The ways in which we shop have constantly evolved. Whether it’s a greater shift to online shopping, card spending overtaking cash, or the introduction of contactless payments – retailers have to cope with, and adapt to, the changes brought on by consumer trends and technological progress.
The speed of change shows no sign of abating either, with Amazon launching their own “check-out free” store in January of this year. This new mobile driven concept allows consumers to be notified when a product is in stock and to take a product off the shelves without having to queue at a check-out to pay.
While many retailers are a while away from adopting this futuristic shopping experience, it does reflect the increasing adoption of digital, IoT and mobile technologies. Customers now expect a seamless, quick, yet personalised service – otherwise they will just head straight for the competition.
While this is an exciting time, our recent research into UK and Irish retailers found that the voyage to digital transformation is not without certain challenges that will need to be identified and navigated carefully.
Short-changed on training
When surveyed, it was worrying to see that only 22% of retail employees in the UK feel confident that their employer has given them the digital tools they need to succeed in their roles. In Ireland this statistic rises substantially to 62% – a healthier figure which places Irish firms ahead of their British counterparts but still shows room for improvement. In this industry, the ability to use technology is important across the board, whether in the head buyer’s office, or on the shop floor. Today’s customers, both online and in-store, expect a seamless technology experience – whether that’s the ability to pay contactless, click and collect or track orders online. Therefore, the inability to work effectively with digital tools could become a cause for bad customer experience, or as they will see it, service – just as much as bad manners and slow responses currently are.
The findings also suggest that not enough is being done to combat skills issue, with 32% of Irish and 25% of UK employees stating that a lack of training has stopped them from adopting digital working practices. As with all industries, the skills gap is only getting wider, and this must be something that retail bosses take seriously – with our research indicating that the UK has the most ground to cover. Retail business leaders identified a lack of skills (UK 63%; Ireland 61%) as their biggest barrier to effective digital transformation, which suggests an investment in training might help overcome this evident digital disconnect.
Protecting the most valuable stock
Never before has the protection of customer data been more important. Upcoming changes in data regulation such as the European Union’s General Data Protection Regulation means that any loss of customer information could pose a threat – be that reputational, penalties or customer attrition – to any modern retailer.
One of the biggest risks to customer data is the growth of cyber criminals. With data seen as a valuable commodity or bargaining chip, new tactics are constantly evolving – with retailers not escaping unscathed. One only needs to look at the recent Forever 21 hack, or the landmark Target case to understand what is at stake. It is therefore worrying to see that within this sector only 25% of Irish and fewer than one in five (18%) of UK IT Decision Makers (ITDMs) strongly felt that they were well prepared for a cyber attack. Compared with the market at large, retail ITDMs lag their peers by 3% (Irish ITDMs 28%). However, UK retailers are well behind the average sentiment of 52% expressed by ITDMS in the UK. The sheer amount of data that retailers now hold on their customers makes this a huge cause for concern: not only could this have ramifications once the EU General Data Protection Regulation comes into effect, it places them at a distinct disadvantage when compared to other markets (Ireland) or other industries in the same market (UK).
Preparing for next season’s trends
Despite all the talk about future gazing technology impacting the industry, when asked if they thought their business would exist in its current form in five years’ time the clear majority of retail business and IT decision makers believed that it would. A staggering 94% of UK heads and 82.5% of their Irish counterparts believe that their business will not change. Given the huge changes that are already taking place this begs an interesting question: Does it show a lack of understanding about what has happened to the industry? Do retailers genuinely think that there will not be another seismic change in their market, or at least one that will change their business in the immediate future? Or are they confident that changes they have already undertaken will future-proof them for the next half decade?
Whatever the answer, one thing is certain. No organisation – and retailers are no exception – can navigate future challenges or exploit opportunities on the horizon without effective leadership; the buy-in of a skilled, competent and confident workforce; and the right technologies to effect strategic business outcomes. As retailers contemplate how prepared their business is, those that have invested in a resilient infrastructure and an open flow of communication, and those with strategies in place to overcome disruptions, will be the ones to smoothly charter the seas of digital transformation and ensure their organisation doesn’t fall out of fashion.