Post-Optimized Retailing

In strategy meetings held at any number of retail chains around the country you might hear an executive say, “Our stores need help. Let’s invest in optimizing our stores.” Or you might hear someone else say, “The Internet is booming. Let’s invest in optimizing online sales.” Other calls for optimization come to mind and are likely heard with frequency, but there is something wrong with all of them.

It is not that they don’t have merit, because they do. The problem is they don’t reach high enough. Optimization is table stakes today. What is needed is synchronization — across channels, technologies, applications, databases and even across corporate structures.

Why? Because that’s where the money is. In the recent 7th Annual RIS/EKN Cross-Channel Tech Trends Study we found that multi-channel consumers are 21% more profitable to retailers than those who shop in a single channel. This is one of the major findings in the study that is full of them. You can download a copy of the study with full charts and in-depth analysis by going to the RIS website ( and clicking on the Research tab.

The study also found that retailers who lack cross-channel IT integration are losing millions of dollars in revenue to their competitors at a rate of $45 million per year, which is another of the study’s major findings.

To plug the hole retailers have adopted a robust cross-channel investment strategy, which RIS/EKN estimates will rise to 30% of IT budgets by 2016.
But when investing in cross-channel IT initiatives it will be a mistake if retailers focus their efforts on such piecemeal projects as optimizing stores, channels, processes or anything that reinforces the traditional siloed approach.

In fact, realistically, optimization should be an expectation as opposed to a goal. Ask yourself this question: Which part of your enterprise do you want to operate in a non-optimized way?

Optimization is merely improvement. It has merit but it doesn’t reach high enough, especially in an era of paradigm shifts and tipping points.

A better approach is to focus on synchronization – the interoperable merging of infrastructure, channels, technologies, databases, functions, services, processes and even departmental structures. Creating a unified customer engagement platform is a tall order for any retailer, which makes it a strategy worthy of the name and one worth pursuing.
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