A timeless tension has existed in retail between marketing and operations. Those who grow the business (marketers) want to move fast and try new things. Those who make it happen (operators) can't keep up. Over the last decade or so, the gap has widened as digital capabilities have empowered marketers to move at meme-level speed, while operators are stuck within the reality of atoms.
Since the 1990s, it is unfortunate that operations has been viewed as the team of "No" — “no you can't use that new fabric,” “no you can't do that faster,” “no that is too expensive.”
How technology is "absorbed" explains the story. New technology is only as good as the rate at which its audience can absorb it into their daily lives. For operators managing the physical reality of retail, technological innovation is the ball attached to its rusty old chain, versus a tool that affords fast business changes. The result is slow-moving processes which limit the people themselves from being helpful business partners.
Things are changing, though. Modern technology is liberating process, turning the culture of operations into a team of "Yes" for progressive companies.
2010 FINALLY COMES TO RETAIL
Of all the compelling tech to invade the digital side of retail, the two most transformative were founded in the late 2000s.
It's well documented the iPhone's impact since its 2007 launch. Mobile changed most facets of society. A more important advent was AWS and the cloud in 2006. Combined, they would dramatically change any industry that could absorb this new epoch. In retail, marketing was the first to reimagine itself. Most brands we know and love today, like a Warby Parker, were founded after 2010 and rode the wave of mobile and cloud innovations in growth acquisition and customer experience.
Marketing has been the forefront of innovation for over a decade as a result. Everything is possible.
The physical world of commerce, from manufacturing to logistics, however, is still stuck in the eras of 1990s software. Software is still clunky deployments in a warehouse closet. Interoperability between systems, vendors, and countries is still protocols from the 80s, or — worse — email. Ask a grizzled tech veteran about EDI, and you'll get the look of depression.
But there’s hope. The paradigms of the 2010s are finally hitting the physical world of commerce.
First, cloud tech is replacing on-premises tech where it makes sense. Implementations are fast, and maintenance burdens are gone. Tech change can move at the speed of business change.
A good example is shipping technology like Shippo or Shipium, where I help lead the business team. With carrier management in the cloud, customers can turn on a new carrier as an afternoon activity, whereas 1990s era tech requires multi-month customizations of each implementation of an ERP instance or Warehouse Management System.
Financing is also changing from outdated license models amortized as Capex to predictable SaaS subscriptions scheduled as Opex. As balance sheets have changed, relieving the requirement for a million dollar up front capital investment for a modern SaaS subscription has allowed for faster and easier acquisition of new technology.
User experiences are improving due to better design and mobile inclusion. To the marketers reading, you should know that most "Ops Tech" is still built on Windows 95 UIs, and not the Dribbble aesthetic you believe is the norm. It sounds crazy, but a better experience is helping unlock better productivity and more flexibility.
Interoperability continues to evolve to modern standards, making it easier to have vendors and system talk to each other. The result is much faster time-to-value. Now, when a business buys a new piece of technology, it's faster to integrate it into existing systems compared to waiting months or even years for implementation.
Lastly, data science is shifting the day-to-day tasks of operators away from lower-value jobs suited for a computer, and towards higher-value jobs that better impact business outcomes. Back in my realm of shipment management at Shipium, in an older situation, an operator would have to create hundreds of business rules and set them up in legacy technology to inform the way in which a carrier is picked for a shipment. For example, stating that a battery can't be shipped via air methods or that the USPS must be used for P.O. Boxes. The operator, usually an analyst, would then review the performance of those rules on a monthly basis and tweak the rules as necessary. In a modern situation, those rules are all configured and managed by technology, freeing up dozens of hours per month for the analyst. It reduces human error, and automatically updates when changes are applied. For example, let's say marketing wants to offer 2-day shipping in Southern California and wants to leverage a new carrier like Veho who will consistently do 2-day shipping at a cheaper price. Do you want to update all that business logic to accommodate the inclusion of a new carrier? Computers do a better job.
TECHNOLOGY UNLOCKS MODERN CULTURE
Business is often stated as a combination of people, process, and technology.
In retail, operations as a blocker was never really a people problem, despite the perception. And while they are stewards of process, it was never really a process problem, either.
Technology is the constraint. Expensive, clunky, constraining, poorly designed, slow, unintelligent technology that everyone thought was gone in 2023 has been the problem. The tools available forced a rigid process that made the people themselves feel like a team of "No."
Over the last several years, the physical world of operations if finally able to absorb many of the fast-paced innovations marketing has come to expect. The result is an exciting decade ahead as the team of "No" shifts its culture to being a team of "Yes".
Want to hear more about how the “Team of NO!” is becoming the “Team of YES!”? Listen to our recent Future Commerce podcast with Kris Gösser.