Designing Digital Retail (Part 8): 8 Recommendations for successful Digital Transformation in Retail
How can traditional retail organisations become mature digital organisations? The following recommendations emerged from a study of UK legacy retailers who are currently going through digital transformation. These findings can be applied to almost all organisations competing on customer experience and managing the transition from old legacy systems.
Articles covering various subjects related to this study can be found here.
Info about the Digital Mission Canvases (a tool for orchestrating product development at scale) can be found here
1. Create a digital strategy and give the organisation a purpose
In order to create direction and alignment among digital teams, leadership should create a strategy and a vision, and help each product team to help understand how they are contributing to a larger organisational goal. This digital strategy must be aligned with the larger goals of the organisation to enable continuity with other departments and functions. The strategy must recognise and seek to optimise current assets and move towards a realistic goal. Strategy and vision should not be created purely by the business, but must involve technologists and designers.
2. Integrate data sources and use this to steer the organisation
There are vast quantities of customer data being generated by a modern retailer at every second of the day. However, much of this is either being lost or stays trapped in siloed databases. The organisation must learn to bring together all the data of the business using data analysis teams, and to use qualitative methods to bring meaning and useful interpretation. This will enable the business — and the separate product teams — to orient towards objective, measurable, customer-focused outcomes.
3. Develop insight capabilities fit for the digital age
To develop insight capabilities for the digital age, retailers must enhance their ability to truly understand the customer. It is no longer sufficient to make decisions based on purely statistical data. Digital teams need to develop empathic methods to get inside the heads of customers, to understand behaviours, goals, motivations and pains. These will drive product decisions towards customer-centricity. The organisation must also be able to step back and look at larger market and social trends to inform decisions. As they move towards becoming omnichannel retailers, organisations must learn how measure and evaluate success of channel integration from the customer perspective.
4. Deliver customer value, not features or functionality
Retailers must move from a simple ‘we sell products’ mentality, to an understanding that in the minds of their customers, they are means to a goal, a tool to achieve a mission or fulfill a purpose. Therefore all digital product design decisions should seek to enable goals and remove impediments. Success is largely defined by the value that the customer gives to their experience of interacting with the retailer. Therefore success of digital channels should be evaluated on this basis. As they move towards becoming omnichannel, organisations must learn how to deliver this value to the customer across all their channels. Part of this involves understanding how their physical stores integrate with digital experiences.
5. Structure the organisation to enhance orchestration
Leadership should ensure that equivalence between product, design and technology runs from the bottom to the top of the organisation. This will ensure that decision-making and activities find a balance of business value, customer value and technology feasibility. This includes equivalence in product teams between design, technology and product, and equivalence at higher levels of the organisation, including Head of Product, Head of Design and Head of Technology. In order to enhance orchestration of digital activities, emphasis should be put on encouraging within-discipline culture and communication to break the product silos.
6. Find your balance between long-term technology success and short-term value
The organisation should choose wisely between fast product delivery or a great underlying technology platform. Ideally, the long-term value of having a strong underlying technology infrastructure should be prioritised, to enable integration of all applications and services. A microservices approach to technology should be taken to enable continual Lean evolution of the digital estate. As legacy systems are updated, the organisation should take the opportunity to redesign operational processes, using strategic design methods to broker communications, and to explore and test new ideas. DevOps approaches should be used to integrate I.T. operations with development activities.
7. Elevate design in the organisation to a strategic level
Design should be elevated from being a delivery function to take a central role in digital strategy. When making product strategy decisions, viability should be led by the business, feasibility led by technology and desirability led by design. Design Thinking should be used to explore and reframe problems and pass through a user-centered design process. Designers should help the business to illustrate vision and strategy using prototyping and mock-ups with can be socialised through the business.
8. Use design to communicate and align
Design-thinking workshops and methodologies should be used to facilitate communication between stakeholders. This is particularly useful when gathering requirements for new operations technology. Design-Thinking methods should be used to explore how technology can improve operational efficiency, with designers working with business analysts, engineers, and business users to create alignment and design new processes.
The recommendations above provide a picture of an organisation that is on the way to becoming a technology-mature customer-focused organisation that maximises both human values and business values through the use of technologies and physical spaces. Such an organisation combines business, customer-focused design and technological expertise at every level, including at the Board level. Such an organisation understands that success at every level should be measured by a combination of business metrics, customer value metrics and technological performance. Such an organisation understands that these metrics should be defined at a strategic level, and that every product division (or product family), and every individual product should articulate these metrics at a more granular level. Every team, every department and division should constantly be receiving data signals and insights to provide feedback about whether what they are doing is contributing to success, as measured by these metrics. At every level of this organisation, teams use hypothesis-driven approaches to progress, by constantly measuring the effects of changes on a set of established metrics. This ensures that the company as whole is moving consistently towards increased profit, customer delight, and technological evolution.
These recommendations emerged from a study of UK legacy retailers who are currently going through digital transformation. Articles covering various subjects related to this study can be found here.
