Why shouldn’t we just build merchandising solutions ourselves?

Alexandra Cordahi, Business Development Manager, provided insights to answer this retail merchandising question.

5 reasons you’re better off with SaaS providers than home-grown solutions

Retailers are often tempted to take on the challenge of developing retail merchandising solutions in house for entirely understandable reasons. Often, they’re worried that external providers won’t understand the nature of their business well enough, or that an in-house approach will be less expensive than partnering up.

But, internal developments run several risks, especially in the long-term, that retailers should be aware of if they are considering embarking on such an odyssey.

Here are five reasons why you should think twice before taking on these types of internal projects, and why they are better left to external, particularly SaaS, providers. You can also read a more detailed discussion on this topic here.

1. You’ll need to hire entirely new teams of professionals

Frankly, partnering up with an external provider might seem costly at the outset, leading retailers to believe that it could be cheaper to do it on their own.

However, when technology development is not naturally part of your business – likely true in the case of fashion and other collection-based businesses – this usually means having to hire on entire teams of professionals to make it happen.

For example, to develop the type of advanced merchandising technology retailers really need, the type that involves AI and machine learning, they’ll need to bring on teams of software developers, data scientists, and other professionals that do not traditionally make up teams in these industries. And how much are they likely to understand about the nature of your business? Or what would incentivize them to join your company?

Some major global retailers are dedicating an increasingly large part of their budgets to working with advanced technology and data. However, not not all organizations will have the same capacity to make the investments necessary to attract, hire, and maintain these highly in-demand professional profiles whose typical compensation levels are high above the cultural norms of most retail organizations.

Partnering with external SaaS providers like Nextail that are specialized in developing these types of solutions for industry-specific needs means you don’t have to worry about hiring on entirely new teams for this type of project.

You can leave the cost and time invested in developing this technology to the providers and their teams.

2. You don’t have any time to waste

The retail of today is not the same retail it was 5+ years ago, which is not saying a lot considering how much it’s changed within the last one. This means that retailers need to be implementing new technologies and solutions fast.

However, developing and implementing a radically new technology is not a straightforward process. In addition to recruiting and hiring new professionals, development also includes a series of phases that must be carried out prior to, or in conjunction with, final use. These phases tend to include a combination of discovery, research, design, testing, standardization, implementation and operationalization, and review.

What retailers have that kind of time? Especially if they need to see results fast?

By partnering with an external provider that is already offering the technology you need, you can cut down the amount of time between project kick-off and seeing results from years (yes, years) to months or even weeks if we are talking about industry-specific SaaS providers. For example, since Nextail was specifically developed for collection-based retailers, very little fine-tuning of solutions needs to occur, making this whole process even faster.

3. Inertia is stronger enemy than you might think

When you’re investing time, energy, and resources into developing solutions to solve organizational pain points, insider knowledge is key. No one is going to know more about the company culture, ways of working, and team dynamics than those involved.

But sometimes insiders are also so constrained by current conditions that it’s even more difficult to see the bigger picture and think creatively about how to solve these same challenges. Additionally, it can make it difficult to feel confident enough to drop legacy mindsets and tools and adopt radical (or even subtle) change.

Alexandra Cordahi explains how SaaS providers help teams shake off inertia

In the case of Nextail, the team of retail experts not only works with insiders to truly grasp organizational needs and challenges, it also provides guidance throughout the change management process, increasing user confidence in the technology and easing and quickening implementation and adoption.

4. Your needs (and those of the industry) will change over time

Are your retail merchandising challenges the same now as they were 10 years ago? What about last year? If you’ve said “yes”, lucky you! But the fact of the matter is, that’s not the case for most retailers who are finding that their current and future success depends on an ability to be flexible in the face of change. Of course this often depends on how flexible their systems and approaches allow them to be.

But a common limitation of homegrown solutions (as well as heavily customized external solutions like ERPs!) is that they are so custom-fit that they quickly become as oppressive as other traditional legacy systems as soon as the organization or its needs change. And once again, given the amount of time it takes to develop this technology in-house, it’s worth considering their shelf life.

SaaS providers build retail solutions with the larger industry in mind, and constantly updated them to include industry-driven improvements and new functionalities.. They are also continually updated, with some even able to collect and apply data from other retailers for things like forecasting, which in-house solutions are unlikely to be able to do. Nextail solutions in particular, are built specifically for fashion and collection-based industries so they aren’t one-size-fits-all retail solutions, but they can be slightly adjusted to the needs of each business.

5. You have other things to think about – like your customers

You aren’t a tech company, you’re a fashion or other collection-based retailer and your customers are your biggest asset. Customer-centricity has become arguably more important than ever, and likely many of the operational challenges you’re looking to solve are all in the name of providing them a better experience in one form or another. But if you are constantly looking inward or are so focused on carrying out complex merchandising developments, you have less time to invest in focusing on your specialty: offering products you know well to people you need to keep knowing well.

By choosing external developments over homegrown projects you save your business time, internal resources, and CAPEX. You can also rest assured knowing that external SaaS providers of merchandising technology like Nextail will take the time to get to know you and guide you through implementation and change management.

All of which means you can focus on more commercial activity and maintain your relationship with customers to provide them with the best possible products and experience.

In the “Ask Nextail” blog series, we’ve compiled the most frequently asked questions we receive. Team members from various teams across Nextail help to answer these questions, bringing expertise from their work helping retailers understand, implement, and be successful managing the radical change that comes with digital transformation in retail.

If you’d like to know more about how fast you can’t see the impact of Nextail solutions on your retail business, contact us!

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