Within retail, market leaders including Blockbuster Video and BHS have gone bankrupt in recent years after failing to embrace the increasingly digital environment they were operating in. These previously steadfast market leaders have been usurped by born-digital start-ups such as Netflix and ASOS, which has left the old guard scrambling to digitally transform to ensure they do not become the next big name to go to the wall.
Retailers can look to industry trailblazers such as Macy’s and The Co-Op, which have acted on the need to transform digitally to drive sales and enhance customer centricity in today’s omnichannel market. However, as the unfortunate case of Jaeger slipping into administration while in the process of digitally transforming shows, many of the high street’s famous old names are sitting in the last chance saloon with clunky, out-dated manual systems. That sense of urgency is definitely justified, but if retailers panic and rush through a digital transformation that is not properly thought through, they could end up doing more harm than good.
Blindly following the herd could be a very dangerous tactic in this situation. Put simply, the point of digitally transforming an organisation is to make siloes and manual processes a thing of the past, as these waste time, cost money and prevent organisations from quickly changing direction and behaving in an agile manner. However, if a retailer rushes through a digital transformation without properly planning the outcome, they could be left with a digital system which is not fully integrated into the wider business ecosystem. Rather than eliminating siloes, this would open up fresh ones, making it difficult to provide a good customer experience, let alone trade profitably in the long-term. This would leave behind a sluggish operation which is slow to move, and difficult for employees to operate, negating the point of the transformation. If they are not careful, retailers will not have anything to show from the cash and time investment they have put into a digital transformation.
It is encouraging to see a real sense of urgency to leave archaic manual processes behind, but there is a very real risk that a botched job could do more harm than good, leaving a retailer even further behind their competitors than they were before. So how can retailers make sure their digital transformation is a success? Here are two key areas to focus on:
Ensure that all new systems integrate with the company’s existing technology. Retail management platforms run at the heart of everyday retail operations, both in-store and online, so it is absolutely mission-critical that these are connected with the updated systems.
This is where using retail management platforms that easily integrate with wider digital ecosystems can really pay off: for example, Retail Pro International is part of the SAP PartnerEdge® program; using a combination of Retail Pro and the SAP Business One® application gives retailers a very powerful, integrated solution in which all the dots are fully connected. Already 130 retailers, including the likes of Samsung, Under Armour and Samsonite, are enjoying the optimised data and increased visibility that the combined programmes provide across all global locations. This puts them in a great position to make better, more intelligent decisions, which is becoming an increasingly key ingredient for success in the digital era.
We chose to link with SAP Business One® as the platform was designed specifically to aid growing businesses to instantly analyse expanding volumes of data and gain the benefits of fast application performance while maintaining a streamlined IT landscape. It is available on-premise or in the cloud hosted by SAP partners, making it easily available, and flexible regardless of how IT structures might change in the future.
They say a business is only as good as the people it employs, but a case could also be made that to a certain extent, the people a business employs are only as good as the tools you provide them with. The spirit of a digital transformation is to improve working conditions for everybody in the business, from the shop floor and returns desk to the warehouse and customer care phone line. Those people enjoy the outcome of the digital transformation, but retailers need to remember the other people who are involved in the digital transformation process: those who make it happen in the first place. Without getting the right people involved in the process, retailers set themselves up to fail.
This is where thinking in strategic terms holds the key to success: special steps have to be taken to ensure a positive outcome. Creating a special internal taskforce seems to be a popular tactic, with IDC predicting that by the end of the year, 70 per cent of the Global 500 will have created a dedicated team responsible for digital innovation.
In addition to those who might be selected to play an active role in the process, retailers should also draw upon the direct experience of a wide range of employees to ensure that when digitalisation happens, the changes are ones that have been put in place with the end user in mind. If a customer approaches an employee on the shop floor, for example, what kind of information are they likely to ask for (stock availability, for example), and what is the most effective way of sharing that information with them?
Two steps to success
Of course, there’s an urgency for retailers to undergo digital transformations at the moment, but by rushing the changes through, they run the risk of wasting time and money opening up new siloes within the organisation, doing more harm than good. However, by making sure their systems are fully integrated, and they empower individuals within the organisation to achieve the appropriate goals, they will put themselves in a position to thrive.
Kerry Lemos, CEO, Retail Pro International
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