Digital Transformation Top Investment Priority for Retail CEOs, Survey Finds
A survey of more than 350 global retail CEOs found that a digital transformation strategy is their No. 1 priority in 2017; 69 percent said they plan to increase their investment in digital transformation over the next year.
These findings were highlighted in a new report, CEO Viewpoint 2017: The Transformation of Retail, prepared for JDA Software Group, Inc., by PwC. The report found that despite the obvious importance of having a digital transformation strategy in place, more than half of respondents — 52 percent — haven't defined or started implementing a digital transformation strategy. Globally, Chinese retailers are more likely to be implementing their defined digital transformation strategy (58 percent) than retailers in the U.S. (40 percent), with 19 percent of U.S. retailers struggling to or choosing not to define this strategy at all.
Mobile-enabled applications (85 percent), big data (86 percent) and use of social media data (85 percent) are the top technologies survey respondents are investing in, or plan to invest in, over the next 12 months. Automation and IoT are lower on the list for investment but gaining momentum as they're perceived as true game changers.
The survey also found that profitability around omnichannel execution is still a challenge, with only 10 percent of those surveyed able to make a profit while fulfilling omnichannel demand. Twelve percent of CEOs surveyed provide a seamless shopping experience across channels, down from 19 percent in 2014. These retailers are finding their omnichannel offerings to be too complex or expensive and, as such, are choosing to scale back.
The survey also found that retail CEOs are increasing their investment in buy online, pick up in-store (BOPIS), with 51 percent saying they offer or plan to offer BOPIS in the next 12 months — up from 47 percent in 2016.
Buy online, ship to store has picked up steam in the past year with 48 percent of retail CEOs investing in this service or planning to in the next 12 months. Conversely, fulfillment options that are becoming costlier and less profitable are areas where CEOs are decreasing investments in 2017. These include same-day delivery (reduced to 33 percent, down from 43 percent in 2016), and providing specific delivery time slots (down to 27 percent vs. 48 percent in 2016).
Melissa Campanelli is Editor-in-Chief of Total Retail. She is an industry veteran, having covered all aspects of retail, tech, digital, e-commerce, and marketing over the past 20 years. Melissa is also the co-founder of the Women in Retail Leadership Circle.