GUEST COMMENT From the old to the new: a two speed approach to digital transformation in retailing
Retail was one of the first sectors to feel the digital winds of change. Subsequent widespread introduction and popularity of online shopping has not only changed the way we shop forever but heightened consumer expectations. People still enjoy going shopping in real stores but when they get there, they want the experience to be more like it is online — seamless, easy and personalised — as well as entertaining. The trouble is, in the rush to develop successful digital channels, the physical store environment has been left behind. Despite the abundance of amazing digital retail innovation now available, most stores still look and work like they did 20 years ago.
Digital technology has huge potential in the bricks and mortar store, not only by introducing all the personalisation and convenience of ecommerce but by creating a more immersive and engaging experience for shoppers that cannot be matched online. Intelligent fitting rooms, interactive window displays, digitally-enabled inventory, mobile POS and tools that turn every sales associate into a personal shopping adviser — retailers really need to get this digital transformation underway.
It’s not that CIOs don’t understand the urgency. In BT research
into the Digital CIO, we found that, without exception, every CIO considered the digitisation of business to be a personal priority. What’s more, boardrooms expect their CIOs to be more strategic, creative and consultative, to be leaders for the digital age. So what’s stopping them?
The answer is: they just don’t have the bandwidth. The working day is dominated by the need to keep the existing plates spinning. CIOs are so busy nursing along their ageing enterprise systems that they don’t have the time to spend on new ways of doing things. Close to two-thirds (61%) of senior IT decision makers feel that the CIO is spending more time maintaining current IT systems than searching for new solutions. While that’s down from 2014, when the figure was 74%, it’s not enough to free up the CIO to focus on digital possibilities for the future.
It’s time to grab the bull by the horns. Retail CIOs should start to move towards a dual operational model. That is, accept the need to wind down legacy systems, and establish a strategic cloud platform to host all new and future digital solutions. This keeps the new and the old separate; the CIO need only migrate to the cloud those legacy systems that will be essential to a digital future.
Because it’s so easy for individual departments or stores to procure cloud-based retail innovations and pay for them from their own budget, the retail CIO is already faced with juggling the demands of a patchwork of digital solutions. This task will be much easier if all digital products and services sit on the same cloud platform, in a ‘cloud of clouds’.
What’s more, while it’s fairly easy to pilot digital technology in a handful of stores, rolling out innovations consistently across a global store network is more of a challenge. But not when you base digital transformation on a single cloud platform. It also lets the retail CIO provide flexibility and choice to the business while managing digital transformation from the centre.
And as we move towards an ever more connected world, retailers will be faced with the further challenge of extracting insight from the countless streams of data that will flow from customers, inventory, in store applications, external services and business partners. Now is the time to put in place an infrastructure that can collect, aggregate and consolidate that data, and host analytical tools that are available across the organisation.
One fifth of global organisations are already completely cloud-centric, and a further 46% have more than half their applications and infrastructure in the cloud. For retailers in particular, establishing a cloud platform is an essential step in creating the digital store experience customers seek. And for retail CIOs, running the old and the new in parallel will allow them to begin to fulfil their potential as business leaders for the digital age.