Nine in ten believe retailers which fail to digitally transform will go out of business by 2024
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.