Commentary

How retailers can take advantage of an economic slowdown

BTM Global CEO Tom Schoen explains why an economic slowdown isn't always a bad thing. In fact it offers time to look at solutions or changes that make your teams more productive, or inventory management more accurate, or your customer experience more personal and pleasant.

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April 4, 2019 by Tom Schoen — President, BTM Global

By Tom Schoen, CEO, BTM Global

Although nothing is ever certain when it comes to predicting market growth, several reliable economists are expecting a slowdown in the retail industry this year. Not negative growth or zero growth, but certainly less growth than we saw in 2018 when many retailers flourished.

Slowdowns aren't necessarily a bad thing. In fact, many companies take advantage of them to focus on their internal process and technology. Economic slowdowns are a time to look at solutions or changes that make your teams more productive, or inventory management more accurate, or your customer experience more personal and pleasant. It's a time to put more thought and money into internal systems that improve operations and experiences.

If you've got the foresight to see a slower economy coming, don't waste it. With a bit of the pressure off, now is the time to turn your focus toward internal improvements. This doesn't mean letting up on the break-neck speed you're enjoying now, but a bit of planning will help you scale when the industry heats up again.

Get a strategy

First, you need to figure out the area you want to improve. Do you want to make the customer experience faster and easier? Do you want to tackle back-end operations like merchandising and planning? Do you need to make store employees more effective with better reporting or business analysis? Maybe better inventory accuracy and visibility would deliver the biggest ROI?

Once you have your strategy decided, think about the specific goals that will make it successful. For example, what part of the customer experience do you want to improve and how so? Faster check-outs? Easier returns? Mobile payment options? These answers help you choose the right infrastructure technology to move you from where you are now to a more efficient and profitable place.

Get a good partner

You put a huge effort into choosing the right technology for your organization, and an equal effort is required to find the right SI to make it a reality. Don't think of implementation work as a commodity. There are a lot of considerations when you choose an SI for a project, but here are a few factors that I think a lot of companies overlook.

A flexible approach

Some SIs have very rigid and templated implementation plans; they do not deviate from them, which means you may have to change your organization's process or how you make decisions. If that doesn't sound appealing to you, talk with your potential SI partners about how they can be flexible with their approach to fit your needs. Explain your processes and how your team works together, and get their take on how they can adjust their approach to fit your own (or make suggestions for improvements!).
Going into an implementation with a clear-eyed understanding of how the process will work will help keep everything on track.

A partner and a customer

If you're a clothing retailer and one of the SI team members is a loyalty member, or if an SI executive admits they spend half their paycheck at your store or website, that's a huge advantage for you. In addition to having them as a technology partner, you now have an SI that's a good culture fit. What do they like about shopping with you? What do they dislike about the returns process? They'll approach your project with a customer's eye but also a hard-nosed understanding of the reality of running a business; and marrying both of those perspectives can help your project stay focused on value-added tasks and accomplish them more quickly.

You still have to move fast

An economy going gangbusters won't last forever, and neither will a slowdown period. While you focus on internal improvements, it's still important to move quickly so you're not bogged down in a technology implementation when things start to swing upward again.

Every system integrator will say they move fast, but after countless implementation projects – some done in as little as seven weeks – I've found a few key factors that make a big difference if you want your project to move with a sense of urgency.

Trim the fat

To move quickly on a technology implementation, you need to create a thoughtful plan and a project infrastructure will address your most immediate needs. Look hard at each step of the plan and decide whether it truly adds value…if not, cut it. Don't bite off more than you can chew!

Strong governance

There needs to be strong governance from both the IT and the business side. Keep your scope very focused and don't divert from it unless absolutely necessary, but be able to make decisions quickly. You still want to move quickly during a slowdown, and having the right people in the right positions will facilitate faster decisions making that keeps the project on track.

Creative approaches

Don't be afraid to consider a creative or unorthodox approach to the project, especially if your SI has the track record to prove it can successfully think outside the box. As an example, we at BTM executed an unconventional approach to data migration that minimized system downtime and avoided disrupting the cloud provisioning process that was concurrently in production.

Don't shut out stakeholders. Give stakeholders access to the technology as it's developed. Shorter iterative development cycles help a project stay aligned with your broader business goals and fit “real world” situations.

Don't forget about the roll-out plan. Make sure you have a roll-out plan that details how the system will be deployed and how people are to be involved. This way, you have the tools to manage and support the technology yourselves for the long term, with minimal touchpoints from your SI.

Take full advantage of a slowdown

If sales slow for you in the coming year, take the time to retool your internal processes and find a partner to help you reach your goals quickly while making the biggest impact so you're ready with a stronger infrastructure when things heat up again.