Technology holds massive promise for the retail industry, and retail brands are each in their own stage of the digital journey. In this post, we look at how to drive a digital retail transformation.
As I look back at all the connections we’ve made, partnerships we’ve formalized, and solutions we’ve launched during Valence’s month of retail, it’s apparent that this industry – which is no stranger to change – faces a large crossroad. There are major threats as well as exciting opportunities as the retail landscape gets more competitive, more personal, and more connected.
Throughout the month, we’ve covered a lot. I started by asserting that experiential retail is not new, but rather an ever-evolving paradigm. I then announced our Retail Innovation Accelerator, which will help incubate transformative solutions for our customers across voice, data, and blockchain. And finally, I recapped the 5 most important trends and insights we gleaned at NRF’s Big Show.
For my final blog post in this series, I’d like to provide some color on how you can help drive digital transformation in your retail business. Whether you’re a c-level executive, technology director, or store manager, there’s no doubt that you’ve been exposed to changes brought by a digitizing world. Just the fact that your customer carries a smartphone in their pocket should be seen as a major disrupter. In this post, I hope to illuminate how you can drive your organization to embrace these disruptions rather than fight them, and lead the right investments that yield future growth.
Embracing Change for Operational Efficiency
What does the term “digital transformation” make you think of? It more than likely conjures thoughts of big, flagship-style customer experiences: wow moments that are high-touch, highly-personalized, and focused on making a brand memory. While these kinds of experiences are important to engaging fans, they won’t drive lasting momentum unless coupled with internal and operational digital transformation.
Retail strategy can be mapped on a pyramid, similar to Maslow’s hierarchy of needs. While there are exciting opportunities around customer experiences at the top of the pyramid, retailers will have more success along their digital transformation if they consider basic and operational needs first to build a strong internal foundation. The best way to secure budget for transformative customer experiences is to save money through operational efficiency. Can you utilize AI to predict stocking needs? Can you better analyze sales data to inform your buyers’ decisions? How about use sensors to understand traffic patterns to more efficiently staff your store? By establishing transformation from the ground up, you’ll unlock more business opportunities and free up budget.
Justifying Your Digital Transformation Investment
Embracing any kind of transformative business practice takes an up-front investment. However, all too often this fact leads retailers to think that digital transformation is only for the risk-takers. I’ve heard it before: “we want to build a proof of concept and deploy a pilot experience, but don’t know how to justify it to our CEO”. The truth is, if you’re trying to paint the picture of a 1:1 connection between a transformative PoC/pilot and immediate profits, you’ve probably already lost the battle. Investing in the future takes a jostling of resources in the near-term, and I could write an entire thesis on the intricacies of reorganizing and reallocating your investments to drive change. However, justifying your investment in digital transformation can be a whole lot easier.
Simply put: learning about your customer is the most important investment you can make. A good digital transformation strategy always unlocks more data points – whether from IoT sensors, mobile traffic analysis, or AI services – about how your customers interact with your brand. The key to driving digital transformation investments with internal stakeholders is to communicate the ROI of enhancing your understanding of customers’ needs and desires. Furthermore, digital implementations can often act as a mirror: by learning more about your customer, you in turn learn more about your company.
Thanks again for following this retail series, and don’t forget to check back for future posts. If you want to chat more about how we can help you on your digital transformation journey, contact us.