How to adapt to an evolving digital transformation journey to stay ahead of the pace of change.
Digital transformation can be complex and challenging. Many consider it a strategic imperative, but interpreting its execution varies widely. For some, this has meant updating old legacy systems, removing reliance on Excel spreadsheets, or buying off-the-shelf solutions to replace manual, paper-based processes. It may be that the definition of a successful digital transformation will evolve as the industry landscape changes.
I have worked for a number of different retailers and, rightly so, they have all had digital as a key strategic component next to, often: range and offer, customer experience, team engagement, leadership development, and cost optimisation. Sound familiar? The digital transformation journey varies, depending on an organisation’s specific needs, leading to retailers sometimes onboarding this strategy without having a clear goal in mind. Instead, digital transformation becomes more of an intent, which often lacks a clear roadmap with milestones and a good understanding of the destination.
The pace of digitally enabled change is only ever-increasing, spawning new tech solutions and developments. But, coupled with rapidly changing consumer demands following Brexit, the COVID-19 pandemic, cost pressures due to inflation, and the conflict in Ukraine, it’s all the more important to be clear about where you’re going. Yet, it’s equally crucial to remain agile in order to stay ahead of customer expectations and the competition.
Many businesses now view digital transformation in much the same way as they should approach people development: as an enabler for the business to operate more efficiently and improve the customer experience over time. What this should look like will not always be clear and this, to some extent, is right and will vary vastly depending on the type of sector and a business’s level of digital maturity.
There are so many solution providers out there offering off-the-shelf products and, for some, this is an attractive offer. They bring expertise and experience in solving specific pain points, and there’s a level of comfort in being a ‘fast follower’ and doing what others have already done. “Steal with pride,” as they say, and that may work for some. Nevertheless, off-the-shelf products aren’t a one-size-fits-all solution.
More businesses today are using partnerships to solve business issues or add new channels, whether that is bringing in complimentary offerings or services using concessions or a delivery partner. This can carry its own challenges when it comes to system integration and the need to be efficient and keep costs under control to ensure the partnership is a win-win for both parties. This approach can also add complexity to an already complex business model. The retail, hospitality, and leisure industries have been particularly hard hit and have arguably had to adapt the quickest over the last two years. Balancing costs, customer experience, online/offline trading, and keeping staff and customers safe have been forefront of their minds.
In addition to finding new physical trading partners, service sector businesses are turning to bespoke software solution partners that can support part or all of their digital transformation journey. There are many reasons to take such an approach. It may be that the business doesn’t have all of the capability to build its own or, indeed, the capacity to deliver it all internally and needs support for individual projects. A partnership approach can be extremely helpful as it may be tackling a broad set of operational challenges and having a thought partner that works on a win-win basis can be very valuable as they can provide consulting advice. The partner can also suggest ways to optimise your digital transformation strategy by sharing resources or expertise. They are often licensed providers with the like of Microsoft and Mendix and, therefore, can help choose what’s right for the business based on current relationships. They can also work alongside internal teams and be flexible enough to work with existing partners, as often they have their own partner networks.
Below, I have listed some of the most common challenges I see retail and brand organisations facing today:
- Legacy systems replacement — updating payroll, forecasting and replenishment, intranets, supplier portals.
- Legacy process optimisation — i.e., replacing Excel and paper-based activities; exploring low-code solutions, power applications and the optimum use of cloud services.
- Online/offline (omnichannel) — quick fixes that were put in place during the pandemic that now need refining or improving.
- Sustainability agendas — digital solutions that can support service providers by providing tools to reduce waste and the use of packaging as well as track the product lifecycle.
- Labour optimisation — tools and solutions to support the right people, the right place, at the right time goal that can be built to suit and support team engagement and communication, or to organise tasks digitally.
- Offer and product — i.e., store and ranging design, customer personalisation, loyalty programmes, pricing and promotions, right product, right location, right volume; tools that can be created to support any customer-facing need, including the use of artificial intelligence and augmented reality.
- Data management and 24/7 support services — these are becoming essential for businesses that now operate online and offline and across multiple time zones.
If you have a broad digital transformation strategy, deciding whether to partner or buy several off-the-shelf solutions will need careful consideration. Either way, having a trusted credible partner or multiple partners with the experience and expertise to support you along your journey will be invaluable in helping your business thrive in the future. Such a partnership can also enable you to get a clear view of your digital transformation strategy, helping you to stay on track to meet your goals.
For more information on how the smart use of technology can accelerate your digital transformation journey, visit Objectivity’s retail services page.
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This article was also published in The Retailer, our quarterly online magazine providing thought-leading insights from BRC experts and Associate Members.