84% of retailers fear falling behind on digital transformation: study
Digital transformation is a priority for more than one in three UK businesses, according to a new study.
But while 84% of retailers fear falling behind on digital transformation and 77% are currently feeling the impact of disruption from digital innovation in their market, according to the Apigee Institute's 2015 UK Digital Business Survey Snapshot, many are limiting their response to building mobile apps. Some 89% of retailers said they had introduced a mobile app in 2014, and 58% expected to do so in 2015.
Bryan Kirschner, director of the Apigee Institute
, says that's not enough. “In what’s rapidly becoming a mobile-first business world, all manner of industries are being ‘shaken up’ by digital innovation," he said. "The growing sophistication of digital technology and increasing customer expectations are creating new demands for enterprises. Regardless of industry, every business needs to change the way it interacts with customers and partners – using data and digital technologies to create new digital experiences, new efficiencies, and to grow and expand faster in today’s digital world.”
The study, which questioned 252 senior executives and IT decision makers from the retail, banking, travel and telecommunications industries, found that respondents who only delivered apps yet saw increased revenue reported a median increased revenue worth about £266,000. In contrast, the respondents who invested in apps, APIs, and analytics saw median returns of over £9m. More than half (55%) of the businesses surveyed said they planned to offer more services via mobile devices in 2015. But while significant majorities of those surveyed consider developing APIs (75%) and the ability to collect and analyse big data (77%) important priorities for 2015, only 26% of surveyed UK executives reported plans to deploy new APIs in 2015, and only 35% to incorporate big data analytics into their products, processes and services.
According to Kirschner, “We believe businesses need to move beyond merely rolling out mobile apps and instead look more holistically at how they can understand and add value to their customers using data insights and analytics. Our research shows that only 10 per cent of ‘app-only’ companies have seen an increase in revenue from their digital efforts versus 81 per cent of those who have incorporated data analytics and implemented APIs along with their deployed apps.”
The study found that UK retail businesses were most likely to turn digital because they wanted to improve the customer experience. That was followed by providing new experiences or services for customers, and then by identifying new sales opportunities. Some 18% created new digital-powered revenue streams in 2014, and one in four expected to do so in 2015. More than two-thirds (67%) wanted to better understand their customers this year by creating a more connected experience.
Sienne Veit, director, online product at John Lewis , says businesses must think beyond the mobile app.
“Nowadays, not having an app would be like not having a website a few years ago – it is now a business essential," she said. "But it’s not just about having an app in the store, it’s about making sure this digital offering is aligned with all parts of the business."
At John Lewis, she said, “it’s essential that our digital offering is closely intertwined with the physical in-store experience. Our digital services need to allow for a fluid end-to-end journey. For example, because we sell considered, expensive items, a customer is likely to first look online, then go and look at the item in store, then head back online to order it. There cannot be any disconnect between any of these stages, which is why we need to provide great flexibility in our apps.”Our view:
provides intelligent API platforms and analytics, there's an element of 'they would say that wouldn't they?' to this study. But what this research says is still worth listening to. At Internet Retailing we're very much believers in the idea of the seamless cross-channel customer experience - and it certainly takes more than a mobile app to give that result.