careful balance when it comes to innovation, particularly within the IT space in grocery retail, between asking the business to pilot new ideas and the IT organization’s ability to quickly industrialize a solution that’s scalable across what can be more than 1,000 stores in a brand. Having ideas incubating in a lab is important, but not sufficient. While it can create excitement around the latest development, delivering a robust, industrialized solution is really what matters.
Successful grocery retail IT organizations will walk the fine line between rapid testing and the ability for scale, so as not to run the risk of providing a client with a great proof of concept that the business wants in stores quickly, but that IT can’t deliver fast enough.
Talent for the Future
The proliferation of Cloud-based solutions has brought a complexity to grocery retail IT that requires a new and advanced set of skills. IT teams today have to be able to integrate a variety of solutions into a seamless experience for the customer. In Retail Business Services, we recognized the need early on for the talent with this skillset and quickly deployed a strategy to get that talent in place. We partner with a number of different educational institutions to develop talent through internships and co-ops, which benefit the students as well as the company. And it’s paid off.
Because of our innovation lab and this program, one of our brand companies is launching mobile app-enhanced checkout, which was built right in our lab. But the need for talent goes beyond staffing the lab. Smart IT organizations will nurture an innovative culture and take a purposeful approach to developing and implementing career paths for all roles within IT.
The future of grocery retail is simplified, effortless and personal, and IT teams who enable brands to deliver this experience to their customers will succeed. Those that have an eye for the blurring lines between the business and IT, new ways of working both internally and with suppliers, innovating for scale and creating a bench of next generation talent will be best positioned to support their clients and deliver winning strategies.
