The Risk of Playing Technology Catch-up

by admin Categories Technology

Tech fear Header

I talk with storeowners every day about their websites, POS systems and their customers and business and over the past few years I’ve noticed an alarming problem that is certainly recognized and overwhelmingly ignored by almost all storeowners. It’s the complete disregard for staying current with technology.

Here’s the problem – it’s too easy to push technology to the bottom of the upgrade pile because technology is expensive. Too expensive, in fact, to care about until its too late. Time is vicious when you ignore it.

Scenario – The storeowner opened its doors years ago and stuck in a ton of money to build the inventory and customer base and hire employees. They even bought a computer system complete with software and printers, and in the beginning, it was amazing and very cool how everything worked so well. Then they built a website and started selling online, and life was good. Yesssss!

Well, now it’s been six or seven years and the store is maturing and getting better and better. The open to buy inventory makes sense and the profits are increasing at the normal retail rate. But, now the owner is looking around and discovers that their website is looking kind of old and out dated compared to the “new guy” down the block. The computer systems are glitchy and cumbersome now and the work to keep these “dinosaurs” going is a big fat headache. The employees are complaining that the computers are slow, they’re locking up and, etc., etc., etc.

The storeowner looks in their accounting program and discovers that he didn’t budget for technology upgrades. That’s no problem, we’ll just get new computers and build a new website. And then it hits him! Ouch! Technology didn’t get cheaper it just got better.  Once he starts looking around at how expensive everything is, the first instinct is to put it off again and “make do” because it’s just too much money. Twenty-five thousand dollars for a shiny new website. Are you kidding me? The cost of upgraded POS systems and new computers pushes the storeowner over the edge of denial and he makes the costly mistake of waiting, again.

Now the problems begin to snowball. Your competitors’ websites are slick and responsive to mobile devices. You see a decline in web sales because you ignored the technology trends that happen very quickly today and the traffic on your website begins to trickle south. No matter how much money you throw at other areas of your business, the sales keep declining. You need help!

Now you can’t afford to upgrade because you decided to put it off until sales increased and the opposite has happened. You can’t catch-up this way and it’s now that you really begin to pay attention. You read about record-breaking growth in Internet sales that everyone else is having except you and now it’s all hands on deck. You’re going to make a big business decision and shift everything to the web. It’s your basic crisis management thinking and it had better work. Your customers are a finicky bunch and will no longer be loyal if you don’t keep up with the times and make them happy. They want to support you, but you have to do your part as well.

Here’s a good rule of thumb to live by in the retail world and it’s a bit of a history lesson, so bear with me. Back in the mid 60’s, Gordon Moore, who is one of the founders of Intel, boldly stated that computing power and technology will double every two years. This statement has been widely regarded as Moore’s Law.  Ha! He was wrong! It doubled about every eighteen months.  It’s 2013 now and computing power and technology is still growing . . .

So having a technology budget that is strictly adhered to is very important for your business success. You save for your retirement why would you ignore technology? Trying to catch up is going to require a rich uncle to become an investor and even so, it will take six months to complete the upgrade. Do you have that much time? Can you afford the price of time?

Websites have a shelf life of about three years before you have to start thinking about doing something different. Computers and software programs have to be maintained and updated all the time because it takes about two seconds to recognize that four years went by, and four years for a computer is like twenty human years.

Please don’t get yourself stuck in this scenario. Pay attention, budget for growth and know that you’re going to have to eventually spend some money to stay current.