Retailers failing to engage in digital transformation won’t be operating by 2024, according to ninety percent of senior decision makers within the retail industry. In fact, a quarter believe that retailers steadfastly clinging to more traditional ways of doing business won’t exist three years from now.
The research, published by Hitachi Consulting, revealed that despite the importance of retailers modernising and future-proofing their operations, less than half (45%) have passed the midpoint on their digital transformation journey – and only 1% consider themselves to be where they want to be.
A lack of internal strategy (29%), management buy-in (19%), and knowledge (29%) are the biggest barriers to digital transformation, according to three-quarters of respondents asked to consider their own operations. Concerns over these barriers led a quarter of respondents to state they were “scared” to digitally transform, citing a lack of understanding around how best to begin transformational projects, coupled with a heightened fear of risk.
“More and more retailers are experimenting with innovative technology. But as the research shows, it’s a small minority that are at the more advanced stages of the digital transformation journey, and the majority are therefore missing out on many of the benefits, such as improved cost control and profitability,” said Pierson Broome, Retail specialist at Hitachi Consulting.
“However, it’s not all doom and gloom. 99% of retailers are now tackling digital transformation – even if some aren’t far along their journey, that’s significant progress compared with a few years ago. Now their focus needs to be on implementing a full and clear digital transformation strategy, guided by the knowledge and experience of experts and backed by senior management, to provide a solid foundation for remaining at the cutting edge of retail IT systems. This will give them the best shot at not only surviving to 2024, but thriving."
Respondents also highlighted that an omnichannel strategy is critical. 70% agree that it is critical to the high street surviving and 82% already closely link their omnichannel strategy to their brand values.
“Today’s shoppers expect a seamless shopping experience regardless of whether it’s online or offline. They don’t think about the channel they use, they simply want to purchase. This shift in attitude and growth in cross-channel purchasing by the digital native generation demands a seamless shopping experience. To do this, retail IT must be aligned with sales operations,” concluded Broome.
About Hitachi Consulting
Hitachi Consulting is the digital solutions and professional services organization within Hitachi Ltd., a global technology and social innovation leader. Hitachi Consulting is a catalyst for positive business change, propelling organizations to drive disruptive innovation and to accelerate digital transformation. We help organizations leverage data as a strategic asset to innovate faster, develop new revenue streams, and respond to global dynamics with insight and agility. We collaborate with clients to create solutions that help maximize operational efficiency and deliver measurable, sustainable business results. Visit us at www.hitachiconsulting.com.
About Hitachi, Ltd
Hitachi, Ltd. (TSE: 6501), headquartered in Tokyo, Japan, delivers innovations that answer society’s challenges with our talented team and proven experience in global markets. The company’s consolidated revenues for fiscal 2016 (ended March 31, 2017) totalled 10,034 billion yen ($89.3 billion). Hitachi is focusing more than ever on the Social Innovation Business, which includes power & infrastructure systems, information & telecommunication systems, construction machinery, high functional materials & components, automotive systems, healthcare and others. For more information on Hitachi, please visit the company's website at http://www.hitachi.com.