Opinion: Retail Collaboration
By Danny Rappaport, PMC Director of Consulting
Do you ever look at the “You may also like...” recommendations on Shopify or other e-commerce sites?
Do you grumpily dismiss them knowing this is just another way to get you to spend more money or do you recognise these suggestions come from some smart analysis of your and others history and they may well be good suggestions? For me it depends on the mood I’m in but also the quality of the insight the suggestions represent.
The simple “convenience bundle” suggestion, do you need more cartridges for your printer? Or “accessories” in the same range based on “you’ve got the hat, would you like the scarf?” is well understood but the collaboration between different brands who co-identify their target market and share a vision is a long tradition also.
BMW and Mont Blanc are a great example of a shared target market and a common vision of premium brand and quality. The cross-sell advantages are obvious.
Chemistry. When Adrenaline meets Caffeine!
Collaboration begins when two people (or companies) partner. Partnership is the beginning and essence of collaboration. It's hard to say what makes some partnerships work and others fail, but sometimes it’s just “chemistry”
Go Pro and Red Bull. This partnership is very strategic for GoPro,” said Nicholas Woodman, founder and CEO of GoPro®. “We share the same vision…to inspire the world to live a bigger life. ... GoPro and Red Bull, as a match, are as good as it gets. Sometimes described this deal as “adrenaline meets caffeine”.
So, does collaboration provide better results? Well as the phenomena of Retail platforms like Shopify, Ebay and Amazon get a bigger and bigger share of the market the answer would seem to be yes.
By sharing a platform, the brands on the platform collaborate to bring the Customer everything they need in one place. They may not be collaborating in promoting each other’s brands but by sharing a platform they share the most important part of retail, the Customer.
"The one-stop-shop idea is not necessarily about synergy between products but about knowledge of the Customer.”
If the platform is wide enough like Ebay it represents an online version of the “high street” with every conceivable specialist store.
All the benefits of the “supermarket” one stop shop with the availability and specialism of independent traders. The richer the product set and the larger the client base the better those predictions of what we might like could get. It’s our collaboration as Customers in sharing our data that makes it all possible though.
Specialist vs General
Just as Retail has its specialists and general stores/one-stop-shops, so do the providers of systems that support them.
For years there has been the debate about the “best of breed” solutions versus what became known as “Retail Enterprise solutions” or Retail ERPs.
The early Retail Enterprise systems were monolithic and tried to cover all processes from pre-season planning and forecasting to warehouse management with everything in between, but just like people who try and master all trades they didn’t really succeed in everything.
They were wide, but not deep.
The architecture of these systems mainly reflected the pre-cloud three tier client-server design of the time and became an industry for large teams to implement, support and change. Often, they were changed from the vanilla product and became unwieldy to upgrade or support.
The alternative of trying to knit together best of breed solutions based on different technologies, data structures and design principles was just as daunting. It’s no wonder there are so many legacy estates in Retail that are in need of change.
Then came cloud and the advent of API’s and middleware with cloud-based applications and Software as a Service its now possible to use Micro Services Architecture to create a new version of best of breed applications that actually work together and can be changed one step at a time.
This new world where specialist applications can work together is akin to a team of experts, each one a leader in their field working in collaboration. If there is one thing, we’ve all learned to listen to in the last couple of years its experts..
One step at a time – A New Architecture.
So now we can build a framework (or a New Architecture) to connect these systems together, what now? So what?
One reason that so many large Retail change programmes failed was because they tried to make too big a change at one time.
The “big bang” approach was sometimes unavoidable but never easy to do. The opportunity to make changes in a modular way and without high risk associated with major change means not all decisions need to be made at once and can be made one step at a time.
So, recognising the strengths in individual products and the applicability to individual businesses makes the mix and match approach much more tailored to the needs of the Retailer.
There will always be those that prefer the one stop shop and depending on the operation that may well be the right solution but finally, it’s nice to have the choice.
Personally, I find the idea of this new Architecture a great opportunity for collaboration, between disciplines, companies, and Customers. The new Architecture makes this collaboration deeper and better than has ever been possible before.
We can’t all be good at everything but when we recognise the expertise of others and collaborate, we all succeed.
Danny Rappaport is Consulting Director at PMC
Danny joined PMC as Director of Consulting in October 2021. He joins from Capgemini, where he was a Vice President in the UK, operating across verticals including Finance and Retail. Danny brings a wealth of experience in providing technology and business services to the retail, finance and CPG sectors, having worked in senior executive level positions in the UK, the Netherlands and India.
Danny has worked in a variety of roles in Retail, CPG and Financial Services in sales, delivery and consulting. Danny is extremely passionate about our markets and the opportunities that exist for our customers in today’s global digital economy.
This opinion article was first published by Danny via LinkedIn in February 2022