A recent survey shows that ninety per cent of senior decision makers within the retail industry believe that retailers who fail to engage in digital transformation won’t be operating by 2024. Adding to this, a quarter believe that those retailers who continue to conduct business in the traditional way, will go out of business within three years.
In this fast-paced environment, which demands cutting edge digital transformation, it is essential that retailers embrace change by modernising and future proofing their operations. However, according to the survey by Hitachi Consulting, just 45 per cent of retailers have passed the midpoint on their digital transformation journey, and only 1 per cent consider themselves to be where they want to be.
Three-quarters of respondents who were asked to consider their own operations, cited lack of internal strategy, management buy-in and knowledge as the biggest barriers to digital transformation, with many stating they are concerned about the risk associated with a digital transformation change programme.
“More and more retailers are experimenting with innovative technology. But as the research shows, it’s a small minority that are at the more advanced stages of the digital transformation journey, and the majority are therefore missing out on many of the benefits, such as improved cost control and profitability,” says Pierson Broome at Hitachi Consulting.
“However, it’s not all doom and gloom. 99 per cent of retailers are now tackling digital transformation – even if some aren’t far along their journey, that’s significant progress compared with a few years ago. Now their focus needs to be on implementing a full and clear digital transformation strategy, guided by the knowledge and experience of experts and backed by senior management, to provide a solid foundation for remaining at the cutting edge of retail IT systems. This will give them the best shot at not only surviving to 2024, but thriving.”
In our experience, retail businesses should take a ‘SWAT team approach’ to transformation by bringing in a smaller, external team who will work alongside management to help them make bold, brave decisions which may well go against the grain of how things have always been done in the past. One that will challenge existing ideas and capitalise on the raft of new opportunities presented by changing consumer patterns.
At Beavis Morgan, our business specialists are committed to providing entrepreneurial retailers with an understanding of the key issues driving the retail sector.
Being centrally located within walking distance of London’s ‘silicon roundabout’, and working in partnership with our technology business experts, we are well positioned to provide retailers with the most appropriate solutions to improve operational efficiency.
In the age of digital, those businesses who do not invest, reinvent and remain current run the risk of failure. Don’t let that happen to your retail business.