Your success as an ISV is always related to how well the applications you develop meet the needs of your clients — but right now in retail, it’s absolutely crucial. Retail ISV growth depends on more than developing simple tools for merchants to use at the checkout or that allow them to accept payments made on a smartphone. Retailers need software solutions that meet the challenges of a rapidly changing, ultra-competitive industry. They need help in the fight to win customers and keep their loyalty. Retail ISV growth requires a deep understanding of the industry and the ability to develop applications that help retailers execute their business strategies.
What You Need to Know About Retail Before You Develop a Software Application
Before you finalize your MVP or your next release, evaluate how well your solution addresses retail industry pain points and advances retailers toward their business goals. Here are five common retail challenges your software should address:
1. Seasonal help and employee turnover
Retailers are always training new employees. According to the LinkedIn Talent blog, retail has one of the highest employee turnover rates at 13 percent (incidentally, second only to the software sector at 13.2 percent). And retailers often use seasonal or temporary help to manage the busiest times of the year.
In an industry where new employee training is almost routine, it’s important for software to be designed so it’s easy to learn and simple to use. Software that requires an excessive amount of time to learn and that’s hard for new hires to use simply isn’t acceptable for this industry.
2. Omnichannel customers
Virtually all shoppers now use multiple channels. A Big Commerce study found that 96 percent of Americans have made an online purchase at some time in their lives, and 80 percent did so recently. Moreover, if they aren’t purchasing online, they may be browsing online, taking advantage of buy-online-pickup-in-store service, using their smartphones while shopping in-store, checking social media for reviews, clicking retargeting ads — pretty much whatever makes shopping most convenient for them.
Because shoppers engage with brands using multiple touch points, it’s important that all of a retailer’s applications integrate with one another, from point of sale (POS), mobile POS, e-commerce, and loyalty to back-office applications like inventory management and CRM. This will ensure that customers using multiple channels (sometimes for the same purchase) will have consistent experiences regardless of how they engage. It also ensures that the retailer can use data from all channels to personalize promotions and customer service.
3. Thin margins
Retail is extremely competitive, and many businesses, including longstanding retailers, have felt the impact of big box stores and e-commerce retailers offering items at rock-bottom prices.
Retailers are looking for ways to operate efficiently and cost-effectively to help preserve the bottom line. Your solution that reduces the labor burden, minimizes shrinkage, saves energy, or forecasts demand more accurately will capture attention. If you can prove ROI measured in dollars and cents, even better.
4. Loss prevention
Shrinkage is a significant problem for retailers. On average, shrinkage costs a retailer about 2 percent of sales. Shrinkage isn’t just the result of shoplifting, although that’s a major contributor. Retailers also experience loss due to employee theft, vendor fraud, and human error, such as mistakes during a markdown.
Applications that you develop that can help curb this problem, could, literally, pay for themselves.
The pace of change in the retail industry over the past decade has been dizzying. And tech disruption and changing consumer demographics — from baby boomer to millennial to Gen Z — continue to bring new challenges. “Future-proof” is more than a buzzword in this industry. It’s a necessary characteristic of a smart technology investment.
Retailers aren’t interested in an application that does not) have the flexibility to adapt to new processes or integrate with new technologies in the future. Develop solutions that have the ability to add new functionality or to scale as needed.
One More Thing: Always Add Data Analytics
Data collected by almost any application designed for retail will have value for your customer. Retailers of all sizes have discovered the power of data for:
- Personalizing customer experiences
- Improving business performance
- Increasing customer retention
- Maximizing profits
- Managing multiple channels
Include data analytics and user-friendly reporting to give your customers the insights they need to make fact-based decisions for growth in the current competitive climate.
You’ll be positioning your own business for growth as well, by addressing retail challenges or the challenges specific needs of a niche, and helping merchants progress toward their business goals. When you understand this ever-evolving industry, your applications will solve real problems and have real value.