Less than half of major retailers are truly digital

By

Marion Deslandes

Translated by
Nicola Mira

Published
Mar 15, 2017

The retail sector is in the midst of a revolution triggered by the advent of e-commerce, and now needs to adapt constantly. US software company JDA, specialised in logistics and retail, analysed the new challenges in a 2016-17 survey carried out jointly with PwC. JDA, a solution provider to 73 of the world's 100 largest retailers and distributors, found in the survey that only 48% of them have gone truly digital.

The survey was carried out worldwide with 350 senior executives from retailers in every industry, from fashion to food to mechanical tools, and showed that "78% of the CEOs interviewed do not plan to decrease their investment on stores, the rise of e-tailing notwithstanding," said JDA. However, 69% of the interviewees said they are planning to increase the investment in the digital transformation of their business in the coming year.

This transformation is now a must, though it involves significant investment.  As they implement omni-channel operations, 75% of retailers saw their operating costs increase, and 35% of them recorded a rise in costs of over 10%.

In this perspective, brick-and-mortar retail is by no means an enemy of digital operations. "One of the levers we identified is 'phygital' retailing," said Slimane Allab of JDA. "Through e-commerce, and even if their purchases are dematerialised, customers leave a footprint that is both physical and digital, consisting of data that can be leveraged to adapt the range in-store."

According to JDA, it is crucial for retailers, if they want to remain competitive, to become customer-centric and not to focus primarily and exclusively on products. "The store of the future must offer a range different for each retail outlet, adapted in real time depending on the location and the target clientele, said Slimane Allab. From now on stores are increasingly taking on the role of showrooms and service points, rather than retail outlets."

Besides focusing on customers, JDA underlined how digital transformation plans must also feature an array of everyday digital solutions for managing the entire business, notably for logistics, stock management and merchandising.