Mistakes Retailers Make in Digital Transformation

A key challenge that retailers face today is the difficulty of accurately judging where they are on the digital maturity curve relative to their competitors. There appears to be little expertise in making this assessment; for example, 79% of digital leaders don’t know they are ranked as leaders, and only 56% of retailers ranked as average in our study believe they are at this level. The other 44% in the average category mistakenly believe they are either leaders or laggards. The lack of competitive clarity makes it even more difficult to develop an effective competitive strategy.

Our research suggests that retailers’ plans reflect neither self-awareness nor a realistic idea of what it will take to catch up or leapfrog their competitors in this highly competitive space. Namely, factors such as online sales penetration, business performance, attitudes about digital, planned technology investments and efforts to close skill gaps do not align with the progress retailers expect they’ll make vs. their competitors over the next three years.

As part of this research exercise, we also asked 125 retail managers about the biggest mistakes they saw related to the digital transformation. Their top five answers were as follows:

1. Failing to stay fully on top of changing customers’ needs and behaviors.
2. Focusing insufficiently on cybersecurity.
3. Ignoring fresh thinking from outside the company.
4. Lacking a clear digital strategy.
5. Moving too slowly. 

All five of these top answers are indeed critical to success. Retail executives would be well served to take these opinions from retail managers to heart.

Successful digital transformation initiatives require executives to have a vision for and understanding of what they are trying to achieve. As number 4 above identifies - retail managers believe an unclear digital strategy is among the biggest mistakes companies make when embarking on a digital transformation strategy. Digital strategies flow from and are the result of an effective digital transformation master “doctrine.” The purpose of a digital transformation doctrine is first to create a unified understanding of why digital transformation is needed and, second, to guide all tactical digital strategies that evolve from it. An organization’s digital doctrine should influence its strategy, its operating model and the tactics it employs to compete.

You can download the full report, "How Digital Thinking Separates Retail Leaders from Laggards" here.

Watch the 3-minute video on digital thinking in retail.

Follow Kevin Benedict on Twitter @krbenedict, or read more of his articles on digital transformation strategies here:

1. Winning Strategies for the Fourth Industrial Revolution
2. Digital Transformation - Mindset Differences
3. Analyzing Retail Through Digital Lenses
4. Digital Thinking and Beyond!
5. Measuring the Pace of Change in the Fourth Industrial Revolution
6. How Digital Thinking Separates Retail Leaders from Laggards
7. To Bot, or Not to Bot
8. Oils, Bots, AI and Clogged Arteries
9. Artificial Intelligence Out of Doors in the Kingdom of Robots
10. How Digital Leaders are Different
11. The Three Tsunamis of Digital Transformation - Be Prepared!
12. Bots, AI and the Next 40 Months
13. You Only Have 40 Months to Digitally Transform
14. Digital Technologies and the Greater Good
15. Video Report: 40 Months of Hyper-Digital Transformation
16. Report: 40 Months of Hyper-Digital Transformation
17. Virtual Moves to Real in with Sensors and Digital Transformation
18. Technology Must Disappear in 2017
19. Merging Humans with AI and Machine Learning Systems
20. In Defense of the Human Experience in a Digital World
21. Profits that Kill in the Age of Digital Transformation
22. Competing in Future Time and Digital Transformation
23. Digital Hope and Redemption in the Digital Age
24. Digital Transformation and the Role of Faster
25. Digital Transformation and the Law of Thermodynamics
26. Jettison the Heavy Baggage and Digitally Transform
27. Digital Transformation - The Dark Side
28. Business is Not as Usual in Digital Transformation
29. 15 Rules for Winning in Digital Transformation
30. The End Goal of Digital Transformation
31. Digital Transformation and the Ignorance Penalty
32. Surviving the Three Ages of Digital Transformation
33. The Advantages of an Advantage in Digital Transformation
34. From Digital to Hyper-Transformation
35. Believers, Non-Believers and Digital Transformation
36. Forces Driving the Digital Transformation Era
37. Digital Transformation Requires Agility and Energy Measurement
38. A Doctrine for Digital Transformation is Required
39. Digital Transformation and Its Role in Mobility and Competition
40. Digital Transformation - A Revolution in Precision Through IoT, Analytics and Mobility
41. Competing in Digital Transformation and Mobility
42. Ambiguity and Digital Transformation
43. Digital Transformation and Mobility - Macro-Forces and Timing
44. Mobile and IoT Technologies are Inside the Curve of Human Time

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Kevin Benedict

Senior Analyst, Center for the Future of Work, Cognizant

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***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.