- Survey highlights the increasing strategic importance of digital transformation and enabling technologies for the retail sector.
- Retail finance departments lead transformation, followed by sales, customer service and frontline retail operations.
- As retailing moves more online, online-to-offline customer experience remains critical for future success.
Digital transformation (DX) in the retail sector is accepted as essential and is now unstoppable, according to a new global study released by Fujitsu. More than two-thirds of retailers in nine countries, including Australia, see DX as essential to retail technology, and only seven per cent disagree. (1)
With online and physical shopping experiences moving closer together, results from the research by DataDriven for Fujitsu confirm that most DX is now well underway at most retailers. Finance departments are leading the way, with a mature implementation in place or well underway for 63 per cent of respondents. Sales (62 per cent), customer service (59 per cent) and frontline retail operations (also 59 per cent) are close behind.
Conway Kosi, vice president, sales, customer service management, and marketing, Oceania, Fujitsu, said, “COVID-19 has created a unique challenge for retailers around the world, particularly those who have a reliance on a physical retail presence.. Retailers with digital capabilities have been the ones who were most capable of pivoting to offer new products and services during this time. Fujitsu has been working closely with some of Australia’s largest retailers to help drive their digital transformation through this period of disruption.
“The changes in the retail industry will likely remain in place well into the future, and it’s encouraging to see that retailers around the world have recognised this shift and are working to future-proof their businesses. The strong adoption of digital transformation by finance teams just demonstrates its incredible power to affect the bottom line. This survey illuminates the deep changes in the retail industry, which are mostly an acceleration of the trends that were already in motion.”
Online and physical retail continue to move closer
DX is underpinning strategic shifts in retail identified in the global study. These include:
- Retailers are increasingly introducing online sales. More than one-third (34 per cent) now offer most of their products and services online, a trend accelerated by the global COVID-19 crisis.
- Many retailers are operating a hybrid online and physical model which relies on initiatives such as ‘buy online, pick-up in-store’ (BOPIS), with almost two-thirds (64 per cent) of retailers agreeing that online and physical retail continue to move closer together.
- Opening up the availability of retail data to buyers, such as current inventory levels of product, is increasing with almost seven in 10 retailers (69 per cent) also seeing this as a positive move for vendors.
Further impacts of DX on retailers include:
- Cost reduction, most prominently in logistics, warehousing and transportation, noted by 21 per cent of respondents. Other areas where DX is reducing costs are in finance (20 per cent), maintenance (20 per cent), operations (19 per cent), ICT (18 per cent) and retail operations (18 per cent).
- In customer service, 29 per cent of respondents report an improvement. Other customer-facing areas to show improvement are call centre (19 per cent), marketing (16 per cent) and workplace innovation (16 per cent).
Public cloud is outpacing private and hybrid cloud
In terms of DX technology choices, cloud is an increasing important component of ICT processing in retail. Software-as-a-Service (SaaS) is the most popular application source (32 per cent). But significant numbers of retailers are sticking with in-house processing (24 per cent) or off-the-shelf enterprise applications (18 per cent).
Despite the massive attention given to cloud computing over the last decade, very few retailers believe it is overhyped. If anything, they say it is not being given the attention it deserves. Cloud skeptics are mainly the retailers who have retained most of their processing in-house.
AI has a big future in retail and the Internet of Things will be important but not just yet
Artificial intelligence (AI) is increasingly important in retail, with more than two-thirds of respondents (69 per cent) regarding it as an opportunity and only a slightly smaller number (66 per cent) believing it will improve quality of life and help create new jobs. Although technologies associated with the Internet of Things (IoT) have many applications in retail, adoption is still slow, although 69 per cent believe the technology will eventually revolutionise retail.
Empowering retailers to design their future transformation
Fujitsu believes in empowering customers to design their future transformation to ensure they can best address strategic priorities and maximise shareholder experience. Fujitsu’s co-creating program offers retailers the opportunity to harness the power of purpose-driven collaboration, and leverage Fujitsu’s human-centric experience design (HXD) to derive greater business value through better-informed DX-related investments and decisions. Fast-paced, highly-focused co-creation sessions, led by trained Fujitsu HXD practitioners, give retailers the time, space, and empowerment to shape their transformation, mapped against a clear future business purpose. Offered virtually, these sessions span timezones, with customers contributing the commitment of time, diversity of participants and a transformation-driven mindset.
Notes to editors
(1) Research conducted by DataDriven in late February 2020 among a sample of 197 ICT decision-makers from all sizes of retail organisation, across nine countries: Australia; China; Germany; Japan; Korea; Singapore; Thailand; the UK; and the USA. The study collected two metrics: annual gross revenue and number of employees. Most respondents worked in organisations with between US$1 million and US$250 million annual revenue, and 17 per cent in organisations with more than US$1 billion in annual revenue.
Report microsite: https://www.fujitsu.com/global/solutions/industry/retail/digital-transformation-trends-retail.html
Fujitsu Connected Retail Media backgrounder: https://sp.ts.fujitsu.com/dmsp/Publications/public/Backgrounder-Retail.pdf
Fujitsu’s global retail solutions: http://www.fujitsu.com/global/solutions/industry/retail/
For more information about the Fujitsu Connected Retail Experience Center: http://www.fujitsu.com/global/solutions/industry/retail/experience-center/
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