In the last year, the big majority of all software investments have been focused on enabling Unified Commerce. Jens Levin, CEO and co-found of Sitoo, sat down with Rod Kilgour, CIO at Tiger of Sweden, to share their experiences on the changing IT architectural landscape and dig into what successful retailers are doing to surf the wave of transformation, as they assemble the right pieces of the retail puzzle.
The need for Unified Commerce in retail begins with changing customer behaviour and the quest to provide the ultimate customer experience. It’s not solely a key component for retail to survive, but also to thrive.
The top five takeaways from this this meeting
Customer expectations steer the way
Think of the IT structure as a puzzle
Mindset and bravery is key
Choose your puzzle pieces with care
A final advice
Customer expectations steer the way
“Everything starts with changing customer behaviour. It’s vital for retailers to set the right foundation in the organization to be able to meet our new way of shopping - and to be able to adapt once again, as the shopping behavior keeps transforming,” says Jens Levin, CEO at Sitoo
It's not just the behaviour, it’s the expectations and the demand of the customers.- Rod Kilgour, CIO at Tiger of Sweden
“If I walk into one of our stores in Copenhagen Airport and buy a piece of clothing that doesn't fit me, I want to be able to return it in Stockholm when I arrive there. From an IT perspective this can actually put a lot of strain on an organization. Especially for one like our own that is a predominantly brick-and-mortar setup, and in the last 12 months we’ve seen a dramatic increase in the ecom business which has led us to initiate various activities to meet that demand but also to deliver a seamless ‘one experience’ wherever you happen to come across Tiger of Sweden.” When Rod Kilgour joined Tiger of Sweden as CIO the company was in the initial phases of looking at a mobile POS solution. They saw this investment as a first step to being able to break down the silos between their different channels of distribution.Before they chose Sitoo, Tiger of Sweden had a complex and complicated IT infrastructure. Now, they are laying the groundwork for a new reality, both in terms of scale and stability. Rod argues that retail businesses have to be agile and flexible to not only to survive, but to thrive
We have a clear strategy to modularize our IT application architecture making it as simple as possible to scale as we need to and change as we want to, and not in any way be constrained.- Rod Kilgour
Rod explains and adds that Tiger of Sweden would have been in a different situation today, given the last 12 months, if they hadn’t transformed their IT architecture to respond and react proactively to events outside of their control.
Think of the IT structure as a puzzle
In the legacy world, a set up surrounding vendor functionality and functionality requests are common. Modern IT customization is something else - today it’s about building your own retail puzzle.
The IT department has to create, own and control their own IT puzzle.- Jens Levin, CEO and co-found of Sitoo
Jens Levin highlights that the IT department has to create, own and control their own IT puzzle. This means that you have to find best-of-breed solutions that fit into your puzzle; POS, ERP, Ecom, PIM, Payments and so on. All of these puzzle pieces are built on modern technology, are API first and easy to integrate to fit with the other puzzle pieces. “Think about what a new puzzle piece can enable for your business. This puzzle piece does not have to solve everything, just one piece of the puzzle, but it also has to be able to enable other pieces in the puzzle. With this puzzle mindset you’re in a much better position to gain the speed you need to keep up with the customers requirements,” says Jens Levin. “The IT architecture landscape as a puzzle is a clever way of looking at it because you want to be able to find other puzzle pieces that work in the same manner without having to redesign everything,” Rod adds to the discussion. “At the onset of Covid we took a bold decision to look at if we should make the investment to transform. We started with replacing the puzzle pieces with the focus being on the customer. It’s a choice we've made to change the experience at the frontend first.”“Now we are looking at the core components of our application infrastructure. The next step will be to embark on a complete transformation replacing the internal organs that aren't facing the customer but have a key role to play in facing the customer, and that will take us 2-3 years.
Mindset and bravery is key
To be successful in today's environment you have to start with changing your mindset. Jens Levin points to three key factors; being brave, open minded and curious. If you have the courage to try new things and change the way you look at things you will be able to adapt to the new expectations of your customers.
How can you become the best in what you do?- Jens Levin
“You have to focus on how to meet your customer, which means you have to be passionate about this topic and have a dialogue about this within your business. How can we become the best in what we do?” Jens asks.“There are retailers out there that are afraid of making necessary changes. When you do a transformation like this there are a lot of challenges, so you need to have the right mindset and be there and love to solve challenges. That’s why a lot of retailers are holding back.”Rod adds: “We have decided that it’s time to embark on this journey and know that it will consume a lot of energy from the whole organization, but we must progress the development of our business - we can't stand still. It’s a challenging but exciting time, and like Jens said - you have to be brave. Sitting on the edge and watching, maybe you won't exist in five years time.
Choose your puzzle pieces with care
It’s important to investigate the APIs when looking at a new piece of the puzzle. Go for a software provider with the focus on becoming the best player in their field, with a passion for creating the best possible APIs. This will give you a solid foundation to build on in the future. “No one knows what will happen in three or five years from now, so you don’t want to end up in a backseat situation where you can't control the puzzle. You need to be the driver,” says Jens Levin. Rod explains: “We sat on a legacy infrastructure and we are dismantling it piece by piece, replacing it with solutions that are fit for purpose for our future growth and interchangeable. In this journey we have been able to take out a lot of costs because of the things we have replaced and move to a solution that is delivered on time, within budget and appreciated by the users.”According to Jens, cost is also one of the two main benefits when thinking of modern customization.“If you look at the run rate cost, in our experience, most of our retailers transforming their business into this kind of puzzle usually have a run rate saving of up to 50% when they have undergone their transformation,” he says
It’s really about giving the organization the right foundation to be flexible. I don't want IT to be the break in the organization, it should be the enabler, not a prohibiter.- Jens Levin
The second benefit of modern customization is speed of development. Every vendor is supposed to be the best in their sector, not requiring the retailer to invent new functionality and upgrades themselves. This means you need to find a puzzle piece that fits your business; a retailer needs a retail puzzle and nothing else. For Tiger of Sweden, moving forward, it’s important to choose puzzle pieces that are right for their business today and allow them to grow in the future. Rod says: “In contrast to my experience in the 90s, we no longer want one partner to supply everything for us. It is necessary to think about what every partner does for us and how they interact with the other partners we have in our portfolio”
A final advice
“There's no time to waste, you have to address things in a smart order, that gives you the ability to put your head above the water and take the next breath and move on. In contrast to my experience in the past, focus on things that really give competitive differentiation and not spend any time on anything that is commodity. Focus on the things that either increase sales, improve operational efficiency and provide a fantastic customer experience,” says Rod
Focus on the things that either increase sales, improve operational efficiency and provide a fantastic customer experience.- Rod Kilgour
Jens concludes: “To be able to meet the requirements from the customers you might need to do some radical changes, and this transformation has to start now. Prepare yourself for challenges, and that it will require investment in the entire organization. You have no time to lose - the digitalization will not stop and the speed will probably accelerate. Start this transformation and build the right foundation in your company so you can meet the new needs of consumers.”
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