Digitization in retail
Not all digitization projects in retail outlets are successful. These seven lessons learned are valuable for retailers who engage in digital transformation.
It’s not easy for traditional retailers. That conclusion does not require official investigation: a glance at the many vacant shops in city centers is the indisputable evidence. Digitization is an important factor for retailers to win over the market. But who doesn’t play the game is losing from their competitors.
Experimenting is allowed, but there must be a proper reason to do so
The traditional waterfall model has had its best time in the digital economy. Retail organizations must continuously look for the golden egg. It is better to have one hundred ideas where eventually three turn out to be useful, than one idea that dies off after a year.
This requires a culture in which employees can show their creativity, but where the management also has a tolerant attitude towards mistakes and failures. It would rather take place before major investments take place. An experimental corporate culture, however, is definitely not the same as a laisser-faire culture in which an unrestrained freedom feeling is taking over. Experiments also benefit from tight KPIs and clear objectives.
Innovations require a horizontal approach
Digitization paths cannot be initiated and directed from above only. Such projects benefit from a steering group of employees from all walks of life and departments of the organization. The word digitization does not have to be included in their job description. It is much more about the right mix between technology, marketing, sales, interaction, design and especially a great deal of creativity and cognitive flexibility. Those who really want to excite with the creative ideas that can come out of it always keep the business KPI’s in mind.
Silos are the death stitch for success
Digitization in retail is potentially a blessing for the customer experience. Retailers can tailor customer tastes much better than in the analogue era. Big data analytics outlines a extended view into the person behind the customer.
These systems feed on all sorts of data. For example, about previous purchases, preferences, habits and contact moments. There is a danger that those data will be “hidden” in a variety of different systems that do not communicate or communicate badly.
For example, many retailers have not integrated their systems for physical stores and online shops. As a result, they do not have a full picture of the customer, and the customer interacts with silos. The customer has nothing to do with these technical islets and just wants an optimal shopping experience. This can only be done in an environment where all customer data is centralized.
Think beyond online shopping
Digitization in retail is no longer about online shopping alone. We have been far beyond this stage. Digitization has its impact on the entire customer experience, whether the customer is shopping in a physical property, online shop, interacts with the brand via social media or uses an app. Borders between these ‘worlds’ also fade away. This way you will see more and more physical stores that provide access to online services through large touch screens.
Marketing is an important focus area of digitization in retail. Not so strange: modern technology makes it possible to map out the individual customer needs, but also to anticipate on it as well as possible. That varies from an effective online re-targeting campaign to sending a personalized offer for his or her favorite brand jeans when a customer passes your showcase.
Virtual reality: Not just a boost for customer satisfaction
Retailers are now experimenting with virtual reality for setting up a unique customer experience. IKEA’s furniture store has launched a pilot in which customers can ‘experience’ kitchens through VR, simply from their couch at home. They can personalize the kitchen virtually and immediately see the effect of their adjustments.
But it is often forgotten that not only the customer but also the retailer himself can benefit from this technology. For example, there are VR solutions for retailers where shop owners can walk through their own virtual store. In the virtual world, they can experiment with, for example, display setups, new packaging designs or stakeholders, and stakeholders such as category managers and suppliers in the virtual world.
It’s never just about technology, but about the concept
Many digitization projects fail because the organization has taken technology as a starting point. Technology is never a goal in itself. Who begins with the needs of the customer and the business has a much better basis than when that new version of that big data platform or the latest wireless technology was used as a trigger.
The customer deserves a central role in digitization projects
In many digitization programs, the customer is a kind of ‘terminal’. The eventually developed service benefits him or her. But whoever really wants to distinguish themselves, is already including the customer in digitization during the development process. For example, by testing with a selective group and actively seeking feedback. In this way, the manufacturer benefits from the creativity and wisdom of its client base and better match the end product to the target audience.