In retail, “good enough” no longer is.
When the pressure is on, what instrumental changes can retailers make while staying true to their business and their brand? Upgrading your technology is the answer and, as a retailer, you’ve seen it. New technologies come into the market that enable new ways of shopping, but it’s not enough to know enabling omnichannel experiences is worth it; you’ve got to prove it. Whether you’re a smaller retailer, with a few locations under your reign, or you’re a corporate giant who rules everything in that market space, implementing new technology is “a ton” of a lot of things – time, money, training, buy-in, and so much more. With appropriate research, you should be able to show quantifiable ways this new software would improve the overall return on investment for the organization. And if the proof can’t be found, it likely means you need to find a new opportunity. Remember, you’re proving a case for new technology , not the new technology you feel a business should use, so leave those biases at the door!
And finding proof is easier said than done. A recent RSR report shows that 32% of retailers are challenged to quantify the return on investment that will be seen with a new technology. That same report shows that 25% of high-performing retailers are reluctant to invest in new technologies because of the cost their business incurs. But when the tide of competition is rising and there is a wave of new in-store upgrades that need to be made (we’re looking at you, omnichannel), the choices are simple: sink or swim.
But it’s not enough to be on the lifeboat ready to dive into the new technology waters, you have to convince the others — managers, executives, and decision-makers — to take that leap with you. The best way to do that is through a carefully researched, prepared, presented, and executed business case; the kind that can be put to the test and comes through on the other side, floating on top of your projected positive ROI.
Identify Your Stakeholders
Without the right eyes on your proposal, even the most well-crafted business case will falter. To start, evaluate who is best equipped and in the right position to review your case and make decisions based on your researched evidence. Make sure you’ve identified and included everyone who has a stake, taking as much input into account as possible. The earlier these decision-makers and influencers are involved, the more likely they are to support your case as they have had a hand in molding the final proposal. Not only that but with the right people in the room, you’ve got access to who you need to ensure every loose end is accounted for. No missing pieces of information here! Your lengthy stakeholder list should include employees from all levels; executive, managerial, and associate with employees from both the front-end and back-office consulted. The back-office team usually has a specific list of “must-haves” to ensure they’re getting the insights they need, the front-end team will be using this new technology day-in and day-out, and the upper management and executive teams have the decision making power and credit card limits to help bring this new software dream to reality.
A study by Cambridge University defined these critical stakeholder roles as the gatekeeper of information, the champions of the idea, and purchasing, finance, and advisory stakeholders. Hopefully that gives you any ideas of who to target!
Having quickly identified who should be in on the ground floor will mean you will have all the key pieces of information you need to make your case as strong and compelling as it can be. When defending your ideas after the proposal is complete, you’ll be confident you covered all your bases.
Determine the Business’s Needs and Do the Analysis
When you know your business is in need of a new retail technology, you’re not just saying so. Either key areas are not as efficient as they could be or parts of the business are falling flat in comparison to what a competitor can offer, and if you’re noticing this, it’s guaranteed that others are too. Lean on your key stakeholders and pick their brains for where the see these failings. As experts in their respective areas, they’ll have insights that will support your argument and help identify other gaps.
Throughout the analysis portion of your research, be sure to include feedback from real users. Whether they’re on the sales floor, in the back office, or managing relationships outside the traditional retail environment, they’ll have opinions on the current operations. These use-cases will not only help paint the full picture of why a new retail technology is needed, but will also help identify what the requirements for an effective solution are. For example, you may feel a pain point around your business’s inventory accuracy in your online store. Another stakeholder may express concerns about enabling Buy Online, Pick-Up In-Store (BOPIS). These tensions may be eased with a new store management or point-of-sale system with cloudbased functionality that integrates into the online store in real-time. This eliminates any inaccuracy in stock levels and ensures no out-of-stocks or overselling situations that provide a poor customer experience.
Determine the Real ROI Through Financial Analysis
When it comes to the analysis of financial viability for a new technology, there are always the traditional metrics like ROI and NPV to consider. And you know your decision-makers best, so if there’s a metric they find particularly intriguing or would find important when evaluating a new retail technology, it would be a substantial support to your case if you included it.
When conducting your financial analysis, break out your spreadsheet and keep track of everything. Look at all the costs associated with this potential investment and take note of all the associated benefits of the investment’s implementation. This is critical to the success of the business case during presentation since this final number will play a vital role in the approval of your proposal. With everything tracked in one place, stakeholders can easily check the assumptions you’ve made for costs, benefits, and risks.
Rank Your Needs
Forget Maslow, this is where you get to rank your business’s needs. Informed by your analysis, determine what are the reasons you started this business case in the first place; list what cause the largest pain points, what would create big opportunities, and what would be a game-changing addition to the processes stakeholders engage with. Here are some questions to get your evaluation going:
- What needs are most important?
- Which problems need to be addressed first?
- What are the software “must-haves”?
- What are the software “nice-to-haves”?
Answering these questions will help you to not only better argue your point, but will ensure your software solution actually fits the needs of your business. Imagine presenting a proposal for a technology that only meets the “nice-to-haves” without supplying those deal-breaker “must-haves.” That would mean your argument was lost even before you got going.
Identify Possible Solutions
Experts, like Forrester1 , suggest that you start the process of transforming your store with foundational technology that drives operational excellence before adding on the flashy, customer-facing solutions like smart-mirrors, chatbots, and VR. Not only do these robust solutions provide real support in the areas where your business may be needing help, they also provide a much easier path to proving ROI.
With so many stakeholders involved and so many users to get feedback from, you’re bound to have conflicting opinions and other alternatives offered up as the solution to the problem your case solves. To avoid a “too many cooks” type situation where a variety of options mean no new software is ever chosen.
With your pain points clearly labeled, you can clearly show which solutions are viable and provide that highly-sought-after ROI. Maybe the answer is a new inventory solution or perhaps a new e-commerce platform would do the trick. What if staying the course and maintaining the status quo is the best alternative?
Always include “doing nothing” as a viable option. It will clearly be the least appealing choice once you outline how it answers none of the previously established pain points and will show what will happen if action isn’t taken.
Take all these possible options and outline their benefits and detriments. Which will create the most opportunity for the business? Which will prove to make the disruptive pain points even bigger? Here’s an example:
If you don’t replace your legacy point-of-sale system, new processes like BOPIS cannot be enabled. If competitors offer fulfillment solutions like BOPIS, how will that impact sales, customer retention, or future growth? Will your competitor steal a percentage of your business because they offer BOPIS and you don’t?
And this is not to future-fear; this analysis and these hard-hitting questions ensure that, and the end of this process, you’re confident you’ve made the right technology choice.
After you’ve done the leg-work, pass your evaluations off to the stakeholders involved. It will be their task to read through your comments and provide feedback of their own. This where your spreadsheet will really prove helpful as it will be easy for these parties to rank solutions and for you to review their opinions.
1 The Future Of The Digital Store, Forrester Research, Inc., April 23, 2019
Revisit Business Needs
Now that you’ve ranked the needs of the business and put some serious thought into the various technology alternatives, it’s time to see where things line up. Remember why you started creating this business case in the first place; what problems were your business experiencing? What software provides the most solutions to your business’s problems? This is likely your best choice.
However, there may now be other considerations. From your evaluation and the comments garnered from your invested stakeholders, you may have uncovered new business needs, have new information to supplement your assumptions, or discovered possible added costs, risks, or benefits. This doesn’t mean you start from scratch! Revision of the needs of the business affords you the opportunity to adjust for these changes and revise your case to best match the needs identified. This business case is a living thing and should evolve throughout this process, being set in stone only after approved by stakeholders and key decision-makers.
It’s Pudding Time: Finding ROI Evidence
Without that delectable proof, there’s no way your advisory committee, stakeholder group, or even a single decision-maker is going to taste your positive return-promising pudding. That means it’s time to put your assumptions to the test and find out what the real results are. As Forrester puts it, “the ROI test favors a predictable cost reduction over product innovation.”2 So while you may be looking at a wide variety of product offerings that would be a viable solution to your business’s pain points, if it’s not cost-reducing, it’s not the best choice. If ROI is the be-all-end-all of whether or not a new technology is implemented — chances are, it is — it’s likely that making sure costs are reduced over time with this new solution is imperative to a finding that positive ROI proof you’re looking for.
As a level-set, the real equation of return on investment is this:
(BENEFITS OF INVESTMENT – COST OF INVESTMENT) /
COST OF INVESTMENT
The “benefits of the investment” would include both new revenue generated, and cost efficiencies generated directly from the investment in technology.
So, what are all the ways your business can find financial benefits in a new technology? You’ll want to find as many financial benefits as you can, to boost your resulting ROI. Here are some ideas:
- Winning additional sales by displaying virtual inventory when products are not available in the store.
- Increase in upselling, enabled through suggestive selling of complementary products.
- Inceased repeat business through technology that enables clienteling or automated sales outreach to your preferred clients.
- Increased sales through implementing fulfillment like drop ship, BOPIS, or ROPIS.
- And more.
One Forrester3 study even found that a 1-point increase in the Forrester CX Index™ score for bigbox retailers equates to a return of $2.44 annually per customer. Apply that to the level of product moved in your store, and that’s some serious money.
2 Build The Business Case For Fast, Connected Technology, Forrester Research, Inc., July 26, 2019
3 The ROI Of CX Transformation, Forrester Research, Inc., August 15, 2019
Improved inventory turnover – the big one. We don’t need to tell you how expensive holding inventory is, and while stock is an inevitable and integral part of your business, it’s also a huge risk. What if inventory doesn’t sell and mark-downs are needed? What if you experience an out-of-stock situation for a highly demanded item and your customer heads over to your competition? A comprehensive retail software will provide access to reporting and analytics that eradicate pain points, provide you with insight as to where your inventory is on a store and company-wide level and will provide huge cost savings through optimizing where your inventory is, so it can sell faster.
Reducing transaction and workaround time with integrated retail software. Some retail technologies have optimized integrations making them faster and more effective than ever before. What does this mean for you? Where are all of the areas that you could save on costs due by eliminating manual workarounds for managing non-integrated systems? Are transactions with the customer slowed? Do employees spend time entering data from one system to another, for instance?
Increased user productivity. A faster and more effective retail technology means employees in all areas of the business can do more with their day. Back-office employees can rectify inventory counts and reconcile general ledgers faster while front-end employees can process more transactions to sell more products in a day.
Reduction in downtime of your technology. What costs have you incurred when your technology goes down? Have you lost sales, or had to incur costs in maintenance and support to fix the problem? These costs could be eliminated with new, updated and, reliable technology.
Imagine an in-store process so full of friction it almost immediately caused customer dissatisfaction. Forrester4 reported a selling scenario where it took 8 minutes to add a spouse to a client’s credit card. The avoidable delay was due to a lack of connected software solutions when six separate software platforms were needed to complete the request. The same report challenged readers to think of what would happen if this 8-minute transaction was reduced to just 3 minutes. How many more customers could be served, and possible sales made, with a reduced transaction time?
All of this is possible with the help of well-equipped integrations. When you have the tools that enables retail software to communicate, it means incredible savings for your business and efficiencies for your overall operations.
Be sure to consider as many areas for potential cost savings. Here are some ideas:
Process Improvement with inventory counts:
Integrated inventory practices means accurate in-store counts so customers can count on you to always have what they’re looking for.
Improved Cultural Moral:
According to this Forbes article, employees who are happy in their work environment are 20% more productive than those who aren’t. What savings could you see here?
Higher Employee Longevity:
Studies have shown that the cost to train a new employee is approximately $1,200. Increased retention is achieved when an employee is empowered to do their job well, and a large part of that comes from employing effective and efficient retail tech so staff can do their job well. With a sturdy lineup of evidentiary support for your new technology, you’re ready to compile and present. Don’t worry – you’ve got this!
4 Build The Business Case For Fast, Connected Technology, Forrester Research, Inc., July 26, 2019
Put Your Best Business Case Forward
You rolled up your sleeves, got deep into the numbers, and dug through the inputs, opinions, and options that would make your argument the most well-rounded it could be. Your presentation is all that is left and it’s your homecoming, your 3-point shot at the buzzer, your pause at the top of a rollercoaster before taking that fun-filled plunge. You’ve put in the work to get here, so now’s your chance to convince the decision-making team.
Before you set up the projector and provide the ROI benefits, be sure you’ve had the last round of influencer buy-in. With their input given at every stage, you’ll get:
- An accurate gauge of what the final decision-makers will need to be convinced.
- An informed business case with metrics that final decision-makers actually care about.
And while it may be painstaking or take some time, get this feedback in an iterative fashion to have these key influencers completely on board with your initiative. Adhere to any requests for change and answer any questions that come up when these bought-in parties bring them up.
Now, the first rule for any writer worth their weight in words is to know your audience. The same rule applies for writers of a business proposal. Keep your audience in mind; in this case, all decision-makers. Report on and prove value for things that they would actually care about. Incorporate all your research based on the feedback from all stakeholders and show these decision-makers why they matter on a large, company-wide scale.
When you’re preparing for to present your ideas, be sure to have some proposal advocates in the room who support your idea and can provide you with some echoing opinions that your proposal provides the best solutions for the business’s current pain points.
But having these comrades won’t be enough; you need to be adequately prepared for the questions that will arise and the skepticism from these decision-makers. After all, it is their role to make choices that positively influence the business as a whole.
Here are some things you’ll want to include when you’re making your case:
User stories of in-store pain points:
Big or small, one-offs or recurring, any issues experienced by users of your current retail software system are always an influential selling point. It gives an emotional connection to the inabilities of current systems and outlines the human element to why things need to be better.
Plot a map up to the why:
The real frictions of real employees aren’t just anecdotal; they’re experiential examples of why a new software is necessary. With these stories invoking feelings of understanding with decision-makers, it’s time to clearly lay out the reasons why a new software would alleviate these issues and provide an increase in ROI.
Demonstrate the positive impact new software will have:
The many forms of ROI are more than enough points of impact that a new point-of-sale solution would have on your business.
Include user Feedback:
Alongside these second-hand accounts of in-store and back-office issues, have product users provide feedback in their own words of what causes them the most grief and what would make them more effective, efficient, and accurate in their day-to-day roles.
While all of the above are nice additives to your proposal, decision-makers will be after one vital piece of analysis: business impact. Not only does this include procedural changes a new software will force, leaders will also be looking for financial, cultural, brand, customer satisfaction, and any other impacts that would influence ROI. They will expect that not only are you including these into your decision-making process but also that you’ve fully explored the implications of each area, ensuring that the benefits far outweigh the costs.
Once you’ve walked the room through all of the above, answered their questions, and supplied all the background knowledge you can, it’s time to list the next steps. Start by listing all of the options (including the groan-worthy “remain the status quo”) of potential technologies and give an analysis of each. This is the first place where you can keep it simple; your audience will have had a lot to digest so ensuring they can still devour your options is important; think of your option analysis as ice cream after a large meal – there’s always room for ice cream. Stick to your top two or three contenders and outline the projected ROI for each, if chosen. Include the risks and benefits so that each option can be easily weighed against the other and, if applicable, a clear winner can be seen.
If you consult the Harvard Business Review, they recommend that you have a short and long version of your presentation at the ready so that you can adjust for time if necessary. With both documents prepared, you’ll be able to pivot during your presentation without skipping a beat – a confidencefilled and impressive move that is sure to aid in the success of your proposal.
Once you’ve said your piece, you may be questioned and a decision made on the spot, or follow up may be needed. Eventually, a decision will finally be made.
Keep in mind that if your recommendation isn’t chosen, this isn’t the end of the conversation; timing, budget for the remainder of the year, upcoming initiatives, incoming hires, or a loss of personnel are a few of the many reasons a new technology could be put on the backburner. The important thing is that you have a strong case to use when the time is right.
If your proposal is accepted, the first thing to do is pat yourself on the back. We knew you could do it! But after that’s done, use that feeling of wellearned success and channel it into helping with the implementation process. Being that you were the lead in the research, it’s likely that decision-makers and influencers will come to you as the resident new technology expert and ask you questions as they move towards rollout. Be ready to get involved as a key player in the success of this new technology and be willing to be a point of contact or intermediary between your business and the solution provider. And while you may not get fireworks to commemorate your triumphs, you can rest assured that users in all areas of operations are praising your name – you’ve just made their day easier, helped to please more customers, and lock in increased ROI.