A Request To Define ‘Digital Transformation’ Kicks Off A Whole New Journey
A friend sent me a note this week asking for my definition of “digital transformation. ” It’s actually not as easy to answer as I thought. At least for me, the answer does not roll easily off the tongue. I’m not going to steal his thunder, as this friend, Bob Amster, is preparing a blog post on the topic, but it did bring some important thoughts to mind.
The consumerization of IT has brought tremendous change to our industry. So has the improvement of technologies available to support running the retail enterprise. These changes are dramatic, and our reliance on computerized tools and techniques is an even bigger change, in many ways, than the shift of production from local sources to countries half-way round the world.
We know you look to us, the analyst community, and RSR in particular, to articulate the value of new technologies for retailers. That is, of course, our unique commitment to you: to put technologies in context and to separate the wheat from the chaff.
And so, we would be remiss if we did not remind everyone (including you tech vendors out there), of the basics of retail.
When an Amazon seller who is ostensibly “Prime ” sends me a box of paper towels sealed with “Target ” tape, and sends it four days late to boot (yes, this really happened), it reminds me just what a commodity paper towels are. When Instacart delivers an ugly looking, too-small head of cauliflower, it reminds me why I enjoy physical grocery shopping.
This is what I call “unfortunate retailing. ” Paper towels are paper towels. But I needed them quickly, and for whatever reason, didn’t think I could get to the store in time. In the end, because the shipment was late, I had to go get them anyway. And separately, I also realized again that not all cauliflower is the same.
This stuff matters.
Late last year, JDA commissioned a study on Retail Disruptors with us. The resulting report is a fascinating read, and I recommend you give it a look here. When we looked at the respondents that self-identified as disruptors, two key differentiators emerged: “We provide the highest quality product and services ” was identified as a top-three disruption identified by 53% of respondents and “We are many times faster and more responsive than traditional retailers ” was cited by 51%
I love this. Why? Because it shows the intersection of sound retailing practices and the use of technology to support those practices. As we said in the report, Retail Disruptors are aspirational Retail Winners – which is to say disruption is the first step in a process that leads to consistent growth, or becoming as RSR calls it, a Retail Winner. Regardless of their ultimate success, there is a lot to learn from these disruptors, just as there is a lot to learn from long-term Retail Winners.
We can guide you towards technologies that will help you become faster and responsive. That’s what you expect from us. But we have no way to save you from unfortunate product selection. We can tell you that digital transformation means you can no longer succeed by running technologies that are old enough to vote, but we can’t convince you that quality control is important. Because we’ve “been around ” and seen a lot of change, and gather boatloads of data, we believe we’ve gained the right to make these calls.
Yes, it’s time to freshen up those technology portfolios. That’s a big part of “digital transformation. ” Yes, location analytics are something you should be using as a matter of course. No, you can’t use a merchandise operations system (what some [erroneously] call ERP’s) that was designed for store-based retailing in the age of Omnichannel retailing. No, self-service is not a proxy for customer service. But if you’re going to have employees in your stores, you really do have to train and guide them.
Still, it is always important to keep control of your product quality and service delivery. Do I care, ultimately, that a product I bought from Amazon had Target tape on it? Not particularly. I did care that it was 5 days late. Did I care that the cauliflower I was going to use for a meal-for-four was only good for a meal-for one? You bet I did. Did both warn me off future purchases from those retailers? Actually, the answer is “yes. “
The long and the short of it is that this is RSR’s continued commitment to you: we will deliver information on technology in context. It’s our passion. And sometimes that will involve some “finger-wagging. ” Most often it will involve a lot of cheer leading. There’s a method behind our madness.
This is our industry. We want YOU to succeed.