
By Grant Wright
Global Vice President
Consulting Services
For years or, in some cases, decades, retailers have relied on on-prem merchandising systems as the core for their operations.
However, in today’s fast-moving retail world, these legacy systems place businesses at a sharp disadvantage due to outdated functionality (e.g., overnight batch, legacy reporting, and reliance on human intermediation); increased maintenance costs dedicated to just “keeping the lights on”; and, perhaps most importantly, the barriers to innovation they place throughout the tech stack due to the challenges of integrating with newer systems.
With a cloud-first merchandising architecture retailers are far better situated to deftly navigate emerging industry trends. In this blog, I’ll explore the inherent challenges of maintaining an aging merchandising system, why the winners of tomorrow are the ones embracing SaaS, and the steps you can take to get on the right track.
The hidden (and not-so-hidden) costs of legacy systems
Maintaining a legacy, tech debt-laden merchandising system is more than just a headache for IT teams (though they are that); they’re a strategic liability that undermines agility, customer service, and financial health via:
- Escalating maintenance costs: Legacy systems require constant upkeep and upgrades, often with dwindling vendor support. What’s more complicated? These older systems may have been implemented by colleagues who have long since departed the organization, so when an upgrade is required, modern IT teams must invest time into understanding the unique constraints of legacy systems before they can even begin to fix any issues or make changes.
- Security vulnerabilities: Unsupported legacy systems are susceptible to breaches, threatening sensitive customer and company data, leaving organizations vulnerable to operational disruptions, regulatory fines (and possible additional civil legal consequences), and reputational damage. With a SaaS-based model, on the other hand, you have a knowledgeable partner (in the form of your platform vendor) who is similarly incentivized to keep the platform secure and resilient.
- Baked-in obsolescence: Most older platforms are snapshots of yesterday’s technical retail paradigms. They lack the real-time capabilities required for efficient inventory tracking, demand forecasting, and seamless cross-channel shopping experiences, leading to frequent stockouts, overstocks, and dissatisfied customers.
However, these systems’ most important long-term challenge is the friction points they place on the digital innovation journey. It’s inherently difficult to integrate new technologies (e.g., AI-driven analytics) into older rigid systems, leaving retailers ill-equipped for today’s marketplace. In sharp contrast, a cloud-based merchandising platform, like Oracle Retail Merchandise Foundation Cloud Service (MFCS), eliminates the cost of maintaining yesterday’s tech and accelerates the journey to building tomorrow’s.
A platform for continuous innovation
Transitioning to a modern cloud merchandising system empowers retailers to continuously–and comparatively easily–expand, iterate, and evolve their tech stack. It can be the flexible backbone that allows your business to navigate the evolving contours of the marketplace.
Whereas legacy solutions require a significant resource investment to build custom integrations into newer systems, SaaS merchandising platforms inherently “play nice” with other technologies, lowering the risk of iteration and experimentation. This allows retailers to:
- Take a “best of breed” approach: By lowering the bar for tech integration, businesses are given greater freedom to choose solutions that address their unique needs. Should a superior option emerge, they can likewise make a switch with relative ease.
- Easily implement new technologies: In today’s accelerating world, a groundbreaking new technology is always just around the corner. In 2021, for example, few retailers were thinking much about LLMs; but by 2023, that was all that anyone was talking about. Systems like MFCS allow you to quickly and seamlessly push and pull data from emerging tools and platforms to ensure you always have your competitive edge in place.
- Realize wins throughout the journey: Digital transformation is a journey, not a destination. With a flexible backbone, you can prioritize which parts of your ecosystem require upgrades based on your business’s current needs and goals. A fashion retailer, for example, may prioritize advanced inventory optimization, while a grocery retailer might focus on real-time replenishment capabilities. This approach can help you achieve early “wins” along your transformation journey.
In an increasingly competitive marketplace with skyrocketing customer expectations, keeping course with a legacy merchandising system is like trying to reach the moon with a horse and buggy. A cloud-based system, as a point of contrast, can be your rocket ship.
Find the right partner
At Logic, part of Accenture, we understand the complexities of modernizing retail merchandising systems. Not only can we help you seamlessly implement it into your system, but we can also guide you in unlocking every opportunity this new architecture opens.
Our expertise in SaaS transitions helps retailers overcome technical debt and unlock the full potential of truly important capabilities like right-pricing, forecasting, replenishment, and allocations.
We understand that there is no one-size-fits-all solution. We can help you identify the best technologies for your business and seamlessly integrate them into your tech stack.