At this point of the pandemic, most large brick-and-mortar retail chains have established a functional — albeit basic — digital operation to support their core in-store business. While far from perfect, these online offerings have gone from being lockdown-phase necessities to transformative gateways that will serve as embryos for the retailer of tomorrow.
More times than not, that shift, that next-level digitization, is playing out at the self-checkout line, alongside new and unprecedented cohesion between the front-of-store and back-of-store legacy systems that in some cases are 20 and 30 years old.
“The eCommerce portion of the business, with our high-volume retailers especially, obviously increased during the last year,” Rance Poehler, CEO of Toshiba Global Commerce Solutions told PYMNTS’ Karen Webster, “but now they’re absolutely coming back to physical brick and mortar.”
Several catalysts drive retailers of all persuasions to take the steps needed to bring their digital game to the next level, Poehler explained. These include moves to upgrade self-checkout to be more efficient with better product and produce recognition, improved loss prevention technology, and anything that can minimize human involvement given the current shortage of hourly workers.
“We have some customers that were eComm-based high volume retailers that are now thinking brick and mortar,” he said. “So that point, that legacy applications are holding them back, with apps that go back 10, 20, 30 years [and involve] millions of dollars of customization, is the driver that’s keeping our customers from really gaining some of the efficiency they want to.”
For those companies that aren’t investing and innovating yet, Poehler points to findings from a joint survey of 2,500 consumers done by Toshiba and PYMNTS that shows more than 35% of shoppers said they would switch who they buy from if a rival merchant offered better digital capabilities.
Read more: Consumers Want Self-Service Checkout Options But Rarely Get to Use Them
Clearly, that data reflects the need for retailers to transform and meet consumers’ changing expectations for equivalent experiences, whether in-store or online. But that doesn’t make it easy for retailers to convert, many of whom have millions of dollars invested into legacy software systems that they’re not prepared to simply collapse. As such, Poehler said, the appeal of tinkering with or plugging in microservices and application programming interfaces (APIs) rather than “rip and replace” can make a lot of sense.
It’s a process of trial and error and adaptation that Poehler said one large Toshiba client aptly characterized as “reckless experimentation.”
“What that means is they want an agile platform. So, if they’ve got ideas on how to make their business more efficient and more competitive, they want to be able to take action and make it happen immediately,” he said. “If it fails in 10 of their 2,000 stores, fine, we’ll readjust and make another decision. But [customers] want that agile ability to experiment with all these new ideas and opportunities that are in retail.”
Bigger Than I-T
Poehler’s chat with PYMNTS and the joint-data release coincide with the ongoing National Retail Federation’s “Big Show” trade conference, as well as an announcement today (Jan. 17) that Toshiba Global Commerce Solutions was expanding its ELERA platform to serve the tech-driven needs of a new era of retail.
With the help of 2 million new lines of code, more than 45 pre-packaged microservices and over 550 APIs, Poehler said his company would be uniquely positioned to deliver the “agile, interconnected, and infinitely adaptable” solution that the industry wants and needs.
“What we have found in many of the briefings we’ve had with our customers, is that their legacy infrastructure is now holding them back,” he said, noting that things have gone from being all about providing products during the heat of COVID to rethinking the entire operation. “Many of our largest customers are now saying, ‘How can we be more effective in competing? How can we be more efficient? How can we be more profitable? How can we digitally incline our business to connect with our customers who are demanding that?’”
Because of the complexity of the process and the wide-ranging needs of the different retailers involved — ranging from warehouse to grocery to eCommerce and pharmacy and more — the decision making on data-linked transformations goes well beyond the purview of the CIO and typically involves the entire C-suite.
It’s a process that Poehler said has become more of a consultative discussion and the offering of guidance rather than a simple product solution at a time of massive transformation in all corners of the industry.
“We had one of the largest eCommerce retailers come to us and say, ‘We’re going to open brick-and-mortar stores in a very high volume in the next 10 years,’” he said, acknowledging the fact that many major online retailers are aware that they lack — and need — some sort of physical presence.
“[The] eCommerce players know they’ve got to have brick and mortar, customers want brick and mortar, and this will be the year that there will be more brick and mortar built than disposed of,” he said.
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