The State of Digital Transformation in Retail
Growth Opportunities Should be a Minimum Requirement
Companies that have not fully integrated digital transformation into their working practices might be too late. Over the last 12 months, what was once a buzzword for the connected society has become the norm, with the speed of technology innovation forcing companies to either adapt now or risk missing out on the accepted growth opportunities that digital transformation provides.
A recent report by research company Altimeter, said that digital transformation is critical to a company’s ability to compete in its chosen industry. According to Altimeter’s 2019 State of Digital Transformation report, organizations who have already (or are in the process of doing so) integrated disruptive technologies are building a culture of innovation that will sustain them both now and in the long run. And, somewhat unsurprisingly, the leading drivers of digital transformation are customer expectations and market pressure.
A culture of innovation is just the start
Around 47 percent of the 554 decision makers interviewed for the Altimeter report said that the aforementioned culture of innovation was a priority in terms of technology investment. In fact, only five percent stated that there had been no investment in emerging tech at all in 2018. Innovation was driven from the top down, the report noted, with some respondents citing the introduction of in-house teams and strategic acquisitions as reasons for the increased pace of digital transformation.
Annual budgets have increased in the last year, the report said, with 16 percent of companies allocating between $15 million and $30 million for digital transformation – a year-on-year increase of 210 percent. At the top end of the scale, 15 percent of organizations instigated an annual budget of more than $50 million for digital initiatives, a 640 percent rise from the two percent of companies who set money aside for innovation in 2017.
The overarching goal, the authors of the Altimeter report said, was not to become more digital but to appreciate that digital transformation was a minimum requirement for success. As a result, business leaders need to understand that the digital in digital transformation requires them to not just throw money and resources at disruptive technology but to factor in the evolution, impact and potential of digital customers and, importantly, employees.
“Customer experience (CX) continues to lead digital transformation investments, but as we observed in 2017, employee experience and organizational culture are also rising in importance to empower and accelerate change, growth, and innovation,” said Altimeter’s principal analyst Brian Solis. “This year, it’s clear that digital transformation is maturing into an enterprise-wide movement. Digital transformation is modernizing how companies work and compete and helping them effectively adapt and grow in an evolving digital economy.”
The Post-Digital Era
Company decision makers need to focus on the top priorities for technology investments over the next 12 months. Digital transformation was always intended to modernize not only the technological infrastructure at a company but also the customer experience itself. In retail, for instance, the practice of digital first has often morphed into digital only, driven by the demands of the connected society.
According to Accenture’s Technology Vision 2019 report, technology has accelerated at such a rate in the last three years, that the concept of digital transformation –which began as a differentiating advantage—is something that is expected of every business. For the purposes of the report, Accenture surveyed over 6,600 business and IT decision makers, with 94 percent stating that the pace of innovation in their companies had increased significantly in the last three years.
The immediate future will be characterized by a need for companies to respond to customer demands, Accenture said, with digital now simply the price of admission. Most companies are aware that the word itself is already passé in the collective consumer consciousness, but the trick will be master technology investments from the ground up. In other words, we are entering a post-digital era.
“Meeting that challenge will require businesses to acknowledge that they’re not alone on their digital transformations,” said Accenture. “People have been transforming too. Customers, employees and even threat actors will reflect different post-digital realities.”
Taking the above into account, there is a consensus that companies should be thinking about this post-digital era now. That is not to say that digital transformation is over, rather that organizations should be conscious that their existing digital competency might not be enough to set them apart. As a result, technology investments need to dovetail with identified market pressures and potential pain-points.
Prioritizing Tech Investments
Altimeter’s report highlighted the usual suspects in terms of technology investments—cloud, cyber security, artificial intelligence, big data, eCommerce—but the laundry list of potentially disruptive technologies threw in seemingly disparate elements such as blockchain, virtual reality, voice-based interfaces and autonomous vehicles/robotics. The latter, for example, was cited by around seven percent of respondents, a sign that investment in commercial robotics is seen as a priority, especially for those companies that rely heavily on effective distribution and logistics networks.
A recent report by the Robotic Industries Association said that shipments of commercial robots to North American companies, for instance, hit record numbers in the last 12 months. Almost 36,000 units were installed in 2018 – a year-on-year increase of seven percent—with a full 16,702 of these shipments going to non-automotive companies such as food and consumer goods, plastics and rubber, and life sciences. In addition, IDC predicts that spending on commercial robotics—defined as those outside the traditional industrial manufacturing sector—could hit $53 billion 2022, with users achieving “significant business value” from the technology.
“While the automotive industry has always led the way in implementing robotics here in North America, we are quite pleased to see other industries continuing to realize the benefits of automation,” said Jeff Burnstein, President of the Association for Advancing Automation (A3), in a RIA press release. “And as we’ve heard from our members and at shows such as Automate, these sales and shipments aren’t just to large, multinational companies anymore. Small and medium-sized companies are using robots to solve real-world challenges, which is helping them be more competitive on a global scale.”
Berkshire Grey’s holistic view of robotic automation gels perfectly with the concept of not only a post-digital era but also the need for strategic digital investments in fulfillment, retail replenishment and logistics. Our approach to commercial robotics leverages state-of-the-art vision systems, advanced gripping, dynamic planning and machine learning. As a result, our technology gives companies actual solutions to real-world challenges, especially for those organizations that want to meet their customer expectations head-on.
To find out more about how Berkshire Grey’s intelligent commercial robotics can both grow your business and complete your digital transformation, please contact us here.
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