The 5 critical digital transformation initiatives retailers miss
By Phil Dawsey, Senior Product Marketing Manager, DocuSign
According to a report by Retail Dive, 75 percent of U.S. retailers say the need for digital transformation has increased since 2016. Yet, that need doesn’t always translate into action, and when it does, the focus is often on flashy customer-facing technology like smart changing room mirrors with a touch screen that uses artificial intelligence (AI).
That’s totally understandable – after all, it’s cool, noticeable, and promises big benefits. But many retailers focus on these customer-facing technologies and miss foundational tools that are critical to success in modern retail. In fact, skipping these core elements jeopardizes the success of initiatives like that smart mirror or a new point-of-sale (POS) system.
So, in the first of a four-part retail blog series, I dive into five crucial technology initiatives every retailer needs.
#1 Digital contracting
Contracts are everywhere in retail from HR to procurement to sales and service. Without contracts, it’s hard to purchase inventory, hire seasonal workers, sign up new members, or sell services. For example, if sourcing finds a new product that would be perfect for the upcoming season, you want that vendor onboarded asap to drive traffic with a better assortment of merchandise. Chasing paper contracts can take months and put you behind other retailers who are able to offer products from new vendors faster.
Digitizing the contracting process with a modern agreement cloud with tools such as DocuSign eSignature and DocuSign CLM increases efficiently and puts you ahead of the competition. It’s my top tool that retailers miss because digital contracts are relevant to every department across the business, can be rolled out in weeks, and deliver ROI almost immediately—with little to no risk.
#2 Data collection
Data is the lifeblood that feeds all other digital initiatives and every aspect of the retail business.
Your merchandizing decisions; every aspect of your store, from how it’s laid out to how customers interact with each element; how inventory is managed; which products sell better—all these elements need to be data driven in order to win today.
Bottom line: data allows you to personalize and improve the customer experience. So, it’s crucial to make sure you’re collecting data wherever possible and that you have a plan for using that data.
That doesn’t mean you need to put sensors everywhere like Amazon Go. Just use the tools you already have (like loyalty programs, point-of-sale software, and order management systems) and make sure to use the data you collect to inform decisions. This latter point is critical, which is why I cover it separately below.
- Point of sale (Square)
- Loyalty programs (Fivestars)
- Web analytics (Google Analytics)
- eCommerce (Apptus)
- Order and Warehouse Management Systems (Manhattan, Brightpearl)
You may have lots of data already, and that’s great. But if all you do with that data is simple rollups – we sold 10,000 widgets – then gathering data is really a waste of time and money. To get anything out of #2, you need to use the data you collect to make evidenced-based business decisions. This is a challenge for every industry, including retail, but making the shift can give you a competitive advantage. For example, you can better allocate resources when you use data to answer questions like:
- How do customers interact with your website (popular pages, products, time spent, etc.)?
- Do some AI recommendations increase basket size more than others?
- Where do customers drop out of the online buying process (abandoned carts)?
- How long does in-store checkout take across geographies – can one store learn from another?
With the amount of data available today, you need tools to filter and analyze all that information. This isn’t just a technology decision, though. It’s a shift in mindset that requires getting leadership to buy into using data to inform decision making.
#4 The cloud
Online storefronts hosted in static legacy data centers can pose severe limitations in terms of scalability, performance, security, and total cost of ownership. That’s a big deal when ecommerce is growing at over 14 percent. Moving to the cloud is inevitable as retail engages with customers across multiple channels (online, in-person, phone, voice, etc.), using new digital capabilities. Information must be accessible from anywhere, at any time.
A cloud-based strategy offers much more flexibility and scalability now and in the future, whatever that future may hold, be it virtual reality, augmented reality, drones, and more. Having a system that’s always right-sized is also easier on the budget, with details like security, uptime, updates, and more taken care of for you.
- Cloud platforms: AWS, Google Cloud, Microsoft Azure
- Prebuilt clouds for specific purposes: Salesforce Sales Cloud, Service Cloud, and Community Cloud
#5 Integrated approach
Retail is changing and competition comes from industries like tech, healthcare and financial services, so retailers need to operate as efficiently as possible across departments. This means when building a technology stack, retailers need to take a more strategic and integrated approach. What does this mean? Well:
- Pick one: using SAP in one department and Oracle in another isn’t a long-term solution
- Integrate: everything needs to work together now, so make sure any new solution fits with your existing tools
- Get core business systems in place: communication, productivity, and connectivity solutions need to be in place to get things done quickly
- Think bigger: whatever technology decisions you make, whether it’s installing smart mirrors in dressing rooms, a new data analytics solution, cloud-based productivity tools, or something else, think of how it will work together with your systems now and in the future
For more information, check out the following resources:
- The Retail Makeover: New Systems for a Changing Retail Landscape (white paper)
- The DocuSign Agreement Cloud for Retail
- The cloud as a catalyst for retail, by McKinsey Digital
- Geek meets chic: Four actions to jump-start advanced analytics in apparel, by McKinsey Digital
- Report: US retailers see increased need for ‘digital transformation, Retail Dive
Also make sure to check back next week for my blog on Five low-risk ways to modernize your customer experience.