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As retail – traditionally seen as being among the laggards in adopting new technology – moves to the cutting edge with innovations in areas such as analytics, radio frequency identification and augmented reality, so senior managers need to develop a more profound understanding of IT.
The consequences of a company not having tech savvy-managers are likely to be increasingly expensive. According to Jonathan Reynolds, director of the Oxford Institute of Retail Management and an associate professor in retail marketing, without better knowledge of IT senior staff will face difficulties. He says they will be prone to adopting solutions that are difficult to support, they will struggle with integrating distribution channels, face mounting costs, risk alienating customers and fail to get deliver hoped-for cost benefits. There is also a danger of missing out on a technology that can provide a competitive edge.
Mr Reynolds says managers generally have a decent knowledge of the hardware in the industry as its capabilities are quite tangible, but their grasp of new software applications is more limited, partly because so many are becoming available and it is difficult to assess how important they can be. Also, he doubts that many have the data analytics skills that are becoming increasingly important.
“A regular manager is presented with a weekly dashboard and being able to interpret the insights from that dashboard can be quite challenging,” he says. “Google Analytics will present the results of a campaign, but interpreting that can be difficult for the general manager and they need some expertise to do so.”
Mr Reynolds sees the roots of the problem in a combination of factors. The people who come out of universities with high level IT skills are often attracted to industries such as software engineering, gaming or media that can offer higher salaries and are seen as more exciting. Plenty of tech-savvy graduates want to work in online retailing, but fewer attracted to the in-store model.
In addition, retailers have been slow to train their existing workforces, often hiring a handful of experts when the need becomes urgent. But there are some signs that point to a growing confidence in the industry.
IT solutions and services company Logicalis recently investigated the sector for its Retail IT Survey 2014, and found that business leaders are becoming more assertive on IT issues. More than half believed that they already had the knowledge to take control of IT decisions, especially in the areas of data analytics, cloud computing and mobile technology, which they see as being important to any customer-facing initiatives.
“The people who are more likely to keep up with what’s going on in technology are the non-IT people,” says Chris Gabriel, chief technology officer at Logicalis. “If you’re deep into product design, or logistics, or the tills at the front of the store, I think you’ll be more likely to pick up on the technology transformation in your space than the traditional IT person.”
This is largely due to the IT specialists remaining in their silos, dedicated to maintaining back end systems and infrastructure with no need to keep an eye on operational efficiencies or the customer experience. Mr Gabriel says that one priority will be a better alignment between managers of business lines and the IT specialists who can assess how well a new technology would work with existing systems, and suggests that the role of chief digital officer – someone who converts traditional business operations to online ones – could become increasingly important.
There is also a generational factor, as younger retail managers have grown up using IT and expect it to develop. Mr Reynolds says this can be the basis for reverse mentoring, in which a younger manager is brought in to work with more experienced people largely to provide technological insights.
He also points to retailers such as John Lewis and Tesco running “programming jams”, in which developers from small companies are brought together for a day or two to work with managers from bigger companies on software programmes, which helps to increase knowledge among senior staff.
There have also been initiatives to train people through experience, bringing groups of managers together to work on IT projects. Mr Reynolds says these can provide interesting challenges, teach people about how technology can support their line of business, and do a lot to improve the retention of skilled employees.
He emphasises, however, that retail has to sell itself more aggressively to potential managers with a strong grasp of what IT can do.
“Industry also has to shout more loudly about the opportunities available,” he says. “Traditional retailers need to hitch their wagon to the cool aspects of online retailing and use it to their advantage. It’s a presentational thing, raising awareness of opportunities in the sector, and reaching out to universities, colleges and schools to make the case.”