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Why digital transformation is vital to the future of retail

Traditional retailers around the globe are facing unprecedented pressure. With online competitors able to offer the same products, often at a lower cost and with a greater degree of convenience, consumers have come to expect more than the traditional retail experience can deliver.

By Tanja Lategan, CEO, Enlight Strategic

That’s as true for South African retailers as it is for their international counterparts.

While economic pressures have certainly played a part in the decline of several major brands over the past few years, there’s no doubt that failure to embrace changing customer expectations has also played a role.

If retailers are to ensure they don’t fall victim to the same issues, they must embrace customer-centric digital transformation.

While this is obviously something that needs to happen across the organisation, a marketing-led approach can provide the most immediate returns.

The state of play

For a long time, retailers have been laggards when it comes to digital transformation. Research from Gartner in 2018 showed that just three percent of retailers were seeing results from digital business initiatives. 

In the last couple of years, however, players across the industry have started to catch up and are embracing technology. A recent Gartner report found that as many as 77% of retailers plan to deploy some form of AI by 2021.

Far too many retailers, however, are investing in it solely from a warehousing and operational side. In doing so, they’re missing out on the potential impact digital transformation can have on marketing.


Is your business ready for transformation? Take our 5-minute Digital Maturity Assessment to find out and get a FREE report.


Digital-led marketing

Ironically, most retailers are ideally poised to take advantage of marketing-led digital transformation. Any retailer with a loyalty programme already has vast amounts of valuable customer data.

With the right data extraction and analytics tools, this data can be used to gain valuable insights about what individual customers are buying, how much they’re spending every month, and where they’re spending their money (in both the physical and online realms).

This can then be refined and used to provide customers with personalised marketing across the digital channels of their choice.

As well as individually-tailored, highly visual forms of storytelling, retailers can provide customers with personalised offers that improve their overall experience of the organisation.

This, in turn, means that they’re more likely to remain loyal to the retailer in question, spend more money with it, and recommend products to their friends.

That’s a lot of advantage to be gained from retailers simply making the most of the tools available to them.

Factor in the potential for internet of things (IOT) technologies to dramatically improve the in-store customer experience and it’s clear that there’s no need for retailers to lurch into obscurity, provided they’re willing to embrace change.

Getting started

For many legacy retailers, however, even getting started can be a challenge. This is especially true for the largest ones, where getting the organisation to embrace change can feel like turning around the proverbial ocean liner.

Because retailers have been slower to digitally transform than most other industries, however, any movement can still produce significant results.

Before any organisation can get started on its digital transformation journey, it’s vital that it conducts a digital maturity assessment.

This allows the organisation to determine where it is in the present, so that it can define where it wants to go in the future and how to get there.

It’s important to note that, even with a proper assessment and plan in place, digital transformation won’t happen overnight. It’s a long-term game with gradual progression.

But by starting with one area of the business, or even with a single system, retailers can see the impact of digital transformation without upending the business in its entirety. Implemented properly, that success will filter through to the rest of the organisation organically.

Retailers still have plenty to gain from digital transformation, but if they’re to experience its full impact, they have to embrace it now rather than later.


Is your business ready for transformation? Take our 5-minute Digital Maturity Assessment to find out and get a FREE report.