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November 13, 2019

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What is digital transformation of the store?

January 27, 2017

 

During the National Retail Federation trade show earlier this month in New York, the topic of digital transformation was widely discussed. It appears that this is another concept that has many different definitions to different organizations.

 

We believe that digital transformation is an important concept for retailers to embrace and with this in mind, want to help retailers understand it and build it into their strategies for the upcoming year.

 

Our definition for digital transformation can best be summarized below:

  • Digital transformation is about creating a responsive retail organization that personalizes the consumer experience and adapts to the consumer expectations.

  • Digital transformation is about developing a comprehensive strategy for existing business processes with consumer engagement in mind.

  • It is about building the infrastructure and implementing the components of an end-to-end business process so that it can scale and evolve with the business.

  • It is not about adding more point-based (tactical) solutions within the business to meet a short-term need or objective.

 

If adopted, the transformation process creates a retail environment where all parts of the business are focused on the consumer. Digital transformation is about creating a comprehensive set of capabilities across all retail sales channels so the entire business can be responsive to the consumer and the market demands.

 

The old retail paradigm was all about operations and people, place and product. Digital transformation is about building the infrastructure to facilitate the new retail paradigm… enable, empower and engage.

 

The new retail paradigm is not just about the use of technology. It is a shift in the mindset of the organization to focus on consumer engagement. It is about building the organization to understand and be responsive to the consumer and removing the inhibitors to achieve the next level of consumer experience.

 

For example, think about retailers who add a loyalty program with only physical cards and no way for the consumer to check their loyalty points or use them outside of the store. Or sending an offer to consumer via email without having the ability for the point of sale system to be able to scan a code on a mobile device. These and many hundred other examples are ways that the point-based solutions are lacking and need to be re-imagined to be more consumer focused.

 

The exciting part is that technology has advanced to a point where it can provide these capabilities and meet the demands of the retail industry in a scalable and economic way. These advances in technology and the adoption of mobile technology by consumers have made digital transformation a reality for nearly all retailers.

 

During the next few weeks, we will discuss ways that retailers can move forward with their digital transformation projects and focus on consumer engagement in their stores.

 

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