Selling tech to retailers: what you need to know after NRF
After three days at NRF, I definitely have something to say about how getting retailers to see and choose your tech has and will continue to change. Clearly, not all retailers are the same; some don’t like innovation and they don’t like working with people they don’t know. They would rather work with old tech from old vendors and avoid any shocks that might end with them having to work differently or even in a new company altogether after the tech makes their role redundant.
And then there are the retailers who don’t necessarily choose to break their businesses in an attempt to catch up to the customer, but who recognise that they can’t go on as they are now, part of which can mean listening to vendors who themselves live in bubbles that simply echo their own and their products’ limitations.
And so, retail is polarising into dinosaurs and dynamos, a clear division that is writ large in the UK, and which is starting to emerge in the US, where too many retailers in too many stores carrying too much stock stored in the all the wrong places, are chasing too little disposable income from consumers who still want stuff but who also want experience, service, subscription purchase and a clear commitment on returns and reuse, and both authentic and demonstrable philanthropy.
So, here are four tips for marketing and selling to the retailers at the sunnier end of the spectrum, those that are making big changes in their businesses and recognise the key enabling role that tech plays. Dinosaurs can still sell tech to dinosaurs of course, but I’m not interested in the dark end of the spectrum.
- Think big
No one transformed their business by thinking small. It’s important that both parties are on the same page in terms of what the retailer is trying to do and that requires the vendor to invest more in discovery at the beginning of the journey. Now is the time to think the unthinkable and worry about whether it can get done later. Retailers can tend to follow each other and this is clearly not working any more. Years of chain store thinking driven by shareholders, chief finance officers, portfolio CEOs, and media and analyst commentary have made a lot of retail very boring. No wonder so many consumers want less stuff, when the acquiring of that stuff has become so one-dimensional and mechanical.
- Think basics
Wary of contradicting myself, I say, many retailers wanting to embrace the future are not well geared to embrace the present; how else can it be that so many of them had such a positive Holiday and Christmas but made no profit? They simply can’t fulfil demand profitably, so often because they simply do not have the basics right – too much stock in the wrong place; too much stock that is not available to commerce; too much stock on discount to customers who are cherry pickers; and, too much stock that has not been optimally merchandised.
This all means that there is a great need for the foundation tech that will enable retailers to get better at these fundamental retail tasks. Single view of stock, product and order still remains a challenge for many retailers. Fix those, and any retailer is ready for the next step.
- Think customers
A big theme at NRF 2019 was personalisation; understand the customer from every angle and then build the business around them. Achieving this is a huge existential threat to almost any retailer, because it requires a retail model that is only now starting to emerge and which will take time to develop. Vendors are starting to work more collaboratively with retailers to achieve this, where risk and reward are baked in rather than a contractual negotiation option. However, collaboration requires a deeper cultural fit than is common between both parties and we saw an example at NRF of a major vendor badly misjudging what this actually means. It does not mean trying to be more like a retailer, far from it, but it does mean facing the challenges from the same viewpoint.
- Think communication
The largely standoffish even adversarial relationship between retailers and vendors, when it comes to sharing success in the public domain, and which I think has got worse in the last 10 years, can’t continue. Retailers should be more open in acknowledging the contribution that tech and its vendors are making to new retail. Sure, I get all that nonsense about having to manage the information flow for the sake of the share price, but a more open retailer will get a deeper investment from the vendor at a time when tech has never been more critical to the future of retail. It is therefore incumbent on the vendor to keep building publicity permissions into the contract and sharing public platforms like NRF.