However, many retailers have discovered that a technology solution decision is far more complex than it would seem, and, instead, they should be investing in self-enablement.

Consider this, a retailer in a city hub, complete with its own power backup and fast connectivity, can deploy a fully cloud-based solution. This is not much unlike the markets that international vendors understand.

However, we are speaking about our unique South African context. redPanda Solutions can say unequivocally that you do not want a cookie-cutter approach that says: “I can do the same thing everywhere”.

A retailer outside of the major city regions, with smaller stores in some of the more remote areas, needs the flexibility to work in the cloud and have in-store servers. They need full redundancy to deal with connectivity and power challenges. Retail is unforgiving – an inability to trade can close doors.

A loss of skills

Unfortunately, when a retailer invests in a new software vendor there is often an acknowledgement that they are going to lose a significant number of staff because they need to be replaced with new skills to deal with new technologies.

Essentially, the retailer needs to move a substantial portion of the services to the vendor, who is that technology stack expert.

This gives rise to Software-as-a-Service (SaaS) environments and, in many cases, the loss of valuable skills and IP within a retailer. This causes a cascade of problems later on when there is no one in the organisation who knows why something was configured a certain way… until it’s too late.

This is not to say SaaS is not the right solution – in many cases it absolutely is, however, it depends on how the SaaS solution is designed and run. When a retailer finds itself in a situation where it no longer retains valuable IP, it loses the ability to do what it once could. If processes fail, no one can remember why something was done in a specific way. There most likely is a very good reason things are as they are — but because the IP is gone, no one can answer why.

Let’s look at the alternative. A retailer that retains its critical skills, and vital institutional knowledge, ensures continuity, productivity, and the ability to make informed decisions. This helps prevent knowledge gaps, process inefficiencies and an increased reliance on external vendors, which can ultimately undermine a retailer’s competitiveness.

By establishing centres of excellence or competency hubs, internal teams can develop deep expertise in core systems and processes, enabling them to troubleshoot issues, optimise performance, and drive continuous improvement.

Effective IP management also protects the organisation’s unique competitive advantages, prevents vendor lock-in, and ensures the long-term viability of the technology ecosystem. It ensures skills retention, business continuity, supports customer satisfaction and boosts employee morale, and, importantly, it protects the employer’s reputation.

Vendor lock-in

On the other hand, many retailers in South Africa are dependent on international vendors. Relying on international vendors to provide critical technology solutions and support can further compound many uniquely South African challenges that retailers face.

Unfavourable vendor dependencies can lead to significant business continuity issues, revenue losses, customer dissatisfaction and reputational damage, especially during high-volume periods such as Black Friday.

However, switching vendors when not self-enabled can turn into a costly affair which, in turn, locks organisations into suboptimal relationships.

The case for self-enablement

A retailer is self-enabled when it can take control of its technology ecosystem, reducing its reliance on external vendors. Retailers can achieve this by working with a self-enablement partner on a few, key strategies.

They should adopt open, modular architectures and develop in-house expertise and maintain control over core systems and processes.

A good self-enablement partner will help them negotiate vendor contracts that protect against excessive termination fees, price escalations, and other lock-in mechanisms. Importantly, they will be advised to diversify their vendor relationships which enables flexibility to transition to alternative providers without significant disruption to the organisation.

A self-enablement partner will ensure that retailers continuously invest in upskilling and retaining internal teams. This ensures the organisation has the necessary expertise in-house to manage the technology ecosystem and any future transitions.

This, by design, reduces a retailer’s reliance on external support.

In other words, the business maintains control over its technology stack.

Self-enablement, then, protects retailers from both suboptimal dependencies and the high switching costs and disruptions associated with switching between vendors.

The net effect of this is a retailer that’s able to take advantage of the rapid advancements in retail technology more effectively and efficiently.

These include advancements in areas such as cloud computing, edge computing, artificial intelligence, and the Internet of Things.

The result is improved agility, scalability and innovation as retailers adapt to changing customer behaviour, demands and market conditions.

Consumers in South Africa are under immense pressure with a cascade of bad news resulting in increased prices at the till.

Producer Price Inflation continues to rise, with the latest figures showing an increase from August’s 4.3% to 5.1% in September: Things are going to keep becoming more expensive following higher fuel prices, a high lending rate to try to keep inflation in check and a weak, volatile rand.

Despite this, retailers have to sell goods and consumers need to buy goods. If the prevailing conditions weren’t enough to seriously threaten consumer loyalty, it is all playing out in an era of more competition than ever before and a consumer that demands a superb shopping experience.

While this would appear to spell bad news all round, the flip side of the coin is that retailers have more options and tools than ever before to radically improve their in-store and online shopping experience to win over customers and keep them.

Retailers of all sizes have never had so many opportunities to attract new customers, convert occasional consumers into loyal, long-term customers, deliver an enhanced customer experience (CX), and drive higher profits.

And to be clear, this is not an enterprise conversation exclusively. Smaller retailers, even those with a few outlets, now have tools and partners at their disposal to compete successfully against the biggest names.

Everyone has heard about the omnichannel – the ability to work across and switch between all channels seamlessly.

This is great, but an obsession with the omnichannel today and going into 2024 will be playing yesterday’s game. Omnichannel is for all intents and purposes dead. It has been replaced by the concept of ambient technology that is ready to help. It needs to be present and always on, but not intrusive. There cannot be any friction.

One of the toughest challenges for retailers is marrying legacy shopping with retail of the future. While this may sound like a lofty ideal, it isn’t. It is non-negotiable in the race to compete for relevancy in the world of tech-enabled customers.

Retailers need to hybridise their operations – in other words, they must merge the algorithmic personalisation of e-commerce with the immediacy and customer service of brick-and-mortar retail.

This is an overwhelming concept for traditional retailers who have built up a repository of legacy hardware and software over the years.

Yet, delaying the shift is delaying the inevitable. It simply must happen and the best way to get there is to adopt a strategic posture of openness with technology. It goes without saying that partnering with retail experts helps retailers develop the type of agility and flexibility needed to adapt to changing conditions.

When they do meet with expert partners, perhaps the single biggest surprise for legacy retailers is when they learn that we are not talking about painful implementations that span months, and which disrupt and upend a business and its staff — we are talking about days.

Modern technology and platforms with highly adaptable architecture can be introduced and integrated into an existing technology stack, and be operational and talking to other parts of their business, in almost no time at all.

In September, we met a business for the first time and before the month was up they’d gone live with a modern, agile POS platform that can scale and be adapted to handle an ecosystem of physical and virtual products and any payment type. This is the forward-thinking approach driving innovation at leading retailers and it’s available to retailers of any size.

However, in the rush to offer customers the best, many retailers make the mistake of basing all their technology choices on the end user.

Of course, the end user, or customer, is mightily important but it is a retailer’s staff that will either make or break the best investment. They’re the ones that need to be the face of the brand and they should not be neglected. It is crucial to carefully consider which technology solutions would best improve the experience of workers, who will impact the experience of the shoppers.

Making decisions depends on a number of factors, not least the vertical a retailer operates in, its size and, of course, budget. Even so, working with a partner that understands retail, a business of any size can build enriched customer journeys that make shoppers want to return.

A good partner will function as a sounding board and offer counsel on how to get the ambient technology mix right. Furthermore, it provides an objective view on whether new investments add more friction to the customer journey, which is the exact opposite of what customers demand.

[Featured Image Credit]