The RetailWire Podcast

Revolutionize Retail Operations: AI and Mobile Innovation for Small to Mid-Sized Retailers

• RetailWire

Share episode

Get ready to revolutionize your retail strategy with insights from Karen Halpern, Director of Retail and Hospitality Product Marketing at Priority Software. Discover how the integration of advanced technologies like AI and mobile are reshaping both online and in-store shopping experiences. Karen shares her personal anecdotes to illustrate the persistent challenges retailers face in connecting these channels and how even midsize retailers can harness these innovations to stay competitive.
   
Unpack the complexities of creating a seamless omnichannel operation in today’s fast-paced retail environment. Karen discusses the hurdles of disjointed systems, manual processes, and the significant investments required for IT modernization. Learn why some retailers hesitate to transition to cloud-based solutions and how Priority Software's all-in-one platform can ease these concerns, offering a roadmap to transform retail operations for the better.
   
Real-world success stories from brands like Ace Hardware, Columbia Wear, and Cowtown demonstrate the tangible benefits of adopting Priority’s solutions. From enhanced order management and inventory control to integrated loyalty programs, these examples underscore the measurable outcomes such as reduced IT costs and increased operational efficiency. The episode wraps up with strategic advice on recognizing the need for system upgrades and the advantages of partnering with Priority Software to meet today’s retail challenges head-on.

https://www.priority-software.com/lp/retailwire-podcast-2024/?utm_source=retailwire&utm_medium=podcast&utm_campaign=NRETA5


RetailWire is the retail industry's premier source for news, analysis, and discussion. With a focus on the latest trends, technology, and consumer behavior, RetailWire provides a platform for industry experts and thought leaders to share their insights and perspectives. Whether you're a retailer, supplier, or service provider, RetailWire is your go-to destination for staying informed and ahead of the curve.

Be sure to leave us a comment and let us know what you think. You might even hear your comment read on the next episode!

To learn more, or to join our Daily Discussions, visit RetailWire.com.

Speaker 1:

Welcome to the RetailWire podcast series. I'm Patricia Waldron, and today's topic is tech solutions developed specifically for midsize retailers and my super smart expert guest is Karen Halpern. She's the Director of Retail and Hospitality Product Marketing from Priority Software. Priority Software is a leader in enterprise software and it helps companies all around the world manage their business so they're smarter, quicker and more agile. Welcome, karen.

Speaker 1:

Hi nice to be here. Yeah, it's great to be chatting with you today. You've been in the retail space for many years and you've worked with brands that people will recognize global brands for a long time. What are you seeing in the market?

Speaker 2:

So I'm looking at the retail from you know a wider perspective of what's going on over the years and I see that over the last 20 years retail has changed dramatically on one hand, but on the other, hand there are a lot of things that actually stay the same.

Speaker 2:

So what has changed? There are a lot of things that actually stay the same. So what has changed? First of all, the online the online experience, the online selling channels. This is something that has changed dramatically how retailers are accessing their customers, but, on the other hand, the in-store experience has more or less stayed the same. Still, there is a traditional store with the counter, with the traditional experience, but this dramatic change requires retailers to change the way they work, right. They need to change their processes. They need to be able to support this change in balance. On top of that, there are a lot of advanced technologies that have been added.

Speaker 2:

We think about mobile. It's not so advanced anymore. But if you think about AI, generative AI, things that can influence how retailers manage their inventory, how they do personalization to their customers, how the user interfaces towards the employees and to the customers, they change everything. Now, when I look at things, I look at it first of all as a consumer, because, like a lot of people, I do shopping and I love shopping, and when I do shopping, I also try to figure out what affects my experience, and I'll give you a nice example for it. So I had a birthday recently and I got a voucher from a brand that.

Speaker 2:

I really like and I wanted to go to the store to try out a few items before I purchase and what. I realized is that I? The voucher that I got is only for online.

Speaker 2:

First of all, it made me frustrated and on top of that and this is the second thing that's happened to me as a professional, I try to understand why this happens, and the reason that happened is because there was a disconnect between the in-store and the online channels, and I also asked the assistant about it and she said yes, it's a known problem, but we're struggling and we're not connecting between the two channels. So that's from a consumer point of view, between the two channels. So that's from a consumer point of view. And then from a professional point of view, I look at those processes and I look at the system that supports the retailers and I understand why there are so many challenges and where it needs to go, how to connect between them.

Speaker 1:

I think that's exactly right. Online was developed separate from stores, and connecting them is one of the biggest problems retailers have, and, as consumers, we expect it to be seamless, don't we?

Speaker 2:

Yeah, we do, like every other experience, but for retail it's not there for most brands and for more smaller retailers.

Speaker 1:

And they have some unique characteristics and challenges. When you're working with, you know, retailers that are mid-sized or growing quickly. What characteristics do you have? How do you kind of classify them?

Speaker 2:

So in the industry it's quite typical to look at them like any other technology. First of all you've got the advanced ones, which are the early tech adapters that adopt new technologies that are very focused around the systems that drive the operations, and for most of them those are systems that are very strongly integrated. There is a unification of the customer experience and because of that the operation is also efficient. There are the evolving ones.

Speaker 2:

Typically they are the leaders in the market more the larger ones. Typically they're the leaders in the market more of the larger retailers. That's a large portion of their process and the customer experience is already synchronized and integrated. However, they're still in the process of upgrading some portions, so they're not the most advanced, they're in the middle. And then you've got all the traditional retailers. Those are typically the small businesses, the medium-sized businesses, that their processes are more focused around operations. They have systems that are not necessarily all tied up together. Sometimes the store experience is completely disconnected from the commerce experience. Sometimes it's integrated partially. Their systems are typically on-prem, which require a lot of heavy IT.

Speaker 2:

Or if they're completely small businesses, they have limited capabilities. They're focused around specific areas, specific domains in the operation and they don't have the end-to-end capabilities. Yeah, and they don't have the end-to-end capabilities.

Speaker 1:

Yeah, I definitely see the differences and you can tell, just even as a shopper right, who are the ones that have invested in the tech and maybe some of the others that are cobbling together some of these processes across the organization and it's obviously less successful. So let's focus on the smaller and midsize retailers and maybe you can kind of talk about what size parameters those are right specifically and the unique challenges they face when it comes to growing their brand, staying connected to customers and, more importantly, competing with big players that have, you know, deep pockets and the more advanced technology to connect.

Speaker 2:

So your first question was what is the size of those retailers? So I wouldn't say that there is a limit to the size. I would say that it's more connected to what is their IT stack situation. That's kind of where I would look at them. They can be rather large, with 100, 200, 500 stores and online capability, but still it's disconnected. So they're still in the traditional world and they can be smaller around 10, 15, 20 stores and be in the same situation.

Speaker 2:

So I would say somewhere between the range of, you know, towards the 500 and plus is where we look at the upper limit from our point of view. How?

Speaker 2:

do we characterize them. So what happens is that the situation is that the most of the revenue and we see a lot of researchers around that talk about the growth of retail is more focused on the online. So the physical stores still are growing, but most of the additional revenue, or the growth of retail is going to be on the online. There are some numbers. I recently read an article that estimates that around 30% of the revenue will come from online, but the overall growth is still there. Uh, the challenge for the retailers is to build the organization that can support an operation that is omni-channel. So you have both the stores. You have the physical stores, multiple locations, and the online, and growing them both together in an effective way requires support of sales in an effective way, marketing the service and the processes. It requires investment in out-of-the-box solution and implementation, and this is a challenge.

Speaker 2:

Small and mid-sized retailers have to compete against the larger ones, and if they want to compete, they need to do it in an effective way. The customer experience, both in the store and online, needs to be connected. Once they have the growing footprint, they need to be able to optimize optimize their processes, optimize their inventory and satisfy the customer demand, but make sure that, for example, in inventory, not to overstock On the operation. If they grow not in an efficient way, they will collapse. So they need to maintain lean and efficient operation and on the backside of the processes, not on the front end. They need to become more organized right. All the procurement needs to be organized, the finance, the HR, project management, all of that. And those are the challenges that they face.

Speaker 1:

And I imagine a lot of those challenges related to the systems that they're working with. So to what extent are you seeing existing systems and most of them are disconnected right. Limit retailers' them are disconnected right. Limit retailers' ability to innovate and scale. What are some of the most common obstacles you're seeing when you're working with companies that are both starting from the traditional store, adding online, and then the born-on-the-net that are now needing to invest in stores right? So what are the most common obstacles that you're seeing that retailers need to address?

Speaker 2:

So we can look at it from the customer point of view and we can look at it from the retailer's point of view, I prefer. Since I'm passionate about the customer point of view, I'll start with that.

Speaker 2:

I think that one of the limitations that retailers have a lot of retailers that don't have sufficient or strong IT systems lack a single customer view. There is a disconnect, first of all, between the online and the physical brick and mortar stores, but also between the stores themselves, but also between the stores themselves, and this really affects the customer experience, because from a customer point of view from my personal point of view I don't care if I'm online or physical, I'm on my mobile or on the website. I am expecting the same customer experience From a retailer point of view. From the operation side, if there is a disconnect between the different systems, there's also a disconnect between the operations on the online and the physical stores. For example, pick up in store.

Speaker 2:

This can only work if the systems are connected or click and collect. It requires the online to be able to see what the inventory is for the physical store. There is a lack of automated operation because most of the systems are not connected. There are people that need to do actual manual work to clear out the bottlenecks for inventory for pricing, for managing promotions and campaigns and discounts, for customer service, for fulfillment.

Speaker 2:

There's a list of those things for customer service, for fulfillment. There's a list of those things. And on the IT side, in the back end of it, there's heavy investment around the application, managing the different applications, because there are several managing the connection and the integration between them and to be able to achieve the business flows. And on top of that there's the actual cost of the IT.

Speaker 1:

So there are a lot of steps to it.

Speaker 1:

There are a lot of steps and I think the IT, the data 80% keeping things running and 20% doing something interesting that's going to drive the business is where we find a lot of retailers. These days. Your system is a little bit different because it's an all-in-one and it's a cloud-based system. When you talk to retailers and they're looking to make some kind of transformation between their current environment and a more modern, integrated, unified way of operating, what concerns or hesitations are they sharing with you about making this kind of transformation?

Speaker 2:

So there are several things that we see across all of the retailers that we talk to. They're very expected, I would say. First of all, like any organization, especially the more traditional ones, the ones that don't adopt new technology very fast, there's a hesitancy around change management.

Speaker 1:

Yeah, yeah, it's very management.

Speaker 2:

Yeah yeah, it's very scary, it's heavy. The people within the organization are risk aversive. They do not want to do those changes. They fear that there is going to be a lot of focus that is going to be around this change management instead of focus around, you know, the core of the business and on top of that it's a core solution, right? Everything is around that system, so it's very risky. The second question mark, or hesitance, is around cost, right, what is going to be the cost of those types of systems, typically the traditional?

Speaker 2:

retailers have on-premise systems. They're quite expensive the hardware, the maintenance and everything and that's a risk from their point of view. They're considering on-prem versus cloud. They're considering on-prem versus cloud. They're also considering, or afraid of, the change in the processes that they need to do, because typically if you implement a new system, you need to change the way you work to adapt yourself to the system is configured. So that's another challenge or hesitance that retailers have. And then there's, you know, a question about okay, do we do a best of suite or a best of breed? Do we continue with the systems that we have? Do we upgrade them or do we move to something that's completely new and maybe has everything? So those are challenges that we see and concerns that our potential customers have.

Speaker 1:

Well, I totally get that change can be intimidating for many reasons and also risky to the business. Given these challenges about change management and so forth, can you tell us a little more about your approach and what makes the platform such a good fit for these retailers? Obviously, it's being used by tens of thousands of retailers and brands around the world. How do you help them transform, Karen?

Speaker 2:

So let's first remind ourselves what is the solution, because it will help us understand how we can overcome the concerns that retailers have.

Speaker 2:

So Priority is an end-to-end platform that covers both the point of sale, unified commerce, retail management, all the way back to the enterprise requirements, the ERP side of it. It's cloud-based and it's SaaS. So here are already some things that we can answer to the concern. First of all, the fact that it's SaaS it means that subscription is the method of licensing right and that's relatively less expensive than buying a full license for an on-prem solution. The fact that it's cloud is it means that IT requirements decrease, that the investment in IT is lower. And the fact that it's a single platform that covers everything. It kind of means that we're a one-stop shop. Whatever you need in terms of retail management, the solution has the ability to cover it. However, it's modular so you don't need to take everything.

Speaker 2:

You can choose based on the needs, and the fact that it's a single platform means that there is no integration, reducing the risk of integration, maintaining the integrations, upgrades and things like that. Since it's working on a platform, it enjoys the platform capabilities, which means the flexibility and the customization and customizability that can be done on top of it, meaning that retailers don't need to change the way they work. The system can work around the way the retailers work and not the other way around. Since the platform is open and future ready, it allows retailers to plan ahead as they grow, as they add additional uh channels at they add additional capabilities. This can be also on the marketing side. It can be additional commerce channels and so on. On top of that, there are things that are very related to priority itself. First of all, the experience. You mentioned it. We support hundreds and thousands of retailers and we faced a lot of challenges in the past and we know how to implement.

Speaker 1:

We have best practices and we have methodologies that allow for smooth implementation that reduces the risk and those are all super important and I love that you've got the store piece, you've got the online and then all the back back end functions for merchandising and inventory, because, to your points earlier, that unified view of product and customer is something that still so many chains are missing. So can you share with us some real world examples on how your solutions are helping other brands around the world change their operations and why they've chosen priority over other solutions?

Speaker 2:

That's a good question. So let's start with Ace. It's hard work. We're working with one of the regional franchises for Ace. This franchise has 62 stores plus an online channel as well. Specifically, they had a very focused need. They were focused around improving their operation, improving their order management, their inventory control and also connecting between the online and the brick and mortar stores to create a more omni-channel experience.

Speaker 2:

They also added loyalty capabilities from our platform to enhance personalization and customer experience and on the back end side, they're using it for procurement, for vendor management and also for assembly processes. They're not manufacturers, however, they do assemble part of the products that they sell and they needed a solution that covers all of that. Another example Columbia Columbia Wear again a franchise that has more than 50 stores plus the online. The same, quite similar challenges, because I think most retailers eventually have similar challenges. They want to be more efficient, they want to provide a good experience, and Columbia we're focusing around managing their warehouse and they needed a solution that also includes all of their enterprise aspects, including the financing, including the HR and so on. Another example is Cowtown. Cowtown is a small retailer in Canada that has several megastores and they reached out to Priority after they tried to use and upgrade their existing systems.

Speaker 2:

They tried to do it more than once and they failed and they felt that they need a partner to work with and they were searching for capabilities around replenishment, around inventory, around, of course, the customer experience and also the employee experience in store. So there are a lot of retailers, but there are a lot of commonalities as well. Most of them are searching for a solution that will reduce their IT costs, that will support them in the growth of revenue and make their operation more efficiency and, of course, the customer experience is king.

Speaker 1:

Yeah, because you're never going to get the efficiencies and profitable growth if you're not serving customers in the way that they expect. That's totally right, and with some of these are there expected results or improvements or certain KPIs or return that retailers get when they implement your solutions.

Speaker 2:

So I think the first one is around the IT costs. That's the easiest to measure right, Moving away from traditional systems and multiple systems to a single system that is on the cloud and that has a SaaS licensing model reduces the IT costs immediately, but there are additional areas that are more evident as time grows. First of all, the operation efficiency, because there is a lot of automation that is supported by the system.

Speaker 2:

There are a lot of aspects that are around balancing the inventory, efficient processes in the store, between the store and different channels, and so on. So operational efficiency and on top of that, the one that is the holy grail, is the growth and the revenue. Customers are more satisfied. Customers buy more, they have a better experience in the store or online and cross the different channels and, that's evident returning customers.

Speaker 1:

Yeah, and that's going to be measurable over time. That's great. That there's kind of immediate benefit to the organization and longer term ability to achieve their business goals. That's awesome. And are there special benefits for brands who want to ramp up store operations or service? For brands who want to ramp up store operations or service? Even though online is growing rapidly, the only time you're directly in face-to-face is with stores, right, that's where you directly are connecting with customers and I think there's a renewed focus on store operations. Are there special benefits for brands who have a goal in that particular area?

Speaker 2:

so a lot of the capabilities that priority has developed are capabilities that also affect the in-store experience. So if we started with the fact that the in-store experience hasn't changed dramatically over the last hundred years, you've got the cashier, you've got the counter.

Speaker 2:

You as a customer. You go in, you do your shopping on your own and you only reach the point of sale at the end after you've made all of your decisions and there is less option to influence the buying process in with that interaction. When we look at the new capabilities, that the solution like priority that has mobile first as a focus, that has, uh, new and innovative solutions for the store experience. Some of them, you know the traditional ones, are the tablet, the mobile point of sale, you've got the self-service kiosks and all of that and you're able to integrate additional solutions to the system because of its openness. It dramatically changes the way customer experience, instead of engaging with the customer at the end, you're kind of engaging with them, similar to online. You can advise, you can check inventory for customers. You're working alongside the decision process and not afterwards. That's from the customer process and not afterwards.

Speaker 2:

That's from the customer experience point of view.

Speaker 1:

Absolutely, and from the employee experience too, because so much of their time is focused on manual tasks or other tasks that they're really not able. They're tied to old systems, right, so they're not able to be out with customers engaging along the process, along the path to purchase.

Speaker 2:

That's true, and we've got additional capabilities that are very, very focused around the employees, what we call the B2E side of things. So, for example, on top of the regular point of sales, we have application and capabilities that are able to automate processes, the ability to schedule your shifts. There are a lot of focuses around the employee and their experience as well, and making it as simple as possible, because sadly, employees in retail kind of change quite quickly and we need to onboard them. We need to be able to simplify their knowledge and ramp up and and uh to make them effective as soon as possible yes, because well-trained and happy employees translates into better service for customers and, obviously, higher growth.

Speaker 1:

Yeah that those are great things to talk about. So, finally, what advice would you give to retailers who realize they've outgrown their systems and who are ready to take the next step? How can they get started with priority?

Speaker 2:

So, first of all, before starting with priority, I think there are some steps that they need to think and consider.

Speaker 2:

So first of, all, a lot of them are contemplating replace or upgrade, and I would recommend, first thing, first considering replacing the platform instead of, you know, trying to stitch additional modules to when you already have or stretch it beyond its capability. Yeah, search for an implementation that will be faster, because the systems that you're going to replace or upgrade are your core systems. They're attached to your revenue. Core systems, they're attached to your revenue. But you need a solution that can be implemented rather quickly and can reduce cost over time and typically, best of suite, covers those capabilities. And the last one that I really like is find a vendor that is not just a vendor, that is a partner. So that are kind of the guidelines and in terms of how to take the next step. You can visit Priority and ask for a demo and we'll be happy to show you.

Speaker 1:

That's great insight and I really like the way that you've broken it down and given advice that's really based on many years of working with well-known brands who have been able to transform their organization. I really appreciate you being here today and for advising us on how retailers can overcome the tech limitations that are preventing them from competing with larger chains, meeting customers' ever-changing demands and the growing expectations for an omnichannel experience. So, on behalf of RetailWire, priority Software, karen, thank you very much for being here today and remember that you can get more information at the show notes area, in the video description and the link of how you can connect with Karen and other members of the Priority Software team. Thanks a lot, thank you.

People on this episode

Head Shot

Brian Crum

Host