RSR Research: Who Pushes Who? Vendors vs. Retailers
Through a special arrangement, presented here for discussion is a summary of an article from Retail Paradox, Retail Systems Research’s weekly analysis on emerging issues facing retailers.
We were talking internally at RSR about some of the changes (or lack thereof) that we’re seeing in the industry. One topic that came up: who pushes whom more when it comes to IT collaboration — vendors or retailers?
On the one side, retailers push vendors. At a panel on price optimization not too long ago, I asked the retailers on the panel: Have you maxed out the capabilities of the vendors you use for price optimization, or do you feel like there’s a lot more that they provide that you haven’t yet taken advantage of? The answers surprised me. Across the board, the retailers said, "We are constantly pushing our vendor to do more in price optimization. We have so many more ideas of what we want to do with it than what they are providing today." After the session, the vendors strongly disagreed with that assessment. "Those guys have barely scratched the surface of what we provide," one such vendor lamented. There’s a huge difference in perception.
On the other side, vendors push retailers. For example, RSR sees omni-channel retailing as a transformational endeavor for the industry. In talking to vendors, we get a lot of angst on the issue. "We understand what needs to happen, but retailers aren’t making the big changes they need to make!" Yet again, a huge difference in perception, though this one I can understand better. A retailer, mired in the practicality of the day-to-day, looks at a vendor knocking on their door and offering "transformation" and wants to just slam that door shut.
But here’s the theme that emerges from these two gaps:
- Vendors want to push retailers on strategy, because strategic changes mean big projects and long roadmaps and lots of implementation and change management.
- Retailers want help with the tactics. They want the 10 features/functions done that would solve so many of their problems — if the vendor would just prioritize those 10 things and get them done. Unfortunately, they’re competing with the vendor’s other retail customers who all want their own (different) ten thing prioritized too.
They’re both missing the point.
Vendors aren’t going to get retailers to take them seriously on the big transformation vision until vendors deliver on the tactics. How much credibility can vendors have in driving the big things when they’re allowing the small things to fester?
And retailers are never going to be able to move beyond tactical changes until they start thinking strategically about their vendor partners. They need to start thinking about how to most closely meld people-process-technology all together, rather than blindly insisting that the system change because the process demands it.
We seem doomed to stay in this cycle until someone actually uses information technology transformatively. I haven’t seen anyone do it yet. So round and round we go.
Discussion Questions: How do conflicting priorities between retailers and vendors hinder collaboration on retail IT initiatives? Which side has more clout in driving such collaboration?