Changing retailer culture in organisations that have operated in the same way for years is a known big challenge, so tech companies are entrenching themselves within their four walls.
Considering the number of events, breakfast briefings and industry gatherings I attend alongside retailers on the topic of digital transformation, you’d think the message would have been received by now: retailers need to think much more digitally and significantly change old and existing practices in order to move forward.
Despite positive comments about from CEOs and leadership teams during quarterly results statements and at said industry events, where they express the need for digital transformation and explain how they have developed e-commerce and built in digital touchpoints in stores, the evolution isn’t progressing at pace.
Much of that comes down to the difficulty in changing retailer culture and those oft-referenced legacy systems. They know they need to change but certain ingrained elements are holding them back, so they don’t evolve as quickly as they perhaps need to.
Old habits die hard
On a smaller scale, I know from working in offices myself that it’s difficult to change – old habits die hard. For instance, I understand the transparency benefits of using Google Docs instead of the traditional Microsoft Office programmes that have been populating offices for years, but can I shake off my Microsoft habits? No, and I’m sure I’m not alone.
New social media style communication tools or cloud-based file sharing systems, such as Yammer and Google Drive respectively, which have been created to make office and cross-office interaction more transparent, have the same impact with me. As a tech writer I’m open to new ideas and want to change, but when trying to conduct a daily task quickly, frustrations kick in and I all-too-quickly revert back to what I know.
For me, that’s retail structural change in a microcosm, and I think it’s one of the reasons why we’re starting to see big technology companies create all-encompassing alliances with big retailers. See Walmart-Microsoft, Marks & Spencer-Microsoft, and Carrefour-Google, which have been agreed in the last few months, as ways of changing retailer culture.
Vendors changing retailer culture from within
Amazon-defence aside, these long-term partnerships must surely be about changing retailer culture from within. The Googles and Microsofts of this world are getting under the skin of retailers, mixing their tech expertise with the retailers’ own IT and data science teams to create solutions specifically for these retail businesses. At the same time, they are deploying their software suites across these organisations, which I assume gives the respective workforces no option but to use their programs for every-day office work.
It’s probably too early to say if it’s the best way to enact change, and only time will tell if it’s effective for the retailers taking this approach. Other vendor-retailer relationships will still exist, of course, but might we be seeing what analyst Miya Knights described to me as “a refreshing sea change in traditional retail’s default build vs buy approach to tech”?
The news of these new-style partnerships comes as reports from Europe suggest German grocer Lidl is scrapping a seven-year SAP digital transformation deal part-way through the project, having incurred what some publications have suggested totals around €500 million in costs to date. Apparently the two companies will continue to work with each other in the future, but in a time of newly emerging vendor-retailer alliances, the developments at Lidl go some way to supporting the notion that fresh models are required.
Vendors I’ve spoken to expect to see more of these collaborative partnerships crop up, and no doubt they’ll be working overtime to make sure they are the ones retailers want to work alongside.