As digital transformation takes over the world, retailers everywhere need to change to survive, developing new capabilities that can drive competitiveness and growth. But what does this really involve and how do you succeed? In this paper, we discuss the opportunities for the retail industry to grow, adapt and evolve to address the changing needs of customers and capture new business potential, and how Microsoft can help accelerate digital transformation.
A rapidly changing landscape
Customer satisfaction and operational excellence have long been the outcomes that retailers seek to achieve. And while these priorities haven’t changed, the means to attain them is changing significantly.
In today’s digital world, disruptive technological innovations and other market forces—the empowered consumer, fierce global competition for share of wallet, merchandising and inventory changes, rapid shifts in workforce demographics and new modes of work—have catapulted the retail industry into a new era, where the standard of superior customer engagement and business performance has shifted.
With technological advancements like the Internet of Things (IoT), the cloud, and advanced analytics now being part of every discussion we have with our global retail customers, we look at what’s really changed, and how organizations can best take advantage.
Transforming your business
For the first time in decades, technology has outpaced the evolution of business processes. Increasing volumes of data, advancements in data analytics and intelligence, and the ubiquity of cloud computing have shifted both what customers expect as the result of being armed with information in a way not previously possible, as well as what companies can deliver to meet those expectations and reinvent the value they offer.
As retailers navigate these new consumer expectations, what worked in the past in terms of increasing margins and creating customer loyalty isn’t going to mean success in the future. It’s not enough to just digitize paper-based processes and stich together solutions that cover the seams between the digital and physical. To stay relevant and compete in this evolving industry, retailers will need to re-imagine their customer experiences and business processes from the ground up.
We call this digital transformation—implementing technology in new ways as well as cultural changes that help improve customer engagement, empower employees, optimize operations and transform products, and ultimately drive growth and opportunities for the business.
To succeed, this includes rethinking how your organization operates and how it generates value, starting with the shopping journey and how you interact with your customers. It also means transforming your business processes with systems of intelligence that draw better insights out of data to inform more intelligent actions.
It’s also important to remember it isn’t simply about technology. Systems of intelligence represent the technology, process, and people that define an organization’s competitiveness and ability to change the entire industry landscape. This involves giving employees the flexibility and tools they need to easily collaborate with colleagues, partners, and customers around the world.