Digitalisation

Why retail is struggling with digital transformation

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Transforming retail

Despite expressing a willingness to go digital and understanding the benefits of doing so, nine in ten retail organisations (91%) are facing significant challenges in making it happen, according to Bizagi’s latest global research ‘The Agility Trap Report.’

The pressure to keep up with the sheer pace of digital change is not helping organisations. Even those retail businesses that haven’t yet started on the road to digital transformation are preparing to put their foot on the accelerator, so enterprises that fail to act, or act fast enough, will be displaced by more innovative competitors.

Bizagi found that while just over one third of retail companies worldwide (37%) currently have a high level of live transformation projects on the go, over half (51%) claim they’re working on a ‘moderate’ level of live transformation projects. In addition, 40% of retail respondents have significant plans to develop digital projects in the future.

What exactly is holding retailers back?

Retail companies all over the world are working hard to keep up with their industry peers, but most are finding major obstacles when it comes to user adoption and system complexity. The challenges are widespread, with almost two thirds of retail enterprises stating that systems are simply too complex to implement or manage.

Retailers are acutely aware that digital transformation needs to happen fast in order to avoid commercial failure, and the vast majority are feeling the pressure of digital change due to their self-confessed lack of agility. The industry risks damaging future business progress by continuing to suffer digital transformation projects that take too long to implement and don’t meet overall user expectations. To gain a competitive operational advantage, retailers need to realise that the technological environment affected by transformation impacts the performance of multiple areas of the business.

A digital mindset for retail

Despite these common pains of transformation, its necessity is doubted by no one. The world of retail management really is changing as businesses, industries and customers reinvent the way they work.

With multiple moving parts and highly complex, regulated processes, enterprises dealing in consumer goods require the agility to progress and follow-up customer relations issues within set timeframes, and in-line with tight procedures. For digital transformation to have impact in the retail sector, the customer must be at the centre of their thinking.

For example, one of the world’s most recognised sportswear retailer brands installed an exemplary business process management system project to streamline and trim off inefficiencies. Bizagi initiated a Supply Chain Management project that connected 500 sales operations with over 400 factories to streamline 5,000 purchase order changes per month. This improved operational efficiency by 60%, and a reduced vendor on-boarding time by 50%.

In order for a digitally transformative project to positively impact business agility, not impinge too greatly on the day-to-day, and improve customer experience two things need to marry up. The project driver’s digital mind-set must be paired with a company-wide cultural ethos of innovation. The combination will enable retail businesses to build out digital processes that are stronger than the resistance to change and the most common barriers to success.

By Gustavo Gomez, CEO, Bizagi