Four considerations ahead of embarking on in-store digital transformation

As major technology players disrupt the physical retail market, many traditional brick-and-mortar retailers are reinventing themselves to provide an enhanced customer experience—one that pure-play competitors can’t.

From the theatrical training being offered to John Lewis & Partners staff, to Zara’s flagship concept store in Westfield that’s equipped with robotic arms and RFID mirrors, and M&S’s recent roll-out of mobile checkout, ripples of change are beginning to show across the industry.

To survive, retailers must strike that balance between thinking like digitally native companies, and delivering a differentiated in-store experience. Both of these rely on having the infrastructure to boot—from the supply chain to the checkout. For many retailers, that entails a full review of digital infrastructure, and roll-out of organisation-wide digital transformation.

But what does digital transformation mean in retail? Retailers need to create an effective digital value chain – one focused on collecting data (about products, customers and locations), turning that data into insights, and then turning those insights into action. Retail branches need to be connected with a solution that combines both private data network and public internet to give enhanced options to improve speed, availability and provide a platform a retailer can use to transform and innovate their retail experience.

So where might a retailer go wrong in this process? The common pitfalls include:

1. Resistance to change

Research has found that often, and particularly in middle management, people will try to protect part of an existing organisational structure from radical change—largely because of the perceived threat to their own authority, the time required to adapt to a new technology and the value that it can really add. To succeed, all teams should buy into the process, and it must be socialised across the business. Create a clear forum to encourage discussion.

2. Keep the future in mind

Retailers should also consider implementing infrastructure that can continue to advance over time. Whatever the new branch service being added (guest Wi-Fi, faster point of sale, enhanced CRM, video specialist advisor or mobile checkouts), retailers need a cloud-first network solution that will enable them to continue to evolve the customer experience. The days of retailers buying a network for five years to run the business are gone: they need to be constantly evolving their retail experience with new customer insight and customer services.

3. Cultivating a digital-first culture

Research by Deloitte has found that failures are often caused by companies investing in technology, but not investing in the organisational capabilities that ensure their impact. A digitally focused infrastructure – in-store and online – generates a lot of data, about customer journeys, habits, and preferences. But retailers can only benefit from this if they create an insight-driven culture, a unified data strategy or emphasis on turning data into insights. Amazon does well here and is willing to invest in new processes or technologies to see what it can learn—to collect the data, and then look for ROI, rather than the other way around.

4. Disconnected internal processes

Sometimes digital transformation strategies are focused on ad-hoc projects or a single piece of a business. However, these disjointed efforts won’t help retailers master the digital transformation journey. An effective enterprise-wide transformation requires involvement from numerous cross-functional teams. Disconnected processes can lead to fractured solutions, lost data, and reduced insights, hampering the value of the process and putting retailers behind the curve of the next innovation.

What next?

Retailers can’t transform from product-centric to consumer-centric by protecting existing processes, or even technology investments. That will be the death of retail. Instead they must embrace cloud-first, mobile-first software enabled technology and digital architecture, because that way, they can deliver what customers need, and want, when they want it—M&S has rolled out its mobile checkouts in response to the time-poor customer, for example. The high street is increasingly competitive, and one thing is clear: innovation is the key to cut-through, retailers simply can’t afford to stay still.