But despite the importance of having a digital transformation strategy in place, 52 per cent have not defined or started implementing a digital transformation strategy yet.
The world will see a transition in retail planning — from product-centric to customer-centric — and retailers will leverage digital technologies to reach the modern shopper, a new survey says. According to the fourth annual JDA/PwC survey, nearly half of retail executives surveyed, who have a defined digital strategy, believe digital transformation has firmly taken hold in retail. The report, “CEO Viewpoint 2017: The Transformation of Retail”, which surveyed over 350 global retailers, found that 69 per cent of the executives said they plan to increase investment in digital transformation over the next year.
“These results reveal the continued balancing act retailers are struggling with to deliver superior omnichannel execution and profitability, all while meeting the demands of the modern shopper, and keeping pace with the digital transformation underway across the supply chain,” Lee Gill, Group Vice-president, Global Retail Strategy, JDA, told IANS.
But despite the importance of having a digital transformation strategy in place, 52 per cent have not defined or started implementing a digital transformation strategy yet. Mobile-enabled applications (85 per cent), big data (86 per cent) and use of social media data (85 per cent) are the top technologies respondents are investing in or plan to over the next 12 months.
Automation and IoT (Internet of Things) are lower on the list for investment but gaining momentum as they are perceived as game changers. The report found that as omni-channel retailing continued to mature, retailers have blurred the lines between online and store, with their attention shifting to execution and profitability. “In most advanced markets, they no longer talk about omni-channel — that is yesterday’s news. All they talk about is digital transformation to enable good customer experience. Markets that are not as mature need to ensure the fundamentals are in place to accelerate the adoption of new technologies,” Gill added.
Only 10 per cent of those surveyed can make a profit while fulfilling omni-channel demand. Only 12 per cent of CEOs surveyed, down from 19 per cent in 2014, provide a seamless shopping experience across channels.
For Gill, the shopper in very advanced markets like Britain and the US has a new shopping pattern that is divided into four distinct phases.
First is discovery, where a shopper does online research about the product. Second is the purchase, which can be on a mobile device, a PC or from within a store.
The third phase is fulfilment where a retailer should be able to deliver goods as the customer wants it.
“It is not wholly about the quality of order and place of delivery; time also plays an important part. If a consumer wants the order in one hour, a retailer should also fulfil that want to retain the customer,” Gill said.
The final phase is the reward stage where if you performed well, you will be rewarded by customer advocacy and loyalty.
The survey found that retail CEOs are increasing their investment in “buy online, pick up in-store” (BOPIS), also known as “Click and Collect”, with 51 per cent of respondents said they offer or plan to offer BOPIS in the next 12 months — up from 47 per cent in 2016.
Conversely, fulfilment options that are becoming costlier (e.g. same day delivery) and less profitable are areas where CEOs are decreasing investments in 2017, the report found.
“The year 2017 will see increased charges for online orders (57 per cent plan to or will make this change in the next 12 months) and a rise in minimum order thresholds for free standard home delivery or BOPIS which 62 per cent plan to or will make this change in the next 12 months,” the report found.
What else should a retailer do to hold on to its customer? “Greater intimacy, which is not intrusive with the customer, is going to be the future in retaining them. Experience of the brand is critically important,” Gill pointed out.