The winners and survivors in the retail industry over the next few years will be the frontrunner companies that adopt technology that provides a compelling, personal and frictionless experience for their customers.
The South African retail industry has experienced significant changes and challenges over the past three years as ‘click and brick’ emerges and the sector is driven by a more customercentric seamless experience.
Overall, early adopters are seen achieving an increase of more than 9% in revenue creation, with the technology delivering a 26% improvement in profitability and market valuations rising by more than 12%.
“The consumer-driven growth revolution will require all businesses to change,” SAP Europe, Middle East and Africa VP and consumer industries head Klaus Boeckle tells Engineering News.
Technology is playing a significant role in customercentricity, leaving retailers having to “reimagine” entire end-to-end processes, from the point prior to first interaction to post-sales fulfilment, which often requires digitalising products and services, or completely revamping the business model.
“The whole value-chain needs to be considered [and] an end-to-end vision needs to be defined [to drive total customer experience],” he says, highlighting that the digital consumer is changing the game.
The digital transformation priorities for retailers are customercentricity, where the customer’s point of view is at the centre of every decision, followed by ‘service to the segment of one’, where the retailer leverages customer insights to provide targeted personalised offerings.
The digital consumer supply chains also need to be considered to connect the real-time supply chain for greater efficiency and new levels of responsiveness.
The other two priorities include smart retail technology, where the retailer differentiates the consumer’s shopping experience and drives new revenue opportunities, and monetising new customer offers, with retailers leveraging their understanding of customer needs for new revenue-generating offers.
“All retailer digital investments should be viewed through the lens of ‘how to compete against Amazon’.”
Intelligent technologies will drive a next-generation value economy, with the global economic growth of the last nine years powered largely by technology.
“Record corporate profits and new business models can all be tied to technology-driven innovation,” he says.
However, while 90% of CEOs believe the digital economy will impact on their industry, fewer than 15% are executing a digital strategy.
“On average, an S&P 500 company is now being replaced once every two weeks. This tumble rate is accelerating – with the difference between winners and losers tied to their ability to embrace digital technologies. The next decade will, of course, bring about even greater tectonic shifts.”
New technologies, business models and consumer behaviours are providing complications, with every company having to expand beyond traditional industry boundaries and transition into a technology company.