As COVID-19 restrictions continue to ease and more than half of Americans are now fully vaccinated, customers are steadily returning to in-store shopping as their confidence and comfort level with the physical shopping experience increases. Let’s face it, the convenience of walking into the store, quickly selecting the item, instantly purchasing it and heading home is still a very popular value proposition for consumers.
With this newfound confidence returning to physical store sales, it’s essential that the customer experience is second to none. However, if the retailer is experiencing unplanned IT system downtime, not only is the sale in jeopardy but the shopper may never come back again due to simple frustration.
IT glitches are more common throughout the retail industry than we think.
For example, in a recent study we commissioned through Censuswide to poll 100 U.S. IT and store operations managers in the convenience store vertical, 98% of respondents have dealt with store system failure.
This demonstrates just how prevalent this issue is across all retail verticals with a physical footprint. Legacy technology is all too often to blame. The complex store IT infrastructure, common in many retail operations, makes implementation, delivery and management of software difficult on multiple types of devices. This has resulted in a major operational challenge for many retailers, often leading to software malfunction.
While those minutes, hours or days of IT downtime feel like the worst part, the ramifications extend far beyond those moments, as downtime of a store’s IT environment can lead to lost customers and revenue.
As foot traffic increases across the entire retail environment, let’s look at what the true cost of IT downtime could mean for retailers, and key strategies they can consider to future-proof their IT ecosystem as consumers return to the store.
The True Cost of IT Downtime
With new customer buying habits, rising labor costs and social distancing measures required in-store, retailers know they can ill afford downtime. In order to gauge the effect on the retailer’s bottom line, Censuswide asked c-store retailers the amount of lost revenue they can attribute to store system failures (POS, store controller, payment controller, fuel controller and self-checkout). Respondents answered that on average they lose up to $855 per hour when just one of these systems goes down in a single store. In terms of time taken to return one of these store systems to service, the average time was just over five hours, further highlighting that failure can mean money down the drain if they are unable to quickly remediate the issue.
What’s more, with a minimum of two to three checkout lanes per store and many respondents saying at least one part of their technology stack operates as a single point of failure, the impact of even one component going down is a loss of selling capacity. In this scenario, when one device fails, retailers must repair or replace the device as soon as possible to avoid long lines and abandoned baskets.
Beyond the time and cost involved in rebooting store IT touch points, coping with business disruptions and lost revenue, the ultimate consequence of IT downtime is the task of replacing store systems. As these IT replacements get underway, retailers often send a store technician to the physical store to oversee the IT replacement issue, adding yet another expense to the retailer’s bottom line.
In today’s environment where health and safety are still top priorities, being able to remotely identify and remediate IT issues early on is key. Sending technicians out is not the answer for health, safety and cost reasons, and is typically slower than remote or automated recovery.
Solving for Downtime
Retailers understand that IT investment can help resolve these issues. Most of a retailer’s technology is device-based, meaning there’s a software application and operating system (OS) installed on every individual terminal or touch point throughout the store. Any time an update is needed or a new store system is added, new software is either installed or updated within the application or OS on each device. This is expensive and unsuitable for today’s disruptive environment, where speed to market is critical and travel is restricted.
Transitioning to a software-defined edge strategy by virtualizing or containerizing retail store systems reduces the cost associated with managing and maintaining them and gives retailers much greater control and resilience, increasing uptime. Retailers must find a way to evolve their cost structure and minimize touch point failure through technology in order to make the customer experience and store operations more seamless.
Creating IT Resiliency for Today’s Retail Reality
Unplanned IT downtime not only creates friction for a retailer’s operations, it can also negatively affect the overall customer experience. The last thing a consumer wants is to venture out to the physical store, often for the first time in months, only to be met with long checkout lines or the inability to check out at all.
As consumers return to the store, retailers require continuous innovation and IT resiliency to evolve with consumer demands and deliver on the promise of convenience and safety within the physical store. Edge virtualization technology gives them the tools to meet this challenge with automation high on the agenda. By virtualizing their existing applications in the store, managed through the cloud, retailers will reduce downtime, save costs and gain the agility to make future changes rapidly.
Nick East is Co-founder and CEO of Zynstra, an NCR Company, the award-winning leader in purpose-built retail edge software. His in-depth work with major retailers gives him a deep insight into the challenges retailers face and how new, innovative in-store technology can transform customer experiences and cost efficiency. His forte is to focus on retailer business issues, particularly in the prevailing challenging omnichannel environment, and to explain how new advances in technology can offer new and exciting ways to address them. Prior to Zynstra, East was GM for the OSS Division at Amdocs, leading a global team of 500 people and driving the strategy for the company.