Digital transformation strategy a priority for retailers

Digital transformation has firmly taken hold in retail, with a huge number of global retail executives having a defined digital strategy in place, according to a recent report. Retailers are leveraging digital technologies to better understand and connect with their consumers, giving customers reason to engage with them across retail channels.

The Internet of Things (IoT), big data, robotics, and augmented reality are some of the ways CEOs reveal they are choosing to invest their capital in the coming year to better compete, says the 'CEO Viewpoint 2017: The Transformation of Retail' report by JDA Software Group, Inc. and PwC. About 69 per cent of the executives have said that they plan to increase their investment in digital transformation over the next year.

"The investment in technologies underscoring digital transformation was a major undercurrent within this year's survey results, which is no surprise, since retail CEOs understand just how important it is to invest in the technology that will improve the customer experience. The next wave of results also reveal the continued balancing act retailers are struggling to maintain with delivering superior omni-channel execution and profitability," said Lee Gill, group vice president, global retail strategy, JDA.

Retailers are leveraging digital technologies to better understand and connect with their consumers, giving customers reason to engage with them across retail channels. Despite the obvious importance of having a digital transformation strategy in place, more than half of respondents – 52 per cent – have not defined or started implementing a digital transformation strategy yet.

Globally, Chinese retailers are more likely to implement their defined digital transformation strategy (58 per cent) than the US (40 per cent), with 19 per cent of US retailers struggling to or choosing not to define this strategy at all.

Mobile-enabled applications (85 per cent), big data (86 per cent) and use of social media data (85 per cent) are the top technologies survey respondents are investing in or plan to over the next 12 months, while automation and IoT are lower on the list for investment but gaining momentum as they are perceived as true game changers.

Omni-channel execution amongst global retailers continues to lag in areas of order fulfillment, and profitability is still a challenge. Close to 74 per cent of respondents believe that the cost of customer returns is impacting profits to at least some extent.

The survey also found that retail CEOs are increasing their investment in buy online, pick up in-store (BOPIS), with 51 per cent of survey respondents saying they offer or plan to offer BOPIS in the next 12 months – up from 47 per cent in 2016.

PwC conducted this survey in late 2016 with 351 responses from executives in the United States, Mexico, the United Kingdom, Germany, China, and Japan.