Digital Transformation in Retail

Most of you have heard about Digital Transformation in one form or another.?Tied to this is that most of these transformations fail (north of 65%) — leaving you wondering, “Why?”.?This is one of my favorite questions when solving problems - “Why?”?At the end of this article, I want you to walk away with a “How?” or at least the basics on where to start.?

Digital transformation will continue to appear across all industries for the foreseeable future.??I struggle with why it ends up being more complicated than it should be.?As a former consultant, one of the areas I focused on was business transformation and modernization.?

Why Digital Transformation?

In retail, your consumer (whether business-2-business or business-2-consumer) may abandon you for businesses that are easier to deal with today.?"Deal with" can mean find, purchase, return, exchange, and customer support - essentially interacting with your brand.

How do you digitally transform your business??Start with the areas of highest friction for the consumer — your consumer can be the person in your stores utilizing your product or service or the employees helping support them. It should never be difficult for your consumer to interact with you or have employees support them - ultimately leading to a loss in revenue and brand affinity.

Retail Transformation does not need to be complex.?Once you finish reading this, I hope you understand why you need to start your own transformation (if you have not already started) and how to do it or where to start.

As a retailer, you may interact with your customers through multiple channels, so figuring out where to start may be daunting.?Digital transformation for retailers has been focused on eCommerce for the better part of the last 20 years (even longer if you presume this started in the mid-late 90s). During this time, brands modernized their eCommerce or online experiences, and few invested the equivalent energy in physical retail (if applicable) or back-office operations.?

The Digital Thread

I have used the term “digital thread" to help visualize the scope of transformations - it touches everything from externally facing consumers to everyone supporting them. A good place to start is with the following questions -?

1. Are there low-hanging fruit to enhance your customer experiences (in any of your channels)??
2. Do your employees struggle to service your customers?? Whether that’s trying to help them find, return, or exchange things.
3. Are your customers frustrated with the type of experience you are offering them?

If you don’t know the answer to these questions - you don’t need to hire a major consulting firm to solve this.?You can ask your customer by spending a few days in the channels you are trying to solve for.?

• For physical retail - spend 1-2 days in various stores and talk to your customers.?
• If it is your support staff, spend a day in your office and talk to front-line workers (management input is valuable, but front-line worker input is priceless).?

If the answer to the above questions is a?Yes (or a maybe), it is highly likely there is an opportunity to create additional revenue, optimize costs, or both.??If you feel you are not losing revenue, gaining brand stickiness, or have optimized your business to the point where operational improvements are small in nature and have little impact on EBITDA or the brand, there is no need to move forward.?However, I have seldom found examples of this in all my years.?

Where to Start?

Before I focus on where to start - my disclosure: I work for a Modern Point of Sale company.?That is not why I am writing this article.?I am also a CIO who has helped multiple brands undergo major digital transformations. As I hear podcasts, articles, and books on how to approach this - they are difficult, cumbersome, or leave you with ambiguous paths on where and how to start.?I wanted to bring some of the approaches and thought processes I have used in various verticals at organizations that were at different points of their growth journey.

As a retailer, if you have invested in your Point of Sale (POS) in the last five years, there may be other places to look at for transformation - enhancing the in-store experience or enhancing the employee experience to better the consumer experience.?If you are interested in these areas, feel free to connect with me directly for some thought starters.

For everyone else, the POS is a great place to start. Traditional POS may be able to do things modern POS systems can. However, they come with either complexity in design, a hefty price tag, a large team to support, or a combination of all these items.

If you are running a POS system from a company where it's part of a monolithic solution, it's the same as buying tires from a general department store - you will get a tire, however, it's not going to change your life or your passengers life.

If you have multiple systems that depend on the POS, either push data to the POS or take data from it, this may become a barrier to modernizing your in-store experience.?Changing enterprise systems can be complex whether you are a private or public company.?Before you start to boil the ocean, there are a few things to consider -?

1. Modern POS systems make it easy to integrate with your existing landscape - regardless of how old it is?
2. Modern POS systems can be implemented in as little as 2-3 months (I have done this myself)?
3. The cost-benefit of trying to augment a legacy system to meet modern customer needs will become a losing battle.?

Raising the Bar

When visiting a physical retail store, I want you to put yourself in your customer's shoes and think about the following.

• Search for an item that may not be available in the current store, but the store associate does not have any means to look up inventory across other channels or nearby stores.
• You want to buy a few things but only have two hands, so you want to take the item you love the most now and have other items shipped to your home, office, etc., but they are unable to do this or ask you to shop online for the things you want to be shipped to you.
• You bought something online, it's the wrong size/color, and now you want to return it to a nearby store and swap it for the one you want, only for the store associate to tell you they don't do online returns or exchanges.?
• You are only able to call customer service during business hours, with no other current means (i.e., instant messaging, chat) to help with your order or question.
• The store you are visiting is extremely busy, and you want to buy something only this store has but cannot wait.?

These are all friction scenarios if you have experienced this or any other scenario.?Making it difficult for a consumer to engage with your brand. You can ignore this, and ultimately, your consumer will ignore your brand.?This type of attrition does not happen overnight; it does happen.?

In Conclusion

My sense of humor may not be perceived by all - for me, complex integrations are heart transplants, where a team is tasked with swapping out the core operating system in a human being (I was supposed to become a neurosurgeon), or designing a defense system to stop a meteor from striking Earth; in these scenarios accuracy and error tolerance is low.?

Digital Transformations do not have to be costly, complex or time consuming.?

You can make mistakes in Digital Transformations and create a framework where you can quickly address those mistakes.

You exist in business to meet your consumer's needs- whether in a B2B or B2C world.?Why create excuses for them to love your brand??Why create friction for your employees to take care of them??You don't need a Chief Transformation Officer or Chief Digital Officer to start your journey - start with what you want as a consumer and go from there.

If you have questions or want to run ideas - please feel free to reach out.?I am happy to help (this is not a sales pitch); I enjoy seeing amazing customer experiences.?It helps me appreciate that technology is actually helping us move forward.

Also, I created a process in 2016 that shows you how to select vendors rapidly - ironically, this example was around selecting a Point of Sale. Link is here -?https://www.slideshare.net/jacobxp1/rapid-vendor-evaluation.

Happy Transforming!