Todays IT exec is quietly learning a different lesson: Efficiency is pleasant enough, but its almost as weak a business value-add as low price. Being the low-price leader is a good way to get near the top, but it is so easy and inevitable that someone else will beat your price and youre toast.
Besides, being the low-price leader is ultimately unsustainable because, if it works, the company will grow and develop overhead, which will pave the way for some smaller company to come in and knock that low-price crown off your head like a 9-year-olds hat in a snowstorm.
People often point to Wal-Mart as an example of how low price can indeed support the leader. But they forget that Wal-Mart didnt start life with a low-price differentiator. It started as a retailer willing to go into small communities that no other chain wanted.
Since then, its pushed the envelope on technology deployment so that it can remain cutting edge. Its not low-priced because just because it chooses to. Its low-priced because it can bring in goods cheaply and push them through its supply chain in lightspeed.
Outsourcing customer support and tech support is very efficient. But customers hate it, and thats a bad indicator. A recent consumer survey reported that customer service is a critical concern and it is costing some e-commerce players business.
The smartest retail IT execs are using technology to work with people and to not replace them. Consider Best Buy. Like every other e-commerce vendor on the planet, Best Buy has been offering shop-online-pick-up-in-the-store programs for its site. The difference? When a pickup request is placed, the customer is told electronically to not pick it up until the store confirms that its actually available.
In the middle of this very high-tech process, an employee is dispatched to run to the aisle, find the product and bring it up to the counter. Like everybody elses, Best Buys system can certainly access inventory and look up whats available. But Best Buys IT execs knew that such a system was fallible, such as if another customer picked up the item—but had yet to purchase it—after the availability had been confirmed.
Best Buy uses technology brilliantly because it is willing to insert some human intervention.
Self-checkout systems are another classic example. If they were being used to solely replace cashiers, it wouldnt be much of a long-term strategy. But many grocery chains argue that they want to use it to redeploy those people to bakery units, to help customers with their bags and to doing deliveries. In other words, they are using technology to do what it does best, leaving humans to add value.
Another holiday example comes to us from home entertainment chain Tweeter, which wants to push itself in areas where more technologically oriented chains cannot: in-home customer installations and consulting. But Tweeter is pushing CRM limits to understand those customers networks in a way that goes beyond what those customers themselves have.