4 Ways Retailers Can Heighten Digital Transformation
Digital transformation is sweeping the retail industry. As such, it's time for retailers to brush up on how to turn this evolution into a competitive advantage. While most of today’s consumers seek a digital experience, many retail leaders lag behind, instead proffering traditional market tactics that work, but don’t help the business excel.
How can retailers take advantage of the opportunities that digital affords? To begin, focus transformational efforts on a few key departments that have the power to drive the business forward through bottom line impact:
Procurement has taken on a key role as a critical business function in many retail organizations, and its digital potential cannot be ignored. Unfortunately, that’s exactly what too many businesses are doing. A new research paper by Harvard Business Review Analytics Services (HBR) in partnership with Scout RFP found that just 60 percent of businesses use digital technology for internally facing operational activities, including sourcing and procurement. The many businesses that aren’t taking advantage of this digital opportunity are also depriving themselves of strategic sourcing’s potential to drive 400 percent return on investment.
More and more leading retailers recognize the value that procurement can bring to business efficiency and how that in turn directly impacts bottom line. Levi Strauss & Co., for instance, recently “invested substantial resources in its sourcing function as part of an overall effort to streamline the business and improve performance.” The efforts paid off. According to the company, “sourcing teams are now in high demand,” according to the HBR research paper.
It takes approximately six touchpoints for the average consumer to commit to buying an item. Without a digitized marketing strategy, however, it’s nearly impossible to effectively deliver those touchpoints. Automated marketing technology can assist retailers in the move to digital with solutions like dynamic email campaigns and beacon technology. As an added bonus, these new methods of reaching customers help ensure that touchpoints are personalized and impactful every time.
Beacon technology has supported huge retailers like Target, CVS and Macy’s through targeted marketing tactics like push alerts and in-app updates. These types of promotions can have a big impact on the customer buying cycle. In fact, 73 percent of consumers who receive beacon-triggered offers say it raises their likelihood of making a purchase, according to a recent study by Swirl.
Behaviors like webrooming and showrooming — the acts of either researching online and buying in-store or vice versa — have truly changed the needs of retail IT. App development platforms fill the need for an effective online presence that gives customers the streamlined and cohesive buying experience that they desire.
The impact of app development doesn’t stop at customer-facing apps. For example, Brooks Brothers updated internal processes via a no-code app development platform to cut down on the time it takes to get from a customer appointment to a delivered product. By setting up appointments with customers and transmitting orders from sales associates directly to the factory, the custom app has streamlined the clothing retailer’s sales process.
4. Customer Service
Perhaps more than in any other industry, customer service is a critical business function for retail. The introduction of artificial intelligence, through technology like customer service chatbots, takes the customer service experience to a whole new level. Not only do these bots provide timely, automated responses to customer inquiries, but they also give customers a more personalized experience through recommendations and special offers tailored directly to the individual. Retailers are picking up on the importance of a digitally transformed customer service experience, with a survey from Boston Retail Partners (BRP) finding that 55 percent of retailers say their top priority is optimizing the customer experience, while 24 percent say they want to personalize recommendations, promotions and offerings.
Many retailers have fallen behind — or closed their doors entirely — because they failed to adapt their businesses for the digital curve. On the flip side, those that have stayed ahead of the proverbial curve have enjoyed improved profits, happier customers and better business outcomes. Retailers beginning their own digital transformation should remember that it begins from within, and seeing how technologies can transform key departments such as procurement, marketing, IT and customer service is a great place to start.
Stan Garber is the president at Scout RFP, a sourcing and procurement solutions provider.
Stan Garber is Vice President at Scout RFP, a Workday company. As vice president, Stan sets the marketing and growth strategy. He previously was a co-founder in ONOSYS which was acquired by livingsocial in 2012. At ONOSYS, he led the business development and financial functions. Prior to this, he went to Case Western Reserve University where he studied Finance and Management. Outside of work, you can find Stan cooking, running, and traveling, plus being thankful he didn’t become an investment banker.