Compared to other industries, retailers are late to the digital transformation agenda. Yet they cannot take a time-out to perform a wall-to-wall redesign of their operations on either the selling side or the supply side of their businesses. Where should they start? And which business processes are the best candidates for digital transformation strategies?

These are the exact questions we hoped to answer when we conducted our recent benchmark study, The Digital Transformation Of The Retail Business Model, and one of the first things retailers told us is that they just have too much to triage: too many projects have backed up, and their IT departments are at a breaking point (Figure 1).

Figure 1: Something’s Gotta Give

Source: RSR Research, June 2023

This data is extremely informative. When given a list of 8 options and asked to choose just three, half of our 100 respondents immediately point to the lack of bandwidth at a personnel level. They do not point to the cost of adoption – in fact, less than one in five points to cost. This is unprecedented; retailers know the technology works, and based on the data in Figure 1, they aren’t even citing cost as the reason. They know they can afford these technologies (the rapidly diminishing price of RFID technologies, in particular, has had enormous effect here) – they just don’t have the human capital to manage all of the things they would like to take on. What, then, are they to do?

Time To Get Over It

The data in Figure 2 is as clear as it gets: the only way forward is through.

Figure 2: The Way Forward Is Through

Source: RSR Research, June 2023

At the outset of new waves of technological innovation, retailers often exhibit a “prove-it-to-me” mode of thinking. They ask for better case studies. They cite soft ROI projections. They want more proof from the vendor community that initiatives will live up to the promise.

This is not the case today.

Despite being presented with options such as “bring<ing> in outside expertise to help understand the value proposition” or better defined business cases and ROI calculations”, retailers’ top selection is to simply get on with it. Retailers recognize that ROI is not an applicable gating factor – that digital transformation is a critical strategic initiative. Retailers don’t have the choice to opt-out here. They have to act, and the good news is: they know it.

There’s a lot more to this story, and the full report has it all.