RSR Study: Retail IT Behind the Consumer Tech Curve
By Tom Ryan
A new study from RSR Research finds that retail IT is not involved
in retailers’ efforts
to keep up with consumers’ demands for the latest in social or mobile innovations.
And to some degree, it’s the marketing department’s fault.
Indeed, the study
found line of business departments led by marketing are working around IT
to bring these consumer-facing technologies to market. Unfortunately, failure
to align IT with corporate strategy in its early stages tends to create
the self-fulfilling prophecy of IT being too slow to respond when its expertise
is most needed later on.
“The problem is not that business users don’t understand what’s
happening in IT’s backyard, it’s that they simply can’t wait,” the
authors state in the report, Pandora’s Box? The Impact of New Technologies
on Retail IT.
“Business conditions and cycles have sped up dramatically,
the consumer is stunningly technologically savvy, and business departments,
most especially marketing, must respond.”
In many ways, it’s a case of
During the late 90’s,
IT was busy setting up bunkers to prevent a Y2K catastrophe and websites came
to be managed by marketing departments to capitalize on the internet boom.
The early, simplistic, “eye candy” websites eventually
roped in IT when adding e-commerce functionality landed way over marketing’s
head, the study states.
Today, business users are once again largely forgoing
IT to catch up with the world of Facebook/Twitter, mobile shopping, and augmented
reality applications. Outside agencies are being used to design and enhance
the new applications while marketing interns are hired to inspect and review
tweets and Facebook posts, the study finds.
But the technical complexities
promise to become more challenging as some retailers are already starting
to sell directly on Facebook. The authors state, “Clearly by the end of
2010 consumer expectation of full data and order integration across any and
all selling channels has put the data ‘problem’ squarely
in the hands of IT, where it shall forever remain.”
Moreover, an accompanying
survey of retailers shows that the fact that business users can make
decisions around these new technologies without IT’s help ranks as the perceived
greatest organizational business inhibitor to
IT’s effectiveness and responsiveness. (More than 80 percent of respondents
came from IT departments.) The second biggest inhibitor was seen as perceived
user intransience to change their own processes to support new capabilities
that have been brought in house.
The IT-biased respondents did admit to their
own department problems. Asked to list the top three “technical” inhibitors
to becoming faster and better, coming in third was an IT development methodology
that is “rigid and takes
too long,” particularly given the rapid pace of change in the marketplace.
RSR’s top recommendation for retailers is to establish a strong IT governance
model. RSR wrote in the report, “Keeping track of outstanding
projects and discriminating between wish lists items and nice-to-have from
need-to-haves is virtually impossible without true IT business governace.”
Discussion Questions: How, if at all, do you see retail organizational
roles changing with the arrival of more technologically-driven shopping options?
Does marketing have to cede some clout to IT in order for retailers to fully
capitalize on the emerging social and mobile technologies? What primarily hurdles
do to see affecting change?
- Consumer Adoption of Technology Wreaks Havoc on Retail IT, New Study Find
– RSR Research
Box? The Impact of New Technologies on Retail IT – RSR Research