Opportunity: Technological Change

This is number fifteen in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we take a look at Stanyon’s third Challenge (opportunity), "the speed and overwhelming nature of technological change."

"Fear and Hope."  According to Stanyon, the small retailer fears the cost, complexity, and change of modern technology.  He/she hopes that the powerful benefits of inventory control and customer information will be worth it.  If hope doesn’t exceed fear, then nothing will happen and we’ll be left in the dust of more hopeful competitors.

For the most part, fast paced change also equals rapidly falling costs.  As we’ve discussed before (Point of Sale Systems, More on Point of Sale Systems), a complete retail automation system for a one-two store independent can be had for well under $10,000.  It hasn’t been that long ago that such a system was out of reach of all but the largest retailers.  The systems are more reliable and user-friendly than they were just a few years ago.  You no longer have to hire a high-tech (meaning high priced) computer expert to install your system.

So, why have many retailers resisted modern information technology?  According to Stanyon, it may be that the independent business person is just too busy to install the tools that would make his/her job easier.  We all have a tendency to spend our time on what Stephen Covey calls "urgent/not important" items, ignoring the "important/not urgent". (The Seven Habits of Highly Successful People.)  In some cases it’s fear of technology, especially among  baby boomers.  In other cases, it’s a lack of understanding of just what business automation can do.  "The real future power of intelligent POS systems can be found more in the customer tracking benefits than in the product/inventory tracking uses."

What???  How can that be?  Isn’t the ability to balance the books and control the inventory the most important part of retail automation?  In a word, "NO".  The bookkeeping piece of retail automation levels the playing field between large and small retailers.  Customer relationship management  is where you can leave the big guys (and the other small guys) in the dust.

Wal*Mart isn’t going to send its customer a post card thanking them for buying a particular widget and offering them a special discount on widget accessories.  Circuit City isn’t going to send a birthday card with a reminder that they just got a shipment of accessories for the (insert product here) that the customer bought last month.  Mrs. Preferred Shopper isn’t going to get a personal invitation to an after-hours event exclusively for customers who bought an XYZ in the last six months.

Having a needed item in stock isn’t going to make you stand out (unless you’re the only store in town that has it), but regular, personalized contacts sure will.


The Internet is another area of opportunity for the independent retailer.  While many of us think of the Internet as something that allows distant merchants to steal our customers, actual selling over the web is a small percentage of total retail sales.  The same fears that keep many business people from embracing technology also prevent most consumers from becoming hard line net shoppers.  While Amazon.com and a few others seem to have mastered the art (science?) of on-line selling, most consumer visits to the World Wide Web are to gather information, not to buy.

They may be looking for product information or they may be looking for their nearest retailer.  In either case, when they search on your particular widget, they should find YOU.  Every retailer should have a presence on the Internet, preferably an information-packed web site.  Web design is more affordable than ever.  While we would never recommend a cheap-looking site, a simple, elegant site is very affordable.  Using pay per click advertising and search engine optimization, you can drive potential customers to your site.  Then, when they’re ready to buy, they’ll come to you and not your competitor.

There are even free tools that will help your potential customers find you, like the free coupons on Google Maps.

You may or may not want to sell over your web site.  Experience shows that, unless you’re committed to spending a lot of time and money on an e-commerce site, it’s unlikely to be profitable, or even pay for itself.  You’re probably better off just providing information. 

A more detailed discussion of the mechanics of POS and web technology is beyond the scope of this particular post, but I’ve provided a few links below to some more in-depth information. 

Let’s just say that in today’s world, you can move forward or you can fall behind but staying the same really isn’t an option.

Links to more information:

Dell’s QuickBooks
Microsoft’s Point of Sale System
POS article from CNET.com
"Buying Online Ads for a Local Audience" from the Wall Street Journal
"How to Get the Most from Online Directories" also from the Wall Street Journal
Wikipedia article on Point of Sale Systems

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