Over the past year, I have written extensively about the changing nature of technology and its ability to transform almost every industry that is involved with it.
One of the industries that is being hit the hardest is the retail industry. The days of visiting shopping malls over Christmas – where you are likely to receive a few bruises, misplace a child for a period of time, or both – are swiftly coming to an end. The days of the nerd-like introverts are here.
What is the pace of change? How are retail businesses in the world’s biggest economies being affected?
I recently read an article on XXXXX which showed that When it comes to digital disruption, the retail industry in Asia Pacific has seen more than its fair share.
The introduction of digital technologies has changed the ways customers shop. Online stores, smartphones and same-day deliveries are offering more and more flexibility for shoppers throughout the region.
The article points out that in his recent National Day Rally speech, the Prime Minister of Singapore acknowledged the fast-changing nature of the retail industry. He highlighted that traditional retail is being transformed by technology. People are shopping online. Delivery services like RedMart, Honestbee and Amazon Prime Now have become popular. In addition, he observed that traditional retail
stores will not disappear, but will be reinvented.
Why retailers are digitizing aggressively
The article adds that retailers are now in survival mode. The good news is that a significant number of them have woken up to the reality of digital disruption. They are starting to rethink the customer experience and exploring innovative technologies to deliver great digital and physical experiences.
According to CenturyLink and 451 Research, about 34% of retailers in Asia Pacific said they have seen major disruption over the last three years. However, 46% expect this disruption to increase over the next three years. More than half of retailers in Asia Pacific have a formal digital strategy and are actively digitizing. Meanwhile, 22% are transforming digitally via siloed projects. Another 17% are in the planning stages before kicking off their digitization initiatives.
Retailers across the board have four main goals when transforming digitally. For those in Asia Pacific, the priorities are:
• raising operational efficiencies;
• improving agility levels;
• driving customer experiences; and
• managing risks better.
The article points out that delivering great customer experiences is paramount for any successful retail business.
As customers now interact with brands via multiple channels, retailers must now follow suit; especially in the realm of mobile. With digital transformation, retailers aim to incorporate multiple channels, mainly digital, and touchpoints that will create seamless customer experiences.
Transformation must involve all aspects of the business, from retail stores to web and mobile applications as well as back-end processes such as pricing and inventory.
The IT industry must be extremely agile in order to tackle these requirements. Retailers are looking to simplify IT infrastructure designs in order to take on new services and rising customer demands, all while ensuring zero disruption to the customer. This has become especially challenging, in light of alternative distribution channels.
The article adds that retailers must make improvements to e-commerce systems, tighten up supply chain operations and use data-driven marketing promotions. Failure to do so can lead to negative results. Shoppers will abandon purchases due to inefficient checkout lines or over-complicated online transactions.
Impatient customers might receive a negative impression if staff have to leave the shop floor to check for item pricing and inventory. Meanwhile, retail staff can also miss opportunities when it comes to product recommendations, employing upsell strategies and giving personalized services.
The gold at the end of the digital rainbow
The article points out that the element of experience is extremely crucial in the realm of retail. By getting digital transformation right, retailers can improve customer interactions and take advantage of numerous opportunities.
The article has a point. Success in digital transformation will allow retailers to harness the power of data growth. As digital technology becomes central to the way customers interact with brands, it provides more touchpoints through which retailers can collect and analyses customer data to discover patterns which they can use.
New machine-learning algorithms can be applied to help retailers see further and deeper into customer behavior, revealing better insights for smarter decision-making.
Four steps to creating the retail business of the future
So how does a company transform itself into a business of the future?
The article points out that digital transformation in retail might sound like an arduous task. However, with a proper roadmap, retailers can simplify and accelerate the journey significantly. Retailers embarking on any digitization journey must be able to:
• Improve competitiveness by putting customers at the heart of transformation. Customers must always be at the heart of what retailers do. Digital transformation is no exception. The journey must enhance customer experience through improved agility. Whether it’s modernizing applications and infrastructures, accelerating fulfilment and providing contextual experiences, the customer must be at the center. Digital initiatives should smoothen friction points, and provide channels for personalized engagement and new ways to enhance customer satisfaction;
• Be mindful of customer data security and privacy. With the amount of data available to brands nowadays, the burden of security increases. Data security must be built into the infrastructure, processes and habits of users. Digital initiatives must have multiple layers of network-based and application security. Retailers need to understand that security is more than privacy concerns and cyber threats but fundamentally securing company data throughout its lifecycle. They can prioritize assets to secure and segment them according to risk before applying the appropriate controls and safeguards;
• Seek the help of technology partners. When it comes to transformation, retail companies typically prioritize the way they use data and business information, how they organize and run their business processes and the technology platforms they use to carry out their daily operations. For a more streamlined process, retailers can entrust some of these transformation fundamentals to strategic business and technology partners. This grants them access to the expertise of IT, cloud and data specialists, who might not be available in-house; and
• Ignite change with the power of the cloud. Cloud services are increasingly essential for unlocking agility, operational efficiency and customer experience in the retail sector. Retailers can tap into its potential to support initiatives like IoT and the retail store of the future. They require industrial-strength connectivity, a new generation of applications and the compute power needed to drive intelligent decision-making. As retailers start using multiple clouds, they must ensure that they are able to connect rapidly and without failure with more diverse ecosystems.
By following these steps, and taking into account all of the points presented above, companies can become businesses of the future.