Many IT pros can say they worked a retail job or two on their way to their current career. Indeed, the U.S. National Retail Federation crows that “More people, by far, have gotten their first job in retail than any other industry” and that’s probably equally true in developed countries around the world.
While the National Retail Federation (NRF) boasts about these jobs, few of those workers would; most scramble to find a career elsewhere posthaste. That’s because such jobs pay notoriously poorly. While retail IT jobs earned higher pay, the turnover there tended to be just as high, as frustrations over antiquated hardware and processes and clunky legacy software took its toll.
How clunky? Forget business intelligence and other modern technologies. Retail could barely bring itself to update the basics such as accounting. As recently as 2007, Retail Systems Research (RSR) was urging retailers to switch from the retail method of accounting to cost method accounting.
Why was this seemingly inconsequential change necessary? “The answer is, because the retail method of accounting came into existence because of a lack of technology, and is obsolete because of the presence of technology,” Paula Rosenblum, managing partner of RSR said in a September 2007 blog post. “In the age of Sarbanes-Oxley, this analyst is amazed that this method of accounting is still considered [Generally Accepted Accounting Principles] ‘GAAP.’”
The retail industry handled IT overall so poorly that it was widely viewed as a graveyard of sorts for IT careers. But that began to change, in recent years, as online sales grew to impressive numbers and offshore outsourcing and markets became ever more lucrative to retailers. These opportunities could not be mined without significant changes in how retail IT was done. So, gritting its teeth against the pain and expense, the retail industry brought in the forklifts and prepared to court new IT talent.
The courtship proved difficult. The image of worn cash registers, old ledgers, and legacy systems befitting a drunken old codger gnawed at the dreams of the courted. But with future profits dancing in their heads, retailers were determined to convince IT talent that they had reformed their ways. And indeed they have.
“For example, companies like Target get it; they seem to always have open positions for solid retail/IT savvy candidates in business intelligence,” says Professor Michael Goul, chair of the Information Systems Department at the W. P. Carey School of Business at Arizona State University. “And their open positions tend to cover the gamut of the business processes.”
New and Improved
As a result, IT professionals, the more savvy ones at least, are taking another look at retail opportunities. And there are more retail IT opportunities to look at than ever before.
"Business intelligence has put 'smart' into retail business processes, ranging from fraud detection, collections, merchandising, and supply network management to shopping experience design,” says Professor Goul. “Analyzing traffic patterns, merchandise placement strategy, labor productivity management, and self-services are all examples where decision making needs to be informed by hard evidence.”
IT, in other words, is now central to everything retail does.
“Buyers need fast information to decide which orders need to be speeded up and which need to be canceled,” explains Goul. “Allocators need to know where merchandise needs to be and how quickly it can get there. Planners need to know how to leverage knowledge gained from last season's lost sales to prepare next season's strategy.”
Although new job opportunities are springing up across the board in retail IT, there is also a “hot list” of skills retailers most want to hire.
“Of increasing importance is a new IT solution category called 'campaign management' or 'marketing relationship management.' Both make extensive use of business intelligence,” says Goul. “These growth areas will serve to accelerate the hiring of IT professionals in retail. For IT, the growth opportunity is for A players who both 'get the retail business' and know how to service the 'business intelligence needs of the enterprise.'”
Change is in the Economic Wind
But make no mistake, the retail industry is no keener than any other industry on making investments in these troubled times. Most of the investment is forced by competitive pressures and some of the job opportunities are not new as much as they are realigned.
Best Buy, for example, has announced plans to hire over 200 new IT professionals to join the company's growing in-house IT team based out of its Minneapolis, MN headquarters. But a deeper examination of the giant retailer’s scope of employment trends finds it closing its UK operations putting some 1,100 jobs at risk.
Best Buy Europe, a joint venture between Best Buy and Carphone Warehouse, aimed at opening 200 stores across Europe but after only 18 months the task proved too arduous against recession headwinds. However, Best Buy is buying Carphone Warehouse out of the Best Buy Mobile Chain while starting a new venture with the same partner called Global Connect. Further, Best Buy recently bought mindShift, a cloud service provider for small and medium businesses.
Strategic shifts such as these illustrate just how aggressive retail has become and how the industry has moved to become significant technology players. While these shifts show a marked trend towards convergence, much as we saw with the telephone, television, and Internet providers in the past, they also mean there is a very bright future ahead for IT professionals.
“The next generation of IT placements in retail will be for those armed with business vertical knowledge and experience, an experimental attitude when it comes to collecting evidence that can improve business processes and support decision making – and they have to know and understand the technical foundations for how raw data gets translated into actionable insights,” says Goul. “What we are seeing is an acceleration in retail company needs and hiring for these A players."