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Five key learnings of digital transformation in retail

31 October, 2018

In the retail world, business is changing - fast. The role of the physical store is dramatically changing, from driver of revenue and growth to more of an experience for the customer and enabler of online business. And the online business is growing at the expense of flagship stores in central locations that are showing decreasing revenues and profits. At the same time, the customer expects to have the same shopping experience across the different channels – physical, online or app – requiring a more integrated technology approach. Furthermore, the customer expects to buy products or services in a personalized way with a high degree of service – easy to understand, easy to buy, easy to pick up purchased items, easy to return.

Sounds challenging? Well, all this requires a well thought through and integrated landscape of information technology services, products and solutions.

One of our customers had historically worked with physical stores but had started the online business around 2010. Now they wanted to take the next step and grow the business internationally and especially online. In preparing for that, they realized the technology landscape was scattered, not integrated and quite outdated, which hindered them in their ambition. They asked Ascend to help them set a strategy for what to do.

Here are our key learnings in this project:     

  • Focus on your business challenge – going digital is a means to an end. Depending if you want to expand internationally, increase revenue, shorten lead times – the solution will differ. The business drivers need to be guiding all discussions and priorities, no matter if you look at investing in Big Data, consolidating online solution or other areas.
  • Understand the business abilities you need – often there are a few key abilities that really matter to your customer. It might be speed in check-out, a common experience in your chosen channels or real-time stock information. Many technology providers have products and services that they want to fill with as many bells and whistles as possible. But only a few of them are important. To make sure you make the right strategic choices, you need to know which those are.
  • Agree what creates your competitive edge – often when discussing what’s important to focus on and really invest in, any business function or business unit claim they are the most important. A natural reaction of course. But when looking at the overall technology landscape in an organization, there are differences. In some areas, it’s okay that it “just works”. In some areas, you need better ability, for example, automated processes. And in some, you really find where you make a difference, where you find your competitive edge – and that’s where you want to make your key investments.
  • Competence is key – digitalization drives the need for new technology for sure. But technology typically needs a context to add value. Especially in organizations which come from more “analogue” ways of working, it is important to identify and secure competence that can understand the value of technologies, what abilities it adds and how it can bring value to your organization. Access to competence cannot be stressed enough. Sometimes it can be found in a partner or supplier, but you typically need some key competencies in your own organization.
  • Execution is where it happens – as in all types of strategy work, they all provide value only when they are executed on. A brilliant strategy that nobody in your organization understands is not really adding much. It means that if you want to change a direction for your organization, all (or most) need to understand the strategy. It also means that you need to translate it into actionable initiatives or projects, need to identify and decide who to drive it and what it will take to realize. This is often a part a bit forgotten… but that brings all the value.

 

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