The rate of change has never been greater — or faster — for the footwear industry, with new challenges popping up every day in nearly all corners of the business, from navigating cash crunches and supply chain issues to understanding the latest technological advances. In a new series, FN will ask experts, all solutions-based providers, to take on some of the most timely topics.
The footwear business is widely considered to be slower than other industries to embrace new technology, but the current retail conditions have accelerated the need for quicker, smarter digital solutions. That is particularly critical for brands that may be using legacy technology systems that aren’t designed to handle the new environment.
Matt Rhodus, director and industry principal for strategic initiatives at Oracle NetSuite, spoke to FN about why companies must move to a more digitally-advanced infrastructure now — and how best to do it.
FN: Many footwear firm with dated technology are feeling the strain of those systems. What is a simple way they can introduce more efficiency into their operating systems?
Matt Rhodus: First, find the holes and manually plug them. The point of technology is to not have to do things manually. But right now you might not have the time to do an exhaustive evaluation of what isn’t working in your ecosystem. In a lot of ways, you probably already know what those issues are. Manually plugging holes is not necessarily efficient from a systemic perspective, but it is in the sense that you can probably get a manual practice up and running in a matter of days. Then you can begin the process of determining how you’re going to automate and improve that as the weeks go on.
FN: Minimizing cash burn is a common priority right now. If a company is able to establish a manual solution and achieve stability, would you still recommend they then adopt cloud technology?
MR: This is an investment in business that every company will make at some point. I don’t know of any CEO that wouldn’t want to emerge from this period of change better than they were when they went into it. The question really becomes, “What do you want to be when you merge into the new normal?” In many cases, the only way to get there is through systemic change like this. Cash flow is key and we would never want to put a business at complete risk. But the value of doing this is very easy to justify at a time like this because you will absolutely emerge from this period of change more efficient and more stable. There are very short-term tactical things that could be done at a lower cost. However, that isn’t really going to get you all the way through this uncertain time; you’re certainly not going to merge into the new normal for the better.
FN: Are there any advantages for implementing a new digital infrastructure right now?
MR: For some people, it makes absolute sense that this is the time that you would make those investments because you have the additional labor force available that you can keep focused on the implementation project. There is labor liberation: if a company had retail stores then those individuals are no longer physically going into work every day. The day to day is not as hectic, so the risk of implementing a project goes significantly down during a period like this.
FN: The variety of technology providers in the marketplace can be overwhelming. When evaluating providers, what are some key considerations?
MR: Part of that evaluation is being able to provide the agility that’s needed for the next challenge that will come along. It will be very difficult to predict exactly how consumer behavior is going to be permanently changed as a result of the fact that we’ve all been sheltered up for months, so you need to be on a very agile platform. Also, if you’re going to do this change, you’re not going to want to turn around and have to redo it later. Whether you’re pre-revenue or hundreds of millions of dollars or more a year in annual revenue, you need software that can adapt, flex and have an offering that’s suited to you.
FN: Once a company has its cloud solution in place, where should they first focus its capabilities for maximum impact?
MR: It’s glaring us all right in the face: B2C. Wholesale and the traditional form of retail are not happening right now. Brands whose predominant revenue comes from wholesale channels must now inform their audience that they need to come directly to them to get the product. So first, leverage direct customer engagement to educate your consumer. Second, prepare for that incoming traffic to your site. Take a look at some of that great technology that’s available that can get you up and on a stable B2C e-commerce platform quickly. And third: act like a B2C company from the back end in order to be able to meet that expectation. The beautiful thing right now is consumers are more understanding than they ever have been, so there’s almost no better time to make this transition.