Retail Apocalypse Explained: Retailers Have Not Actually Embraced Digital Transformation
“Digital transformation” has been on the lips of nearly every CEO at some point in the last ten years, and even more frequently in the last five. According to Forrester, 68% of global business leaders list digital transformation as a top priority for their business. Only 3% of retailers have actually completed a digital transformation project, according to a study by Oxford Economics. Digital transformation is becoming a higher priority for three big reasons. One, the consumerization of technology has changed the game for how technology is developed and deployed. When Facebook or Twitter rolls out a new user experience every month or every quarter, consumers expect the same thing from how they interact with retailers. Two, the speed of technology change has been unrelenting. Consumers carry around more technology in their pockets than most retail stores had to ring sales not that long ago – and those devices get more powerful every year. For an industry that hates change, especially when “cheaper/better/faster” is the ante to stay in the game rather than something that delivers direct top- or bottom-line benefits, then it’s hard to marshal the commitment to keep up. It’s especially difficult in an industry famous for its very tight profit margins. Three, rising consumer expectations have far outstripped retailers’ ability to keep up. When consumers expect you to engage with them on Facebook – except, wait, Facebook is passé. Now it’s all about Instagram, except that Snapchat is cooler. Until it isn’t, and we’re back to Instagram… For retailers who want their tech-enabled experiences to be “perfect” as soon as they hit the market, this whipsaw level of change – over a period of months instead of years – is exhausting. Retailers don’t want to let go of “perfect” – they find it incredibly difficult to be vulnerable with consumers in that way. But trying to keep up with how fast consumers move and also deliver a perfect customer experience are simply incompatible. Read more at Forbes.
