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Software Solutions for Retail — Should You Build or Buy Them?

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Software Solutions for Retail — Should You Build or Buy Them?

As a CIO in the retail and telecoms industry for the past 10 years, I have always supported the concept of “Buy, don’t build!”. This maxim has served me well for many years. Mainly for 2 reasons, firstly, the time and effort involved in building your own functionality was very high, and secondly, the business user sometimes only had a vague idea of the requirements and therefore could be persuaded to accept the vanilla version of a product off the shelf instead. The logic was, better to get 80% of what you need off the shelf sooner, rather than go through endless rounds of specification and testing to get 90% of what you require in a much longer time frame. Sticking to the vanilla version of the product does make sense when dealing with, for example, standard finance processes. Usually, these are not part of your unique selling proposition or “secret sauce”. If you can find a product that does what you want, and you have a standard process and the functionality is not part of your secret sauce, then go ahead and buy.

 

But watch out, existing off-the-shelf products are fundamentally based on looking at historical trends, speaking to user groups, and determining functionality needs based on historical and immediate problems to solve. But due to the current and future unpredictability, it will become more and more difficult to meet 80% of needs. There are quite a few disadvantages to maintaining this approach today. For some areas like sales, marketing, and supply chain, it is imperative that the business is supported to maintain and enhance whatever competitive edge they have. Therefore, I would say, be careful of the vanilla version. This is what everybody uses, you need to remain unique in today’s market! And we have seen more change in the market over the past year than in the past 5 years.

 

Traditional brick-and-mortar retail has been through one hell of a roller coaster ride. Fashion has veered massively towards online, as the sale of “non-critical items” are not allowed in physical stores. Already, struggling retailers like Debenhams and Arcadia have succumbed to the pressure of the emergence of the eCommerce giants and the purchase of brands without physical stores by Boohoo and ASOS have reinforced the drive towards online. Grocery and food, on the other hand, have fared much better. As sellers of “critical items”, food retailers have seen much-improved sales in physical stores and online. Consumer behaviour has changed due to COVID-19 and it will not return to what it was, ever!

 

As someone who previously worked in retail for 15 years, in both grocery and fashion, I always appreciated the fast pace, as it was critical to react quickly to change. A new trend in fashion had to be picked up promptly, designed, manufactured, and delivered to the store in time to catch the trend. In grocery, fresh food had to be delivered just in time to serve fresh produce to an eager customer. Despite this fast pace, I would argue that retailers were usually well-prepared. This is because, although it was fast-paced, it was predictable.

 

Originally, I had planned to look at what has changed in retail over the past 5 years, but now we only need to look at the last 12 months to realise that the pace of change has picked up significantly. For example, organisations that have resisted the requirement for working from home due to concerns about productivity have had no choice now but to embrace it. What were seen as serious concerns about whether people could be trusted or not were pushed to one side when there was no choice. Things will never be the same, consumers will buy more services and goods online and larger numbers of people will work from home. If ever there was a line graph to paint this picture, we just have to look at the eCommerce US sales as a percentage of total sales in 2020.

Chart courtesy of ClearBridge Investments. Source: ShawSpring Research, Bank of America, U.S. Department of Commerce, as of June 8, 2020

 

 

This has driven a massive demand for digital transformation across retail which has to consider the areas around customer engagement, automating workflows, and managing/tracking employee productivity. IT departments need to consider what they can do to meet this demand.

 

COVID-19 has changed how we do business forever, as I write this, all fashion stores in the UK and Ireland are closed and it is very difficult to even predict when they will open. Grocery supermarkets have seen significant changes in patterns of shopping and demand for product mix has changed due to lockdowns. The ability to react quickly and unpredictability have now become critical business issues to solve. The days of waiting for 12 months to get a new system live are gone. Retailers now need to react in weeks! This is a challenge for organisations with legacy systems that are very difficult to swap out or change. So how will retailers deal with this?

 

One option is to consider a low-code approach. What is low-code? Forrester explains that low-code platforms “enable rapid delivery of business applications with a minimum of hand-coding and minimal upfront investment in setup, training, and deployment”. Put simply, low-code allows a business to rapidly build and implement custom software with less coding than traditional development. According to Gartner, “by 2024 low-code development will be responsible for 65% of all application development activity”. It reduces the gap between business and IT, allowing both teams to work together to solve business problems.

 

The low-code platform comes with a visual modelling interface. This is an extremely powerful tool that allows the user to see the logic of the application as it is being built and enables non-developers to grasp the application design with ease. It beats looking at the code! With low-code platforms, your IT department can deliver applications quickly with much fewer quality issues and far fewer misunderstandings with their business partners. They don’t have to spend months building something from scratch as the low-code platform provides standard components such as report templates and ready-to-use code modules. Low-code is a great way to land quick prototypes to demonstrate to users the functionality of an application. As the platforms have matured, they have added security, reliability, and scalability, allowing enterprise grade solutions to be built. Built-in security features make low-code a safe and reliable solution for lots of user applications. Low-code applications are cross-platform and can be deployed for use across multiple devices. This means, as a business, you can use one platform to deliver across Web and Mobile (Android and iOS), providing a consistent multichannel user experience.

 

Low-code platforms have made programming easier and more efficient. Instead of writing thousands of lines of code to create an application, the platforms have made it simple with visual workflows and drag and drop capabilities. Now organisations can respond promptly to the changing needs of users. They can start very quickly with a prototype and iterate, iterate, iterate to end up with an end product that is exactly what the users want. Recently, this is being used as a valuable tool for delivering time-critical digital transformation.

 

Although low-code platforms can be used by non-developers, there are sometimes claims that no code needs to be written. I believe this is rarely the case and would recommend that you engage an experienced partner like Objectivity to get started. A well-trusted partner with experience in several low-code platforms can help you successfully start your low-code adoption journey. For instance, engaging Objectivity’s designers and developers could help you deliver on the advantages of the low-code approach sooner and with greater efficiency. Once you get started, a lot of the development becomes visual, using existing modules and templates. This makes it much easier to bring the users along, but that doesn’t mean there is no code written at all. Objectivity’s many years of experience in developing software for retailers and connecting separate systems as an integrator can help get you started and bring the various components together with a low-code approach.

 

Engaging a technology partner addresses the need for a quicker delivery method, but what about the unpredictability?

 

Well, as the importance of data in predictable times is well known, it is doubly important in unpredictable times. For many years, the goal with data was to get it all together in one place. Then the goal evolved to be able to analyse groups of structured and unstructured data from multiple sources. The focus has moved from historic storytelling to predictive analysis. Finally, we have the challenge of modelling the effects of large medical/political decisions on demand. Amazon and Netflix have led the way, examining past behaviour to determine future likes and dislikes. Even determining gaps where future likes will not be met and filling them by creating their own products and content. This is not as easy as it looks and if you don’t have several people with some form of ‘Data Scientist’ in their title by now then you’re behind the curve.

 

Harvard Business Review reports that “working Data Scientists make their daily bread and butter through data collection and data cleaning; building dashboards and reports; data visualisation; statistical inference; communicating results to key stakeholders; and convincing decisions makers of their results.” While I very much agree with this, they now also need to be able to add machine learning and AI to their skill sets. My first experience of a Data Scientist in action was many years ago. I started my career as a developer for a grocery retailer and one of my colleagues was analysing sales data from the peak Christmas period. He noticed a spike in the sales of luxury toilet paper before Christmas. On investigation, he discovered that consumers wanted to impress their visiting relatives by having luxury items! Who would have guessed! Fundamentally, knowing what your customer wants and when is still the key requirement.

 

Consumers now expect retailers to anticipate their needs. Whether that is luxury toilet paper at Christmas or home baking products during lockdowns. They need to merge offline and online experiences. Welcoming a customer back to a physical store, having badly missed them through a lockdown, and directing them to the product they inquired about on the website while on public transport earlier in the day. This is a big ask from your already stretched in-house Business Intelligence team, at a time when skilled Data Scientists are very hard to find and hold onto.

 

In the past, I have worked with Objectivity as a delivery partner across a variety of areas within retail, IT development, and support. They have many years of experience in software development for retail in both fashion and grocery. They have a young, well-educated workforce, particularly in the Data Science area. They were well capable to augment my own internal team when I needed to expand to meet increased demand and on special transformational projects. In times when I found it very difficult to find people with the right skills to join my permanent team, I was able to call on them to deliver many critical projects.

 

In summary, retail is undergoing a rapid transformation and evolution. Retail expert Mark Pilkington thinks “It’s pointless to use a store as a glorified warehouse full of stuff when stock can be seen and sold online”. He believes that the shop floor will shrink, and retail “will be about engaging customers in a way that they can’t experience from their screens”. Changing circumstances caused by COVID-19 and tech-savvy customers with higher expectations expect retail technology not only to meet their needs but anticipate them. Now more than ever it is critical to have a smart, agile partner to meet the demands being put on your internal Data Scientists. The pace of change has accelerated and the ability of a business to react quickly is critical. IT departments are under significant pressure to use new approaches to meet growing demand. The use of a low-code platform with a strong agile partner will enable the fast delivery of digital transformation — and that is why I would suggest businesses consider adopting the “Build, don’t buy” approach.

About the Author

Pat Moynihan, Independent Consultant
Pat Moynihan, Independent Consultant

Pat Moynihan has 30 years’ experience in the delivery of quality IT systems and running significant IT functions.  He is a senior IT leader in both the Retail and Telecoms sectors, where he worked for Primark, Vodafone and O2. He has extensive technology management experience and a successful track record in digital transformation, innovation programs, organisational and people development. He is exceptionally customer focused and has delivered significant business value through the use of business intelligence technology and tools. Above all, he has a consistent track record in change management and delivering business results. 

 

About Objectivity

Objectivity Ltd. is a values-driven IT partner specialising in custom software development. We design, deliver, and support solutions that help our clients grow. We’re an innovative leader in digital technologies with a portfolio of stakeholders from a range of industries. We’ve been developing retail software solutions since 1991 and over 100 of our professionals work in retail projects.

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