Digital transformation is here.  We hear a lot of buzz about this every single day. You hear that your organization has hired a consulting company to perform a gap analysis and the solution suggested is digital transformation. You also hear from your colleagues and bosses that your company is behind the curve and needs digital transformation. This term is now over used and has become a cliche. However, many are still wondering if someone can give them a 3 min simplistic overview as to why a company needs to transform digitally. If you have ever pondered on this thought as you are busy navigating your day to day life, you are at the right place!

In simple terms, digital transformation is being digitally capable of changing the way you do business. This change can yield a significantly higher return on investment.

Let’s examine the idea of digital transformation through the lens of retail. Retail businesses are selling goods to consumers. Retail, without driving down to specifics, is buying goods from suppliers at a low price and selling back to consumers at a higher price. In this process, you make your profit margins. Retailers also look at optimizing their processes- from the point goods are produced to how it gets to the shelf and then gets sold to customers. This all has been working well for a very long time. Now what has happened suddenly and why do you need to transform?

In the traditional retail world, the retailer’s focus has been product centric, meaning how do I make money by selling the product. But in the current environment, it is not just the lowest bidder the customer is looking for. The customers, like you and me, are also looking for the best value for money. A market for value based selling  still exists which is called a ‘customer centric model’. Instead of trying to attract customers with products and offers at a lower price, you focus on what brings the most value to the customer and provide them with a superior experience. You do your homework and figure out where your customers hang out and how they like to be engaged. You offer them the products they want in a channel convenient to them, regardless of whether they are in store or online. You provide them as many details as possible about the product to simplify their decision, make their check-out process seamless and amaze them with fast delivery and return policies. If possible, engage with them personally, understand their tastes and what they are looking for, talk to them and treat them in a way they like to be treated so you can build a loyal relationship. In digital marketing terms, you can call this ‘omni-channel enablement’ as the engagement with your customers is not tied to a specific channel, but based on their preferred mode of engagement.

So how do you provide an omni-channel personalized experience for your customers? This can be done only with the help of data. During the entire time your customers are interacting with the brand, -you have the opportunity to test and learn about them and gain insights from their interactions with your products and services. You can then take actions to provide them the best experience possible so they get the most value out of their time and money spent.

And how do you collect this vast amount of data so you constantly learn and improve the customer relationship? Only with the help of technology and so the term was coined “Digital Transformation”. You overhaul your infrastructure and build the right technical ecosystem so you can collect and process large amounts of data to support your customers in their journey. 

This is the simplest way to explain retail digital transformation. For any retail organization, to provide this superior experience to customers, there is significant work involved in other parts of the organization like inventory, supply chain, merchandising, product, store designs etc. It is only by setting up the right operating models and governance structures across the entire organization, you can drive and scale business transformation at its best. 

The retail digital transformation is here, are you ready?