There’s no doubt about it: The retail world is going digital.
In his article “A Digital Core for the Digital Age,” Markus Schwarz points out that 90 percent of total available customer data has originated within the last two years. This digital revolution has affected all retail organizations, large and small. Even the most reluctant companies are learning how to navigate a new business landscape.
Schwarz goes on to discuss “inadaptable” businesses, noting that the fate of retail executives who opt out of the current digital revolution is grim. “The digital economy is disrupting industries,” he writes. “These business leaders are ignoring a mounting body of evidence. And they are at a huge risk of being left behind because they are missing a strategy for transforming their business functions.”
A recent survey on the retail sector by the global branding company Siegel and Gale found that almost half of retail executives believe that risk of business failure increases as a result of digital disruption. By contrast, businesses that have embraced digital technology are thriving.
Uber and Warby Parker are two examples of companies that are digital revolutionaries. Both have changed the face of their respective industries, and both owe their success to a business model that is built around digital strategies and technological innovation.
This is also true of the 150-year-old retail department store Macy’s. In fact, this iconic retailer has become a digital leader on the cutting edge of digital and mobile technologies. It received a 2014 Mobile Retailer of the Year award.
Few retail companies will move forward without exploiting the benefits of the digital environment, including cloud computing, supercomputing, and hyperconnectivity.
Vala Afshar is a Huffington Post blogger and digital expert. In a recent article, he identified six areas of digital transformation in the retail sector: customer feedback, meeting customer preferences, tracking macro-economic trends, driving value, promoting existing brand awareness, and organizing data.
Benefits of retail digital engagement
You don’t have to be an Uber or a Warby Parker to create and capture value from the new digital economy. Retail organizations of all kinds are using digital technology. Some want to support flexible supply networks that enable short lead times. Others want access to “made-to-order” assortments. Still others want to trace the supply chain of various interconnected warehouses. And still others want to complete retail interactions with no physical inventory.
Perhaps most importantly, digital technologies can help retailers better serve customers. They are able to provide automated and contextual pricing by looking at each shopper’s unique digital footprint. In turn, they can drive customer engagement.
Retail companies can also use social media technology to connect with customers. The immediacy of this approach can provide instant consumer gratification, and its precision can enable personalized “segment of one” marketing and merchandizing. Retailers can also augment the brick-and-mortar shopping experience through various in-store technologies.
Digital technology has fundamentally transformed the basic retail business model. This new model focuses on outcomes rather than products. It creates new businesses that monetize data as well as products. Gathering data is essential to all aspects of the new digital marketplace, but this data is useless without an effective method of storing it. Because this data also requires organizing and protecting channels of access, all businesses need to establish a strong digital core.
The power of a digital core
A digital core is essential to managing consumer information. It allows professionals and consumers to access and use collected data.
The simplification of data processes is also essential to general company success. Recent studies show that 70 percent of consumers are big fans of simplification and are more likely to recommend brands that provide simple experiences and communications. In addition, 81 percent of executives also believe simplification is important, and 88 percent admit IT investment is essential to achieve simplification.
This simplification cannot occur without a strong digital platform. Markus Schwarz contends with this issue in his article “Your Journey to a Digital Core.” “With a digital core,” he writes, “businesses understand the myriad bits of information that flow in and out of the company.”
Schwarz goes on to explain how companies can digitize their critical business processes, using a digital core to interconnect all aspects of the value chain in real-time. “This includes workforce engagement, assets and the Internet of Things, supplier collaboration and business networks, and customer engagement, and the omnichannel commerce experience,” he explains. “The digital core empowers your decision-making, and gives you a significant advantage in today’s digital economy.”
With the ability to process vast amounts of information while simplifying data organization and analytics, the digital core becomes a flexible real-time innovation platform that will enable retailers to deliver on the five key promises of digitization:
- Provide a streamlined customer experience across all consumer touch points
- Facilitate supplier collaboration across all spend categories (merchandise, services, and travel/expense)
- Drive all core business processes from manufacturing and supply chain planning to merchandise and finance
- Coordinate workforce engagement among senior management, store associates, and seasonal staff
- Manage company assets by using the Internet of Things (IoT) to keep track of inventory, drive real-time insights, and create new business models
Very simply, the core of retail is complex, but digital technology can simplify the core and integrate retail from the inside out.