Keys to Success In a Fragile Recovery
How to capture new IT investments created by emerging business challenges.

Reprinted with permission

By Adam Ortlieb, Associate Director, Marketing, Seiko Instruments USA
www.siiprinters.com

Several recent developments have added new complexities to the existing challenge of competing in a fragile economic recovery. Higher oil and raw material prices, supply chain delays because of the disaster in Japan, and a stubborn unemployment rate have all had an impact in the first half of 2011. As a result, customer expectations have evolved, prompting retailers to rethink how they continue to engage end users.

To successfully negotiate this environment, retailers have to work closely with solution providers to implement unique solutions that impact top-line and bottom-line results. Doing so proactively is now a business imperative. Retailers that are employing this strategy effectively will create separation from their competition. For solution providers to capture the opportunities created by these business problems, the need for securing the right partnerships cannot be overstated. It is critical to align with suppliers offering the right technologies and an elite level of support, within the framework of a business model that facilitates profitability for both the manufacturer and the reseller.

A Challenging Environment
Many entered 2011 with a sense of optimism that has been somewhat dampened by the unforeseen circumstances mentioned above. Overall sentiment on the economy still tends to suggest a continuation of a modest recovery. But, consumers' preferences and expectations have evolved, and they are also armed with real-time mobile access, offering even more information alternatives than ever before.

In response, retailers must proactively address these challenges, and an effective response means making strategic technology investments that deliver return on investment. "The biggest mistake a retailer could make this year is not going on the offensive and making smart, targeted IT investments, writes Jeff Roster, Vice President for Gartner Research. "Begin the process, if you haven't already, of rethinking your customer touch points and becoming more relevant to your shoppers."

Where Are Retailers Investing?
According to the recent Retail Technology Study from RIS News magazine, only 20% of surveyed retailers have up-to-date technology in place for multichannel fulfillment, but another 46% are in process or plan to roll out new technology in the next one or two years. This example clearly illustrates an initiative that retailers are investing in to seize a competitive advantage. Digital signage and kiosks are also platforms that savvy retailers are deploying to gain an edge. In the same survey, 17% of respondents acknowledged having up-to-date kiosks deployed, but another 33% are either working toward completion or plan to complete roll-outs in the next one to two years.

Proactive retail companies are also exploring or launching programs in various other areas, such as business analytics for customer segmentation, loyalty programs, and cross-channel recognition. Mobile payment solutions are also being widely tested by retailers.

Capturing these targeted investments means demonstrating competency as a trusted adviser with application-specific expertise, and solving these business problems with the proper products and services. As an example, helping the customer clearly understand the total cost of ownership is critical to formulate realistic financial projections. Consumer-class mobile devices offer unique benefits, but commercial grade solutions may ultimately be the right choice based on durability, security and other application requirements. A similar calculation is clearly required for more conventional POS hardware evaluations. Generally, any up-front savings from cut-rate peripherals will be eclipsed by the longer term costs of reliability issues in the field.

Why Partnerships Matter
In order to put all the pieces together, solution providers must align with partners and suppliers that deliver the right capabilities. A straightforward requirement is for proven products that integrate easily and don't introduce unnecessary complexities for end users. Also, global brand recognition that evokes confidence from end users helps alleviate buyers' concerns from the beginning. It is also important to maintain a flawless reputation for precision engineering and quality that is continually proven in pilot programs and project roll-outs. But beyond this product-centric focus, a sharper focus on service and business viability is now paramount. The bottom line: Look for suppliers that deliver a level of support that will enable you to execute, but are also willing to engage based on a framework that facilitates mutual profitability.

Lingering economic uncertainty has continued to restrain a more robust recovery. This phenomenon, coupled with evolving consumer expectations, is compelling retailers to become more innovative and proactive, and in turn more reliant on solution providers who can solve business problems. To be best-positioned for success, solution providers should look to partner with suppliers that meet important product-related requirements, deliver an elite level of support, and operate based on a business model that stresses mutual financial success.