Becoming a nimbler, smarter enterprise in business 4.0 world

The retail industry has reached an inflection point where technology-driven transformation is crucial to a company’s growth and market value. Over the last decade we have gone from having none of this tech to having a wide variety of technologies, resources and data at our fingertips which can create game-changing advancements for organisations.

However, legacy processes continue to hold retailers back from technological advancement. In order to fully embrace digital transformation, companies must reshape their culture, structure and ways of working. Essentially, it is about how to make the most of technology in the context of your company.

A new study from Tata Consultancy Services surveyed senior executives in retail and other industries on their level of investment in digital transformation technologies. As part of this, they analysed their preparedness for the “Business 4.0” era.

Key to this are four behaviours of Business 4.0 used to identify digital transformation success: driving mass personalisation, creating exponential value, leveraging ecosystems, and embracing risk. Despite this, a staggering 20% of retailers have not adopted any of these behaviours, allowing themselves to fall behind other industries such as telecoms, manufacturing, banking and financial services.

The main obstacle for retailers is that while they strive to be future-ready, they struggle with bringing new innovations to life. Part of this is due to industry challenges such as revenue growth – with only one in five (22%) expecting more than 10% revenue growth over the next three years.

For retailers, personalisation is essential to making the most of new technologies. As Adam Warne, CIO of UK retailer N Brown told TCS: “Mass personalisation is probably the next evolution of real customer service. It is the thing that makes customers feel loved by a brand.” One retailer who is already doing this is Marks and Spencer. In 2018, as part of its transformation strategy, the clothing and food retailer partnered with data science company Starcount to better understand customers and provide more personalised offers and experiences through Sparks, its loyalty initiative.

This level of personalisation relies on innovative thinking and specific skills, to develop the technology needed. However, more than a third (34%) of UK businesses said skills shortages are a major challenge. Warne agrees. “Today we have to think differently about how we attract the right talent,” he said. “Businesses need to invest in a process to create a talent pipeline.”

Investing in a talent pipeline is something TCS takes very seriously and retailers should too. We run regular events across the UK and have reached 570,000 students since its launch. As part of this, we are also encouraging young girls to pursue STEM with our new pilot initiative, TCS Girls in AI. So far, we’ve reached more than 800 girls in Scotland through a series of workshops that explore machine learning and coding but also look at how tech can be used to solve societal problems.

Part of the issue with retailers not adopting technology can be traced to a lack of trust – their willingness to adopt technology was lower than in other industries. Only 29% would use AI to develop new business models, and 39% would consider using automation to free up workers. Coincidentally, embracing risk is the behaviour least likely to have been adopted across all industries. A failure to embrace risk means retailers are likely to be left behind by the companies that do. Already, some retailers are utilising blockchain to track and verify the authenticity of products in their supply chain, and others are using AI to dramatically reduce shelf lives. Embracing changes like this means there will be fewer wasted products and more optimisation of shelf space as retailers can see what consumers are purchasing how and when.

At such a disruptive time for retailers, with consumers increasingly moving online, now is the time to offer so much more. Everyday more technology is becoming mainstream; AI, machine learning and IoT to name a few. By adopting new technologies, retailers can improve their businesses and become more agile, more readily able to innovate and more robust.

That said, retailers need not panic to adopt all technology products and services overnight. The key is to take incremental steps – make progress by prioritising digital transformation first and then experimenting to see what will really make a difference. From there, you can begin to create a digital plan that makes sense for your business. It is not about doing what everyone else is doing, it is about embracing technology which shapes your business.