Evolving expectations from shoppers, the need to blend digital and physical experiences, supply-chain challenges, and increased competition from digital-first players (think: Amazon) are retailers’ modern-day reality.
Indeed, the need to transform has never been stronger, yet there is no playbook on how to do it right. Also, it’s easy to mistake digital transformation as just a replatforming initiative.
Retailers need to first understand that what’s driving their world today is much different than in the past, said Craig Gorsline, a digital transformation consultant, in an exclusive interview with CMO.com.
“Speed, scope, and impact are all operating at a different velocity than it did 10 years ago or 20 years ago,” he said. “Companies are facing the stark reality that they need to not just augment legacy technology, but they also need to work to really rewire their entire enterprise. Technology is only one slice of the digital journey.”
Adobe/Econsultancy’s 2017 “Digital Trends In Retail Report,” from earlier this year, identified eight requirements for digital success: collaboration, culture, data, process, skills, strategy, technology, and UX design.
“Customer experience innovation isn’t possible without a change in culture, embedding principles of innovation into the culture, and rewiring the skill sets of individuals,” Gorsline said. “It’s about approaching product development, marketing, UX, etc., in different ways than in the past, when execution was deterministic. In this world of digital transformation, it needs to be iterative. It needs to be learnings-based.”
The problem, according to Jen Horton, senior research director at SiriusDecisions, is that digital transformation is oftentimes being driven from within the middle ranks of the organization, with little buy-in from the C-suite. True transformation, she said, requires a cultural commitment.
“I am seeing about half of the digital transformation being initiated from within the middle-management ranks and the other half being initiated by the C-suite,” Horton said. “The second pitfall I see is senior leadership wanting digital transformation, but they don’t have a qualified change agent and team to lead, road map, and project manage what is needed.”
Companies often have the right vision and desire to transform, but they don’t have the right resources, she said. They must craft digital transformation team structures and roles. A recent study by PwC’s Strategy& group found that just 19% of the 2,500 organizations studied have a chief digital officer or someone who leads digital strategy specifically. It’s a real shame, since the study also found that an organization’s digital transformation journey’s success rate correlates with hiring a digital leader.
The most successful companies instill a culture that lends itself to innovation and experimentation, the Adobe/Econsultancy report found. Nearly three-quarters (73%) of retail respondents said they have a cross-team approach with the customer at the heart of all initiatives. European retailers are least likely to embed a customer-focused culture, with only 61% who indicated that’s the case (compared with 82% in North America and 79% in Asia Pacific).
Collaboration, which is very much related to company culture, is an area where retail respondents indexed significantly higher than their nonretail counterparts. Two-thirds (66%) of retail respondents agreed they have the tools that allow for streamlined workflows between creative, content marketers, and web teams, compared with 60% for nonretail respondents.
“Retail businesses typically recognize that they have a great opportunity to foster and master cross-departmental processes, which helps to facilitate the kind of seamless synchronization across different touch points that is necessary for omnichannel success in the digital age,” the report stated.
To get there, Gorsline said, retailers need to change the way the entire organization approaches execution and the delivery mechanisms of digital innovation and design.
“Tied closely to that is the user experience side,” Gorsline said. “How do you really make sure you’re hitting the mark with your customers? How are you thinking about service delivery and opening up channels for adjacent or ancillary service methods in ways that actually are meaningful to your customer? And that again comes down to iteration. Get out of your office. Get into the customer’s shoes. Go where the customer is.”