Is Retail Like a Formula 1 Race?
Thursday, February 8, 2018

Categories: Thought Leadership

Is Retail like a Formula 1 Race?

To say that retail is a hypercompetitive business, raises no eyebrows. It is.

Retail Like Formula 1 Racing: Back of Car

To say that a consumer’s buying journey must be an easy, pleasant journey with no disconnects when buying across different channels, also – no surprise. It’s what we all know as omni-channel retailing.

To state that retailers need unified systems that make that buying journey seamless for shoppers, is gaining traction. If nothing else it is widely touted by technology vendors.

Therefore, it is clear that retailers need unified retailing systems to deliver a great buying journey. No question, here.

HOWEVER, too many of today’s retailers are falling for the misleading notion that a single vendor unified commerce system is the only option to make this happen successfully. FALSE.

BUT, don’t trust me. Lets look to another truly hypercompetitive business. Formula 1 racing.

Formula 1 and Retail – Seriously?

First of all, the two business are hypercompetitive (literally). Formula 1 is the epitome of racing at the extreme end of high performance cars. Moreover, to win requires a combination of strategy, high performing teams with skills and cohesiveness, and it requires the highest possible performance vehicles.

Isn’t that just like our world of retail?

For retail, the race track is the competition to get shoppers to buy our products. Modern retailing needs a sound strategy that ties online|mobile|voice-commerce with physical stores, outlets, and popup locations. All in all, to win takes high cohesion between a motivated team of store managers, inventory, planners and category management, and a strong service orientation among the in-store sales associates and staff. In addition, you just can’t do it without a solid peak performance retail technology. This piece lets your pit crew fly.

No Weak Links In retail you need a combination of strategy, highly skilled & cohesive teamwork & high performance technology

Remember the old saying that “a chain is only as strong as it’s weakest link?” It is so appropriate in the world of singular vendor unified commerce.

If your strategy doesn’t include giving customers choices, and letting them shop anyway they want – that’s the weak link and you lose. If your crew is not working together as a team, and not helping customers order merchandise online or on a mobile from your website – that’s the weakest link and you lose. If your unified commerce isn’t a high performance system at each sub-system and fails on Black Friday (the final lap) – that’s the weakest link, and you lose.

My point is that retailers need to have their act together at every step of this buying journey. The most damaging area of failure is when a retail system chokes under heavy loads. Black Friday, Cyber Monday, Boxing Day, come to mind? Its at this time that peak order volumes can easily exceed 20-50x your average dailies. Bad time to find out that the singular unified commerce system you purchased chokes at 15x your standard volume! It is like the car breaking down on the final and most crucial lap.


Retail Order Consolidation Brief


Isolated Cases – Right?

Won’t happen to me? I purchased our singular unified commerce system from one of the biggest names in the industry – so I am safe… right? Think again. These disaster do happen, and more often than we would like to admit. A well-publicized ‘choke’ took place with Macy’s in 2017, on Black Friday. A payment system glitch knocked out their capability of processing credit cards and gift cards for the afternoon of the most important shopping day of the year! Here, the payment gateway was the weak link. Not only did this result in lost sales, a direct boost for their competitors, a negative brand reputation impact, and to say the least – a terrible effect on customer satisfaction. Not to pick on Macy’s with so many hard working retailers and associates. But it does go to show that even the largest of established systems need to be scrutinized.

Retail Like Formula 1 Race - Racing CarA year earlier, one of Canada’s largest retailers – which subsequently declared bankruptcy – experienced similar challenges with their order management system. The retailer took the action of replacing the OMS (the weakest link) in their unified commerce solution. This came from one of the retail technology industry’s largest and loudest proponents of their singular vendor unified commerce solution.

If that isn’t convincing enough, look back to well publicized articles about Billabong’s decision to drop their single vendor unified commerce system, due to its lack of performance.

We don’t want to point fingers. It isn’t about one particular unified commerce company doing bad things, or developing shoddy products on purpose. Rather, these examples highlight painful learnings. The lessons: unified commerce system needs to be powerful, support both customers and retailers, must be robust, and be built for performance. Just like a Formula 1.

Don’t Buy the Singular Unified Commerce (SUC) Pitch

There is much noise in the retail technology industry about unified commerce. Vendors making the most noise, tout the absolute need to have deploy a singular unified commerce (SUC) solution. No surprise, they want your business – and they want ALL of it! Not surprising for the large vendors, like the failed cases above; but even the small uninspired unified commerce vendors tout the same message.

In short, they think they are the best at everything, and you need to buy their entire system. Rip out all your old technology. And then put in their entire singular new system. And all of life will be rosy, as you drive to the checkered (winning) flag, with ease. … If only retailing were that easy!

High Performance Systems

So what do you do? What if you don’t buy into the slick sales pitch of the vendors selling SUC systems?

Look again to the Formula 1 analogy. In high performance racing, there was a time when a single vendor would build the entire vehicle. That time has long past. Today’s winning teams build the highest performance cars from the best sub-systems in the world. They bring these together with expertise, connecting each system with confidence.

Winning cars are built by constructors, rather than all parts built by one manufacturer. The crew’s  master engineer unites the best possible systems like a McLaren chassis, Mercedes power unit (engine), Lotus transmission, Brembo braking, and Pirelli tires. If the world’s top performing cars aren’t built by a single manufacturers, how could we expect a top performing retailing system to be any different?

(Reference: Wikipedia 2018)

High Performance Unified Commerce System

As in Formula 1 racing, you cannot expect one retail technology developer to be the best at every part of a unified commerce system. Face it – one vendor cannot possibly create the world’s best POS, WMS, OMS, ERP, payment gateway, RFID system, Analytics, CRM, ECP, PIM, and Clientelling system!

Rather than expecting to win the race with one vendor’s solution, hire on a master engineer. They can bring together the world’s best systems, into one high performance, winning retail machine. Inspiring, but what does this mean? You cannot expect one retail technology developer to be the best at every part of a unified commerce system

To win at retailing, you need a high performance unified commerce system. That means working with a trusted systems integrator (SI) with the experience to unify the various systems like a Salesforce Commerce Cloud ECP with the top performing OrderDynamics OMS, InRiver PIM, Fujitsu POS, and JDA WMS. Unlike a SUC (singular unified commerce) vendor, a competent SI develops the solution best suited to your retailing needs. Better yet, they know how to use your existing technology, rather than taking the costly rip & replace strategy that SUC vendors want.

Retailers Need HPC

Today’s retail is just like Formula 1 racing. The finish line is the customer purchase. The way to win the race is with a great strategy, well trained associates ready to provide great service, and with a high performance unified commerce (HPC) system built on best-of-breed technologies. Furthermore, your HPC needs to be robust, have the performance to handle your busiest days, and which avoid the ‘weak links’ syndrome inherent in a single vendor SUC system.

Build it to win it!



Charles Dimov - Director Marketing OrderDynamicsCharles Dimov is Director of Marketing at OrderDynamics. Charles has 21+ years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics.





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