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Majority of UK retailers see Digital Transformation as business critical, IR study finds

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Two thirds of UK Top500 retailers see digital transformation as crucial to their business, while a further quarter rank it as important.

So finds research carrier out by InternetRetailing in conjunction with Greenlight Commerce that suggests that 90% of retailers across the IRUK Top500 are well aware of the need for digital transformation in their business.

The research – which forms part of a new white paper Customer-centric commerce: how to align marketing and technology to better serve today’s customer, produced in conjunction with Greenlight – also finds that 45% and 31% of Top500 retailers consider themselves well on the way, or at least underway, respectively, with their digital transformation processes.

At the heart of this digital transformation process that is well underway for the majority of retailers are the customers, with 51% of retailers logging this as their primary driver. Interestingly, the second biggest driver at 32% is competitors. Third comes the board.

“The requirement is clear, to marry marketing and technology to better serve today’s customer, but it is easier said than done. It puts into question roles and responsibilities within your organisation, the nature and capabilities of your agency partners, how data is collected and used, your culture, your R&D budgets, and what underlying technical architecture and commerce capabilities you are operating with,” says Kevin Murray, CEO at Greenlight Commerce.

The main issue, he suggests, lies in bringing together the front-end (customer facing) experience of a website digitally transformed to meet the demands of digital consumers and the back-end technology stack needed to deliver it.

Here we get to the real practicalities of digital transformation and the survey data bears it out. While the front-end and engagement channels are the obvious face of digital engagement, it is the back-end from where it is driven that really matters. The speed of technology change – and the speed of change of what is demanded of back-end systems in digital transformation – pitted against changing demand from consumers moving at an accelerating pace combine to make this the biggest headache for retailers: 49% of them, in fact.

Piecing this together with trying to work with disparate systems and the lack of a single customer view is also a large headache for 45% of retailers, says the study. Lack of integration and costs are also up there (33% and 39% respectively). Combined, these challenges aren’t inconsiderable, but overcoming them is fundamental to digital transformation.

The answer lies in working with third parties to stick it all together. Many retailers and brands already recognise this with 32% working with five or more third parties both in the front and back-end of their marketing communications. Typically, most retailers are working with one or two third parties in both front and back-ends and, with the figures so similar, these may well be the same third parties in each.

Either way, retailers are starting to adopt this approach to help deliver digital transformation within tight budgets and even tighter deadlines.

“To reflect this new reality, today’s agency needs to produce integrated, transformational strategies across the entire digital space, not just single improvements. They need to create new eco-systems, not just build individual systems,” concludes Murray. “To do this they need to have the creativity and media capabilities of a media group and the technological and transformational skills of a consultancy. And like yourself, it needs to put your customer front and centre.”


Image: Fotolia/IR

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