{"id":9525,"date":"2021-05-25T07:17:34","date_gmt":"2021-05-25T12:17:34","guid":{"rendered":"https:\/\/reformingretail.com\/?p=9525"},"modified":"2021-05-29T13:53:43","modified_gmt":"2021-05-29T18:53:43","slug":"the-retail-tech-stack-is-becoming-wholly-untenable-when-does-it-collapse","status":"publish","type":"post","link":"https:\/\/reformingretail.com\/index.php\/2021\/05\/25\/the-retail-tech-stack-is-becoming-wholly-untenable-when-does-it-collapse\/","title":{"rendered":"The Retail Tech Stack Is Becoming Wholly Untenable. When Does It Collapse?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">The silver lining of COVID, at least for vendors to the retail ecosystem, was that a little spike of protein made it obvious just how far behind offline retailers\/restaurants were from their ecommerce brethren. Seemingly overnight everybody and their brother (and their brother&#8217;s dog&#8217;s cousin&#8217;s hamster) became some version of a QR code payment tool, or remote ordering tool, or ecommerce click-n-collect platform.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And before you knew it there was a burgeoning ecosystem of niche tools that merchants felt like they <strong>had<\/strong> to use to survive.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some of those consumer behavior changes will be permanent without a doubt, but the <em>magnitude<\/em> of that change is certainly up for debate. Perhaps more worthwhile is questioning the need to have all these disparate solutions. For example, maybe paying $100\/mo for a QR ordering tool was great when that was the <em>only<\/em> type of payment acceptable during peak COVID. But now that people are resuming their pre-pandemic behaviors, can merchants really afford $100\/mo for a solution that represents a much smaller customer use case?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Needless to say that the retailer tech ecosystem is more complicated &#8211; and costly &#8211; than it&#8217;s probably ever been, and there&#8217;s been an undercurrent of fear catalyzing spend on items that we&#8217;d argue become much less worthwhile as 2021 marches forward.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The following graphic is our best effort to summarize the tech stack as we see things today. We&#8217;re clearly going to miss a few pieces, so for that we apologize upfront. For simplicity we&#8217;ve divided the tech stacks into two categories: operations, and marketing. We tried to group solutions by related categories as well. It should surprise none of our more ardent readers that we&#8217;ve put POS at the center of both ecosystems as it truly remains the most important technology decision an operator can make.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"770\" height=\"356\" src=\"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2021\/04\/Screen-Shot-2021-04-10-at-1.50.03-PM.png?resize=770%2C356&#038;ssl=1\" alt=\"\" class=\"wp-image-9932\" srcset=\"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2021\/04\/Screen-Shot-2021-04-10-at-1.50.03-PM.png?resize=1024%2C474&amp;ssl=1 1024w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2021\/04\/Screen-Shot-2021-04-10-at-1.50.03-PM.png?resize=300%2C139&amp;ssl=1 300w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2021\/04\/Screen-Shot-2021-04-10-at-1.50.03-PM.png?resize=768%2C356&amp;ssl=1 768w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2021\/04\/Screen-Shot-2021-04-10-at-1.50.03-PM.png?resize=370%2C171&amp;ssl=1 370w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2021\/04\/Screen-Shot-2021-04-10-at-1.50.03-PM.png?resize=270%2C125&amp;ssl=1 270w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2021\/04\/Screen-Shot-2021-04-10-at-1.50.03-PM.png?resize=570%2C264&amp;ssl=1 570w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2021\/04\/Screen-Shot-2021-04-10-at-1.50.03-PM.png?resize=740%2C343&amp;ssl=1 740w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2021\/04\/Screen-Shot-2021-04-10-at-1.50.03-PM.png?w=1352&amp;ssl=1 1352w\" sizes=\"auto, (max-width: 770px) 100vw, 770px\" \/><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Let&#8217;s assume each one of these solutions asks for $100\/mo. Being careful not to double count the POS, that&#8217;s 28 solutions, or $2,800 per month. We&#8217;d probably want to add another 14 solutions (half of the 28 solutions we thought of) just to cover for things we&#8217;ve undoubtedly missed. That&#8217;s $4,200 per month per store.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That ain&#8217;t cheap.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Clearly this is wholly unsustainable. There&#8217;s probably no bigger advocate for best of breed than those of us at ReformingRetail, but merchants are being nickel and dimed to death, and the sprawling universe of products is unsustainable. The pendulum has swung too far in one direction as far as we&#8217;re concerned, and we didn&#8217;t even list payments processing which gapes merchants for zero value in return.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The stack will have to collapse. Operationally:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Kiosks will need to swallow voice and facial ordering<\/li><li>Reservations, waitlists, and events management should consolidate <\/li><li>Labor solutions need to mature and include more than basic scheduling and compliance, adding things like payroll and data science for recruiting and gamification<\/li><li>The inventory stack should fold into itself as well, taking invoicing, accounting, and incorporating new interfaces to make it better<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">There&#8217;s a giant mess going on with third party ordering and delivery, no doubt catalyzed by the disaster that is legacy POS integration. Like why the hell in 2021 are online orders still spitting tickets to kitchen printers instead of routing natively into the POS? Why is there an alphabet soup of middleware to handle POS integrations? <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>For fuck&#8217;s sake POS companies, learn how to build an API.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Then there&#8217;s the marketing debacle. As far as we&#8217;re concerned loyalty, CDP, marketing activation, and measurement will need to <a href=\"https:\/\/joinaben.com\/\">become one solution<\/a>. Our bet has always been that in order to make marketing statistically accurate (i.e. when do you need to run marketing, for what stores\/markets, how much do you spend, whom do you target, and did it actually work?) you need a massive amount of data, which we&#8217;ve gathered over the past decade. And we didn&#8217;t even screw a single merchant on payments processing to get there. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Amazing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Collapsing these solutions is not easy but the math shows why it will need to happen: merchants simply cannot afford all the tools necessary to be competitive in today&#8217;s market (and you can ignore Toast purporting to have a path to earning $70,000 per rooftop). We expect the market to consolidate, much as you&#8217;ve seen with the acquisitions in the back office and POS spaces over the past few years, only to reemerge in a few years with a proliferation of new point solutions as the markets change, which they always do.<\/p>\n\n\n\n<p>This is the nature of technology: a leap forward in innovation is a differentiator until it becomes table stakes. Be thankful for the entrepreneurs that assume these risks to make our lives better. <\/p>\n<script async=\"\" src=\"https:\/\/widget.websitevoice.com\/UMwLESBjj1uq-UOHwOeBBw\"><\/script>\n<script>\n  window.wvData=window.wvData||{};function wvtag(a,b){wvData[a]=b;}\n  wvtag('id', 'UMwLESBjj1uq-UOHwOeBBw');\n  wvtag('widget-style', {\n    backgroundColor: '#F5953E',\n    contrast: 'wv-contrast-dark'\n  });\n<\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The silver lining of COVID, at least for vendors to the retail ecosystem, was that a little spike of protein made it obvious just how far behind offline retailers\/restaurants were from their ecommerce brethren. Seemingly overnight everybody and their brother (and their brother&#8217;s dog&#8217;s cousin&#8217;s hamster) became some version of a QR code payment tool, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":9932,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"image","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[5,4,3],"tags":[],"class_list":["post-9525","post","type-post","status-publish","format-image","has-post-thumbnail","hentry","category-solutions","category-merchants","category-pos","post_format-post-format-image"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p81nA2-2tD","jetpack_featured_media_url":"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2021\/04\/Screen-Shot-2021-04-10-at-1.50.03-PM.png?fit=1352%2C626&ssl=1","_links":{"self":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/9525","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/comments?post=9525"}],"version-history":[{"count":8,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/9525\/revisions"}],"predecessor-version":[{"id":10401,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/9525\/revisions\/10401"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media\/9932"}],"wp:attachment":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media?parent=9525"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/categories?post=9525"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/tags?post=9525"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}