Retailers have been at the forefront of technological innovation during the last decade, and while this past year has put a brake on many business activities, we’ve seen the rising need for retail businesses to accelerate their digital transformation in order to respond effectively to customers’ demands.
Digital transformation is a long-term process where one initiative builds a change that leads to another until it influences the rest of the organization, including culture, management, and workflows.
Leading retailers are now acknowledging that digital transformation initiatives alone can help them accelerate processes, capture valuable customer data, transform it into meaningful insights, and use these to gain a competitive edge across the entire organization.
In its essence, digital transformation in retail is about centralizing customer data, adopting new digital tools, and sometimes building brand-new processes to understand what customers want as well as delivering it to them as quickly as possible.
There are so many other benefits to digitization such as having deeper insights on supply chains, blurring the in-store and online experiences, increase in personalization, process acceleration, and, of course, increase in savings of both monetary and human resources.
Digital Transformation in retail is a whole other story
Digital transformation in retail is perhaps one of the most challenging projects a retailer can undertake. The industry is characterized by low margins, high purchase frequency, old legacy technology or integrations, and a complex data infrastructure, which makes any CIO think twice before even talking to any technology vendor.
The vast majority of retailers already have a digital transformation plan in place, and while very few of them have the resources to lead and support a project of this magnitude in-house, the truth is that the rest still fail to apply the best practices that will lead to success. In fact, according to McKinsey, 70% of digital transformations projects fail to achieve their stated outcomes, while only 16% of organizations reported their transformation successfully improved performance and equipped them for the longer term.
The reality is that transformation quickly becomes too overwhelming for Retailers whose core business isn’t tech development or IT, with tech teams realizing the complexity of collecting data across multiple touchpoints, leaving them with the near impossibility of cleansing data to achieve one single source. That’s before reaching the goal to make it accessible to multidisciplinary teams.
On top of that, we’ve seen many digital transformation initiatives put on the back burner, the primary cause being an insufficiently clear business case, which lets other initiatives jump the queue. As a result, bottlenecks are formed while plans and teams fall behind. A slow transformation process is truly ineffective for everyone.
Getting expert help to deliver quick wins
Driving efforts into a lasting change requires bold vision and ruthless actions. Retailers need to focus on their core business and could benefit from partnering up with digital transformation enablers that will allow them to deliver quick wins within their organizations.
CIOs can take advantage of specialized software companies to help them carry out their digital transformation initiatives. Since this project requires changes in both frontend and backend processes and technologies, having an ally that supports this transformation with the appropriate expertise is a smart agile approach to allocating resources.
There are many technologies that enable retail digital transformation such as ERPs, self-checkout systems, and AI bots, but retailers need to achieve data governance through Customer Data Platforms first to make sure different departments are working with the same precise and accurate data.
CDP’s accelerate digital transformation and allow retailers to quickly test effectiveness rather than investing years on building something only to realize that it does not cover the business needs.
Retailers who wish to survive in the future market need to start thinking about their tech stack and current processes. If they don’t feel comfortable working with technology vendors they can do MVP’s in business areas where risks are smaller but wins can be significantly greater. This approach will make a huge difference in the business and accelerate many processes that would otherwise take too long to revolutionize.
If your business is going through a transformation process, and this sounds familiar to you, then you might want to consider reaching out to an expert and assess in what areas they might be able to help. Click here to talk to one of our experts and learn more about where you stand on your transformation journey.