Retail Tech Leaders Address Build vs. Buy Decision Making
When evaluating their tech stacks and how they can be improved upon to better serve the evolving needs of digital-savvy, omnichannel shoppers, retail technology leaders are often confronted with a common dilemma: do they build needed solutions in-house or buy them from third-party providers? Of course there’s no easy answer to this question, and there are many factors that influence the decision made.
To help other retail tech leaders make better build vs. buy decisions, including what factors go into the decision-making process, a panel of experts addressed the topic during a session at Total Retail Tech last month in Nashville. Those panelists included, among others, Rebecca Wooters, chief digital officer, Signet Jewelers, and Dara Meath, divisional chief information officer, digital/e-commerce, Conair.
“The way I look at build vs. buy is very practical,” noted Meath. “What’s the budget? What kind of knowledge do we already have? How is it going to connect in [with existing tech solutions]? What can we do with it? And then how do we keep building against it? We continue to grow our tech talent to grow our tech stack. And if I buy, I only buy for a short period of time, and then I continue to build. I believe in educating in-house to support and grow.”
For Wooters and Signet Jewelers, parent company of retail banners such as Kay Jewelers, Zales, Jared, among others, collaboration between the digital team and the rest of the organization is critical when making decisions related to tech stack investments.
“The reality is collaboration is key, but at the same time it’s one thing to say you’re going to collaborate, it’s another thing to truly understand what needs to be accomplished and then what it’s going to take across the organization to make that happen,” Wooters told the audience. “I feel where build and even buys fail is that more is thought about the ‘what’ as opposed to how it’s going to operate. Things like making sure the data feeds in correctly, the hygiene is there, the infrastructure is there to support it, who is going to maintain it, is it truly what’s best for the customer. Those are the important considerations that before you jump in you really need to lay that out to the degree that you can get the most important pieces operating first.”
The panelists were asked by the session moderator, Laura Wheeler, managing director, Ankura, to offer advice to the audience on what to look for during the RFP process if they’ve made the decision to buy technology. Wooters and Meath each had interesting callouts.
“Make sure that you’re thinking through all the infrastructure and support that needs to happen on your side,” advised Wooters. “When a company says that there’s no integration on your side, you should pause, because there always is something. I’m also a big believer in talking to your peers who are using these products today — and I don’t mean the ones that the vendor told you to talk to. Ask the questions around integration, use, how easy it is.”
Meath noted that you have to be willing to make changes, and therefore doesn’t advise locking your business into a long-term contract even with best-of-class providers.
“You have to do what’s the best for your business,” said Meath. “Not just the best-in-class; it’s the best for your business. When we go in to evaluate, we have a five-three-one rule. We go out and evaluate five vendors, bring them down to three, and then bring it down to one. It’s a huge evaluation process, but the vendor doesn’t know that. It’s my evaluation process internally.”
This article was originally published on Women in Retail Leadership Circle, sister brand of Total Retail.
