The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

What Does Digital Transformation Mean To Retailers, Anyhow?

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Compared to other industries, retailers are late to the digital transformation agenda. Yet they cannot take a time-out to perform a wall-to-wall redesign of their operations on either the selling side or the supply side of their businesses. So where should they start? Which business processes are the best candidates for digital transformation strategies?

These are the questions that the RSR team sought to answer when conducting its latest study, The Digital Transformation of the Retail Business Model, and the following are some of the highlights of what we found:

  • The top three investment priorities for retailers all relate to servicing consumers in the new digital+physical selling environment. This means that optimizing processes to better service consumers takes precedence over efforts to lower operating costs. While the two shouldn’t be mutually exclusive – with the explosive growth in omnichannel customer order fulfillment – they tend to be. This is entirely new ground for our industry.
  • At the same time, internal operational challenges are shifting from a focus on inventory accuracy and visibility toward consumer-related issues. This is significant, because just one year ago, retailers were most concerned about “real-time inventory accuracy”. Now, their top issue is “visibility into customer’s shopping behaviors”. This isn’t an RFID-issue, but rather about leveraging the digital signals generated by shoppers’ digital paths-to-purchase to understand and better serve them.
  • When it comes to the roadblocks standing in the way, too many projects have backed up, and retailers’ IT departments are at a breaking point. Retailers do not point to the cost of adoption – in fact, less than 1 in 5 points to cost. This is unprecedented; retailers know they can afford these technologies (the rapidly diminishing price of RFID technologies, in particular, has had enormous effect here) – they just don’t have the human capital to manage all of the things they would like to take on.
  • When asked to rank the necessity of a host of technologies that could go into a comprehensive digital transformation strategy, retailers see RFID to provide real-time insights as the lynchpin to everything else that they hope to do. They anticipate this intelligence will help improve decisions not only into the products they sell and how those products move throughout the supply chain (and when applicable, throughout the store), but also into how their operations and personnel could be used to better effect. IoT technologies like RFID are how they think this new story needs to start.

Based on our data, we also offer several in-depth and pragmatic suggestions on how retailers should proceed. These recommendations can be found in the Bootstrap Recommendations portion of the report, which, like everything we write, is free to the entire world here.

Newsletter Articles July 21, 2023
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