Look, we get it, the world of retail tech can be completely overwhelming.The past decade has seen an explosion of different solutions, systems, apps, and tools all promising to deliver more sales, happier customers, and greater operational efficiency. It’s a far cry from the days of having one solution (which, admittedly probably had its fair share of limitations) that took care of everything.
Now there’s APIs, SPIs, webhooks, the cloud, loosely coupled or decoupled systems, headless and a hundred and one other things to figure out.
Without the right guide, navigating this new retail landscape can be incredibly tricky. It’s super easy to get knocked off track and disappear down a rabbit hole of chasing the next best and big thing.
Luckily, our Chief Strategist, Jörgen Ingelström, has been working at the forefront of retail tech for 25 years and he’s seen it all. We caught up with him to get his thoughts on the current state of retail and discover why innovation and experimentation are two fundamentals ambitious retailers should be fully embracing right now to be and stay successful and profitable.
Here’s what he had to tell us:
How has retail changed and evolved, especially in the last few years?
Before the pandemic everybody was talking about the in-store experience. Store experiences were being hyped to not be about selling but to be about brand discovery and storytelling. Then the pandemic hit and everything went to being functional and transactional with things like curbside pickup taking center stage because we didn’t care about the stores when their doors were shut.
The pendulum swings in two directions with the in-store experience on one side and transactional experience on the other. Now it’s going to swing back towards the store experience but not to the extent that retailers have to go crazy and build amusement parks in their stores – like some have done. Yes, brand discovery is still important and adds to the joy of shopping but shoppers want convenience too.
In fact, what retailers are realizing is they need to find a way of combining the two sides of the pendulum so customers can have an incredible in-store experience (if that’s what they want) but they can also have the convenience of a seamless transactional experience too.
And the best way for retailers to deliver positive shopping experiences every single time – no matter what the customer wants – is to experiment on both ends of the pendulum to see what works. This experimentation coupled with innovation and the ability to adapt and change quickly is much easier to do with the right mindset to retail software.
What does the right mindset mean and what does it look like?
Everything comes back to what the retailer wants to do and what they want to achieve. Retailers aren’t normally that interested in tech; they just want it done and want it to work. So when we start talking about mindset, best-of-breed, and now the MACH Alliance, they say: “Ok, what’s the difference between the classic monolithic set-up and the best-of-breed approach and what benefits do those differences bring me as a retailer?”
My answer to them is this – if you buy a chocolate gift box, you get a lot in one box, you’ll get that box and everything in it. You may not like all of it, but you like 70% of it. But everything in that box will still be tethered to that box no matter what you do with it. You’re stuck with the box and its content. You eat some and discard the rest.
So, compared to software then, while everything in this box represents functionality that might be good for sales or replenishment, once you start digging into it you discover it’s not great for fulfillment, or order routing, and it’s creating a substandard in-store experience. Then you then end up picking some pieces, pulling the box apart into different pieces but after a while it’s a rather messy, half-empty box.
Think of it like choosing candy from a Pick’n’Mix. You get to choose exactly what pieces you want.
It’s here best-of-breed thinking comes in. Think of it like choosing candy from a Pick’n’Mix. You get to choose exactly what pieces you want. They don’t really care about what kind of box you’re putting them in, just the fact that they get to choose everything that goes into it and can swap them out without any hassle if they want to try something new.
You mentioned the MACH Alliance, what is this?
The MACH Alliance is an organization that promotes the use of open and best-of-breed enterprise technology ecosystems. It aims to provide the necessary standards and capabilities for different systems to communicate with each other and solve the software puzzle in the retail industry. The MACH mindset emphasizes the freedom to choose the technology solutions that best suit one’s needs, rather than being locked into a single proprietary system. It’s like being able to pick and choose the box of candy that you want at any time, rather than being restricted to a pre-packaged set.
The MACH mindset emphasizes the freedom to choose the technology solutions that best suit one’s needs, rather than being locked into a single proprietary system.
What are the biggest differences between a traditional monolithic system and a MACH approach?
Think of it like this. Having one monolithic system is like owning a car. If you own the car, you can do whatever you want to it. It’s probably costing you more to buy it outright – and you might still be paying off the loan – but the car is yours.
If you use best-of-breed software,in a SaaS environment, you’re leasing the car and essentially renting space in various places that help you do what you need to do at any specific time. And instead of paying $30,000 up front, you’re paying $300 per month. In a cloud-architecture, you more or less rent your systems – but you own your data.
What MACH does is ensure that the SaaS companies you’re working with are actually delivering what they say they’re going to deliver on from an architecture perspective – and this means they can talk to all the other pieces of software within the Alliance. For example, to be part of the MACH Alliance a software vendor has to actually be microservices-first and not a big, monolithic system with an API bolted on to it.
How is this new approach to software transforming the industry?
Let’s take digital-first retailers as an example. They are way more experimental. They are used to this already – they try things out on a regular basis and if it doesn’t work, they drop it.
Experimental physical retail moves in the same direction but in contrast, in-store experiments might involve testing different store layouts, displays, or product placements to see which ones lead to more sales or customer engagement.
Traditional retailers, on the other hand, aren’t as fast moving and they don’t foster innovation because they’ve never had to, they’ve always relied on the strength of their brand to stay profitable. But traditional retailers can see the landscape changing. They see the disrupters setting up their concept stores and using their stores as marketing hubs and they are racing to try and keep up. The problem is their infrastructure is blocking them and stopping them from doing it.
So now they are being forced to innovate and, on the whole, they are, on the whole. They’ve set about recruiting talent to drive innovation and disruption. And this is what’s driving the transformation in traditional retailers because the ‘new blood’ is coming in and telling them that if they want to change then they need to decouple their system landscape to step into the future.
What are the benefits for retailers of having a MACH mindset?
MACH architecture is a prerequisite for experimentation, innovation, and finding out what works for your business. That’s one of the main purposes of having a loosely coupled system and it makes it much easier to find the right setup and fit that best serves your customers, store associates, and your business.
Many retailers still haven’t looked at what their customers actually need and want. And they need to be asking the most important questions of what customers want, what they need, and why they want it. This has to be the starting point, to actually commit to understanding the needs and wants of the customer because often the reality is much different to what people might think.
They need to be asking the most important questions of what customers want, what they need, and why they want it.
The next step is then to make sure you’re in a position where you can give your customers what they want whenever, and wherever, they want it.
Retail is all about removing friction and adding convenience.
If you can understand your customers better and have a loosely coupled IT architecture that allows you to experiment and innovate, then you can constantly create positive experiences by removing friction and adding convenience. With this kind of mindset, you can use platforms like Sitoo to build out things yourself based upon what your customers want and what your business needs. And, because all the software in the MACH Alliance has APIs to integrate with each other, it becomes easy and cost-effective to do this.
How would you summarize everything we’ve discussed?
Innovation and experimentation are crucial to the future of any retail organization. The role of technology should be to help retailers to offer seamless transactional experiences while incorporating brand discovery and storytelling. It all comes down to removing friction and adding convenience for the consumer.
Here are some key points to keep in mind:
Retailers can enhance shopping experiences by experimenting with different methods, being innovative, and adapting quickly.
Instead of being limited to a single software system, retailers should have the flexibility to choose the best components for their needs.
Creating an open and best-of-breed technology ecosystem is the best way to achieve this goal.
By using a SaaS, cloud-based, API-first approach, retailers can rent and test different systems as needed, while retaining control of their data.
If you don’t know where to start, the MACH Alliance ensures that the software retailers purchase delivers what it promises and can be integrated with other components of the ecosystem.
If you’d like to find out more about Sitoo POS and Unified Commerce Platform, and the different ways we can help your business, then we’d love to help you.
