If you follow our blog, then you probably know all about our latest webcast with Aéropostale’s SVP of Planning and Allocation, Karen Walter, who sat down with us last month to talk about how her team is embracing advanced analytics in today's evolving retail landscape.
One of the biggest themes throughout our conversation focused on digital transformation.
This is, by far, one of the most prominent themes overtaking the industry as legacy retailers frantically search for new technology solutions to respond quickly to the changing demands tugging at their shirttails in fifty different directions.
However, a defining factor rooted in some of these struggles is an inability to effectively adapt traditional, existing business processes with transformative data-driven, technology initiatives.
"Gartner's retail clients are rightfully concerned about how to accomplish the herculean task of transforming a traditional, multichannel retailer into a digitally enabled provider of unified retail commerce." - Robert Hetu, Gartner, 2018 Retail CIO Agenda
Furthermore, some of the questions plaguing many retailers in this position, according to Gartner, include the following:
- How should we prioritize new technology investments?
- How do we gain consensus across the business?
- How do we effectively manage organizational change?
These questions may appear simple, but they're far from it. Adopting a new technology is a huge undertaking, and figuring out the best way to go about it will be slightly different and unique to every organization.
In our Q&A with Aéropostale, Karen shares her experience when dealing with new technology adoption and some of the challenges she faced along the way.
Read on to see what Karen has to say below!
Q: What’s the process like internally when considering business process changes or new technology adoptions?
For us here at Aéropostale, and anywhere else I’d be for that matter, the core principle holds true: sharing information (constantly!) with business partners is 100% essential to honestly getting anything done and being aligned on what should be done.
Holding onto information doesn’t benefit anybody. At Aéropostale, we’re expected (but also obviously like to) make sure other cross-functional teams and business partners understand what’s going on with the business.
What the opportunities are, what different groups are seeing, and how they’re seeing it.
Once you have a network where people are really talking to each other, the process for even considering a “business process” change or a new technology adoption becomes easier to conceptualize.
It doesn’t make it easier to actually do, but it does help when everyone can see the opportunity is there. It’s much harder to convince someone to change their process if they don’t know why they’re changing it.
It sounds easy, but at a bigger company when there’s a large number of people running a million miles a minute, you’re actually not as connected as you think you are.
Getting involved and sharing information—once people are connected, the change pretty much becomes obvious to the whole group. Then you’ve gone through that hurdle.
The same thing with technology. When the opportunity is there, and everyone can see it, then it becomes about: “Where do we want to start” or “Which product do we want to go use”?
However, you must have everybody understand there is an opportunity before you can go after it.
Q: Are there varying levels of complexity, in your eyes, when it comes to these steps for technology adoption?
It definitely varies depending on the size of the prize you’re going after.
The opportunities that cross multiple channels or multiple cross-functional teams are the ones that are going to be lengthy, more expensive, and more time-consuming. However, even on a smaller opportunity, I still go through these steps. You just might be able to move through them much quicker.
Our project, in relation to Celect, was definitely one of the bigger projects we’ve taken on as a company. As for identifying the problem, we just wanted to buy much less inventory than we had in the past. We want to make the smartest bets we can.
We knew it was going to be difficult with our history, because the last couple of years were not something anyone wants to repeat.
So, what is our problem? Our problem is we wanted to buy less inventory, and maybe we didn’t have our own solid history to tell us what we should be investing in.
Those needed some conversations.
Once you get design, production, merchandising, planning, and financing aligned around the benefits of buying less inventory—the opportunity became very clear to a lot of groups.
It’s less styles, less shipments going to stores, less management at the store level.
There’s a whole host of benefits!
This was one of our big hurdles—just wrapping our head around the concept that it’s okay to buy less inventory.
Q: It’s also having the confidence, right Karen? Having the confidence to make the right decisions about the inventory you’re buying. Making sure you’re not cutting out the wrong things that might be in demand.
Yes. You do need to have the confidence, and a tool to help you gain the confidence to continue to make those decisions (especially given our previous financial situation) was something we were really looking for. It was just going to make things a lot easier to take that step.
Now, when it comes to cross-functional buy-in, you have to make sure everybody is at a place where they can participate in a new technology at that time.
Is everybody in a good place to be able to take this on right now? Is there another priority or another project already in the works that’s going to impact one of the teams that needs to be involved?
You have to find the right timing for that cross-functional buy-in (assuming everyone bought into the problem you want to solve).
Following this, in the process for technology adoption, we go into quite a bit of shopping.
I absolutely love this story because it’s 100% true: the reason I found out about Celect was because my IT counterpart was doing a reference for somebody and they were speaking with Celect.
Because we talk all the time and we have a solid understanding about what our business priorities were, what we were struggling with, and what we were trying to solve for – he brought Celect to me.
This speaks to the connectivity.
It speaks to fact everybody really understood what we’re trying to accomplish. Obviously, we shopped around, but we ultimately went with Celect.
There are many people trying to help companies solve these kinds of issues, and you just have to find the right one for you. Which one is going to be the smartest and fastest for you to gain benefits from?
After this, you need to prove it out. In order to spend money, you have to be able to prove that you’re going to get your return back.
There are a lot of ways to do it. Different testing, some modeling. We chose to actually do a full-blown pilot with Celect so we could really get the financial benefits, actual metrics, and change expectations.
Then, we built it into our structural financial plan year, so there was no question about whether Celect was going to be beneficial. It’s going to be beneficial because we planned it into the financials.
I think that’s where a lot of companies are. There’s no longer the freedom to spend without the guarantee of a return, and you’re going to have to sign up for those returns to push it forward.
Then, obviously continue to measure and fine tune to get the most benefits.
*Check out Part One from our Q&A with Aéropostale in last week's post! You can also access the full on-demand webcast replay below.