Author: Matt Sherwen, Owner, Sherwen Studios
Too many digital transformations are failing to deliver the impact that they promise. This could be down to poor strategy and a lack of understanding of how a digital transformation should be integrated into your wider business growth plan.
Right now, transformation remains the biggest buzzword in the digital sector. Retailers are scrambling to adapt to the latest technical advances and are leaping into transformation projects, knowing that they need a new, improved platform for long-term, sustained growth.
However, there is a risk that too many businesses are investing in the wrong technical solutions because they aren’t fully aware of what they need their technology to do to enable them to meet their long-term business objectives. As a result, those retailers are investing their transformation budgets in the wrong places, causing projects to overrun on time and budget, resulting in poor performance and negative ROIs.Â
Getting to market successfully requires a tech stack and skills gap audit
The retail sector is in the middle of significant turbulence. The complexities of dealing with online and offline shopping habits, responding to social commerce opportunities and adapting to changing consumer behaviours while also coping with political and societal influences mean that there is a lot for retail brands to deal with.
With ever-decreasing profit margins, retailers are under considerable pressure to invest in digital platforms that need to simultaneously increase revenue while also improving the overall customer experience, providing a stronger brand image and decreasing operational costs.
The key to improving efficiency and meeting pre-defined KPIs and objectives is for retail brands to take a step back and examine their current technical foundations before delving into any specific transformation. Every digital transformation project should begin with a thorough audit, not just of the technical capabilities and limitations of the current platform, but also to establish any particular skills gap within internal teams.
Too often, retail digital transformations fail because businesses do not have the right resources in place to facilitate their project. As part of the planning process, it’s essential to look beyond what technology is needed to identify how strategic decisions will be made, how to prevent data analysis overload and how to ensure that customer experiences are placed at the forefront of any decision-making.
This gap analysis will define what specific processes will be needed to get any project to market on time and within budget.
Short-term and mid-term goals are just as important as long-term planning
Successful project teams know that they need to work collaboratively to identify the primary business goals along with potential new opportunities.
An initial technical foundation review is the opportunity for retailers to examine where they can improve their tech stack, how to improve the customer experience, and how to simplify operations across the supply chain. While long-term and sustainable business growth needs to be kept in mind, digital transformation projects also need to consider short- and mid-term goals that can lead to improved deliverables along the way.
Too often, go-live dates are postponed because one area in the long-term plans may be behind schedule. Instead, transformation projects should be flexible, with quick wins identified so financial and operational advantages can be found while longer-term strategic work takes place. For example, if a retailer’s goal is to improve revenue, then prioritising better customer experiences and focusing on implementing frictionless checkouts within the confines of an existing platform should be the first step, while time is spent elsewhere researching whether a platform re-tune or platform migration is required.
The right technology isn’t always what you expect it to be
For digital transformations to succeed, retailers need to be open to new ideas and seek independent advice and expertise to establish what they truly need to meet their business objectives, rather than what they think they need.
Smaller retail brands may be tempted to invest in the same off-the-shelf, all-in-one solutions as their competitors, but this could result in paying for features that are unneeded and unused or duplication of features that exist elsewhere within their technical infrastructure. Customised solutions such as headless or composable commerce are becoming far more cost-effective for retailers who can personalise their systems to their exact needs.
These systems offer far more flexibility and scope for retailers, ensuring that budgets are being spent in the right place on the right tools and software solutions. Rather than being forced to compromise and ‘make-do’ with systems that aren’t quite right, investing in a custom system will allow retailers far more opportunities to deliver much better customer experiences to all users. The flexibility of these composable systems ensures that there is far greater scope for long-term innovation and adaptation.
The roadmap for continued success doesn’t have a specific destination
Retailers are learning that digital transformation projects shouldn’t be seen as a one-time investment. Digital platforms need maintenance and agility to successfully respond to changing customer behaviours, drive revenue and improve ongoing efficiencies.
Therefore, any roadmap for a project should not end with the installation of a new platform.
Instead, it should be seen as the start of your next phase, where it becomes easier to implement additional software solutions and plugins that continue to deliver better performance. At this stage, retailers may start looking at how they can mitigate risks, optimise user experiences or integrate AI solutions to drive efficiencies and tangible business improvements further.
One-time investments will quickly result in outdated tech that needs replacing within a few years. In contrast, a continual investment into digital capabilities will naturally deliver better ROIs for retailers because they will have far greater flexibility to adapt and change as technology and customer behaviours evolve.
A continual investment plan will prevent any technical debt from building up, limit the risks of working from a legacy system, and provide strong foundations for long-term, sustained growth.
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