The impact of the digital economy has created challenges for all CEOs, particularly for those in the retail sector. What began as a quest to create the perfect customer experience has made retailers turn their attention to building a superior omnichannel environment, to keep up with the proliferation of touch points and to meet the ever-changing shopping habits of consumers.
Recently, Stibo Systems conducted a comprehensive research study to learn more about the state of the digital transformation and the key benefits and challenges companies from various industry verticals and regions have faced. What we found is that three-quarters of all respondents (75%) claimed that they were currently undertaking a digital transformation project, while nearly three out of five (59%) said their organization was investing more in related transformational activities in 2015 vs. what was spent the previous year.
Let’s face it, for nearly all industries, digital tools are disrupting the business environment and require significant changes in operations, communications and selling; and it is about to get much worse. Take smart devices for example. The adoption of new sales channels, the abundance of product options and the emergence of mass personalization have increased consumers’ expectations and price sensitivity, leading to less brand loyalty than in the past.
So while managing information and synchronizing it across channels has become a pressing priority for retailers who have been implementing an omnichannel strategy, the reality is it is becoming less about the channel and more about creating a relevant and consistent customer experience. This may be why retail and distribution businesses are taking steps to address the need brought about by the growing number of channels and to meet the changing behavior of their customers, according to the study.
At the WWD Digital Forum in September 2015, Christopher Walton, Vice President and Merchandise Manager at Target, summed the situation up best when he said, “Our customer doesn’t care what type of sale it is. Experiences are coming together and creating almost a new channel unto itself. It’s not omnichannel, it's on-demand. No one channel and no one experience reigns supreme.”
Creating an effective customer experience is a sentiment that appears to be growing among numerous businesses. When asked about the core benefits they’d seen or were expecting to see as a direct result of implementing a digital transformation, businesses appear to be increasingly focused on generating revenue rather than cutting costs internally.
According to the Stibo Systems’ study, nearly three out of four respondents (74%) reported that “the ability to meet customer expectations” was significantly more important than “reducing the cost of doing business” (62%) and “reducing IT costs” (54%).
The overwhelming focus on meeting customer expectations is no doubt driven by the spending power of today’s digital generation, who expect products and services to meet their individual needs, be accessible at any time they want, via any channel they choose. Therefore, it’s perhaps unsurprising that this is a particularly high priority for businesses in the retail sector. It follows naturally then that customer management and service were listed as starting points for digital transformation by approximately two-thirds of companies, with three-quarters of retail businesses seeing these as priorities.