According to the IMRG Capgemini Sales Index, online sales accounted for 27% of UK retail sales in 2015. That’s £114bn.
But obviously digital provides more than just a sales channel.
With so many retailers going through a digital transformation programme, I wanted to try to cut through the jargon and define exactly what a digitally transformed retailer should look like.
I’ve compiled the following list of functionality, tactics and strategy as end goals for a digital transformation programme. Not every point will be relevant to every retailer.
And I certainly haven’t covered everything.
It’s a deliberately provocative (and nerve-wracking) exercise – if you disagree or think I’ve missed something completely obvious, please wade into the comments section below.
Having never worked back-of-house in a retailer, this list might be overly consumer focused.
The digitally transformed retailer?
- Allows customers who buy online to return in store.
- Provides a click-and-collect service.
- Offers e-receipts in store.
- Uses a virtual point-of-sale system.
- Can practice clientelling in store. Accessing customer history to allow enhanced service.
- Has a consolidated view of inventory across stores and warehouse. This means in-store stock can fulfill online orders.
- Attributes online sales to physical stores. This encourages store associates to promote a multichannel view.
- Has moved away from attributing profit & loss by channel. Recognises the effect online channels have on offline sales and vice versa.
- Offers flexible delivery options (same day, next day, named day, pickup point).
- Has a data-driven supply chain.
- Has a two-speed IT team capable of agile digital product design.
Customer service / marketing
- Reports on store visits from online activity – perhaps from PPC advertising.
- Offers ‘Omnichannel’ customer service. Orders can be amended online, via call centre or in store.
- Adopts a lifecycle marketing programme with relevant comms in multliple channels (SMS, email, direct mail, website, app). This includes marketing automation technology.
- Provides social customer service with resolution in channel.
- Employs an optimisation team to continually seek pain points in the multichannel customer journey.
- Uses advanced targeting of paid media – Custom Audiences, Customer Match, dynamic retargeting, Lookalike Audiences etc.
- Has a mobile optimised website.
- Has a mobile app (if appropriate for sector and size of retailer).
- Shopping basket is synced across website and app.
- Personalizes website based on location, demographic and order/promotion history.
- Is working towards a single customer view (uniting datasets as much as is possible).
- Produces compelling content including product video and shoppable editorial.
- Manages a bespoke online community, if appropriate (e.g. owned social networks for large retailers).
- Engenders a consistent customer experience across online channels.
Capability and maturity
I’ve tried to be specific with the features I have listed above. The aim is to start debate around what a digitally mature retailer looks like.
However, in more general terms, a capability and maturity framework can be used to define an optimised business (see below).
Markets are no longer insulated. Disruptive customer experiences in some sectors are putting pressure on those in other sectors.
That means the customer cry of “there has to be a better way!” is no longer hollow.
If you want more digital transformation case studies, subscribers can download Digital Transformation in the Retail Sector.
The video below provides a brief introduction to the report.