The fortunes of the retail sector have varied enormously during the pandemic. Many e-commerce sites and brands with established online and office sales channels have flourished, whilst mainstays of the high street, reliant on customer footfall, have had a miserable time. However, one constant across the entire industry is that retailers have needed to innovate at a high speed to respond to dramatically changing customer needs.
Retailers have had to rush through digital transformation programs at breakneck speed to deliver new digital services for customers and ensure their workforces can continue to operate effectively, whether in store or remotely. A prime example of this has been supermarkets which have had to spin up new servers and migrate to cloud infrastructure, almost overnight, to handle the huge spikes in online shopping as lockdowns were imposed.
Technologists operating under severe pressure
It has come down to IT departments to deliver this rapid digital transformation. Across all parts of the retail industry, technologists have performed a truly heroic job, delivering game-changing innovation and fast-tracking wholesale cloud computing initiatives. However, many technologists are understandably now feeling the strain. A recent report from AppDynamics brought home exactly how hard the last 12 months have hit retail IT teams around the world. The vast majority are working longer hours, feel under immense pressure and find it difficult to switch off from work, with constant worries about making a costly mistake.
Retail technologists are used to working under real pressure, managing events such as Cyber Monday and Black Friday where they’ve had to manage and respond to enormous surges in traffic. They’ve always understood the importance of world-class technology performance and the need to deliver incredible digital customer experience. Apparel brand Carhartt has described how, on Cyber Monday, teams would typically gather together in a war room to monitor activity and get ready to mobilize in response to any technology issues – they were ready to take on a massive challenge.
For some retail technologists, every day for more than a year has felt like Cyber Monday! To make things even more challenging, they’ve had no time to prepare (unlike with one-off events such as Black Friday); and they’ve typically been managing IT performance and collaboration with their teams whilst working remotely. This really is a whole new level of pressure.
Soaring complexity in the IT department
More than any other sector, technologists in retail cite increased complexity as a major challenge, with 79 per cent claiming that their response to COVID-19 has created more IT complexity than they have ever experienced. The acceleration of innovation projects and rapid escalation of cloud computing initiatives have left retail IT departments managing a sprawling IT estate.
Technologists have rightly recognized the need to monitor the full IT estate; from customer-facing applications through to core infrastructure such as network and security. This enhanced monitoring has meant they are now facing soaring volumes of data, further adding to the complexity that is now engulfing many IT departments.
Unfortunately, too many retail businesses aren’t providing IT departments with the tools they need to cut through this complexity and turn vast volumes of data into meaningful, actionable, and prioritized insights. Technologists don’t have the visibility they need to monitor performance across their IT estate and to identify issues early so they can be fixed before they impact end users.
Applying a business lens to IT performance
Technologists don’t just need visibility into IT performance to tackle complexity; they also need to understand how performance issues impact customers and business outcomes. They need a business lens on technology performance in order to prioritize actions, innovation and investment based on real-world commercial impact.
Interestingly, tech professionals in the retail sector are acutely aware of the game-changing benefits of connecting IT performance with real-time business data, more so than counterparts in industries such as financial services, manufacturing, and the public sector. This is most likely due to the sheer volume of transactions and issues they are encountering on a daily basis, and the critical need to deliver faultless digital experiences at all times. They understand the damage that performance issues can have on customer loyalty and brand reputation.
Next steps to achieve retail innovation goals
Technologists are under no illusion that the pace of innovation will slow over the next year. From recent conversations with retailers, there are no plans to scale back their e-commerce capabilities once the pandemic finally passes. Instead, many CIOs will rationalize their e-commerce capabilities, consolidating and simplifying their platforms and architecture to remove as much complexity as possible.
At the same time, the re-opening of stores as lockdown restrictions are eased will see retailers looking to leverage new technologies to develop a whole new level of omni-channel experience. There’s likely to be a rush to incorporate the Internet of Things into the in-store experience, a greater use of augmented reality and virtual reality technologies when it comes to fashion retail, and the introduction of drive-through collection.
As McKinsey reports, “the most successful retailers will be those that connect with consumers in new ways by leaning in on their digital, omni-channel, and in-store technology ambitions.” All of this innovation requires new infrastructure, new skills, and new security approaches for the entire IT stack. This is why full-stack observability is now so important. Without this link between IT performance and business outcomes, retailers risk jeopardizing their digital transformation investments, and falling behind in the innovation race.