The good the bad and the reality of digital transformation in retail
Summary of Workshop with Antony Welfare discussing Digital Transformation in Retail
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It goes without saying that retail is one of the most public examples of how the need to integrate online and offline experiences has revolutionised an industry. Whilst disruptive brands and technological advancements make the headlines, the impact this strategy has on the role of a retail focused finance professional is easily overlooked.
When I speak to my network and discuss the impact and opportunity that Digital Transformation offers there are a number of similar themes, most importantly, the need to understand the latest trends that will enable them to consistently provide process improvements and process automation. There is also an acute awareness of the challenges they face when expected to provide multi-touch point reporting, modelling and forecasting based on an ever increasing and complex financial model and how equipped their team is to support and strategically influence the wider business during this period of change.
For those individuals working within an established high-street retailer the conversation regularly turns to the historical, and often eye watering investment, that has been made in physical retail. A conversation that regularly dwarfs the threat of disruptive online competitors as the accepted reality is that if a business with a history and vintage can lead from the front and transform their digital offering then they are in an enviable position.
As the Finance function is increasingly seen as a partner to the business to enable strategic improvement, the need to fully appreciate digital transformation is at the forefront of this agenda. To be able to provide strategic direction there is a need to understand the focus of the technologist and provide a different lens through which to predict the next opportunity. This of course, is against a backdrop where the retail industry is involved in a challenging economic environment and maintains a clear focus on the need for effective spend.
From a people perspective the most in-demand candidate profiles are technically savvy individuals with the commercial acumen to provide value added growth. The reality is that both at a management level and junior level, exceptional professionals need to embrace change.
Requirements that are juxtaposed against an industry that is built on rewarding in-house growth, tradition and familiarity as the cornerstone to professional success. Even the most established managers and leaders need to accept that to remain relevant in an incredibly competitive and evolving landscape, they must be open to innovation and different ways of working. It also goes without saying that the most exceptional candidates are looking to engage with employers that are the forefront of the industry and progressive.
THE REALITY FOR FINANCE PROFESSIONALS WITHIN RETAIL
The ongoing external pressure and expectation to invest in digital transformation and a consumer first strategy continues to have a fundamental impact on the finance function. Within a hugely competitive landscape, the ever evolving requirements and speed of technological adoption creates a variety of issues when forecasting and accounting for historical spend.
AN EXPERT OPINION
We had the pleasure of inviting retail, ecommerce and digital specialist Antony Welfare to share his expert opinion and insight with a selection of senior finance professionals. Antony is a vastly successful management consultant, with over 10 years physical retailing experience, combined with a further 10 years ecommerce and digital expertise so ideally placed to advise on the future of the industry without losing sight of its tradition.
Antony shared a number of examples from the current retail landscape and provided in-depth insight into future trends of the retail industry and the associated financial pressure and restraints.
Key highlights included:
- Do you really understand your customer journey? Whilst every journey is different Antony posed that there is always a problem that needs to be solved. Even within the most complex of Omni channel environments.
- Disruptive technology – how will you manage (and succeed) in the new world? Whilst IOT, AR and VR dominate the headlines there are many other technological advancements, most notably Blockchain, that have the potential to revolutionise the industry.
- What does the store become? For organisations with extensive retail estates Antony shared the most effective ways to maximise this investment, including; creating experiential stores and improving click and collect, whilst showcasing the best in class and most cutting edge examples that are currently reaping rewards.
- Systems and processes – when exploring the highlights of systems functionality and data flow Antony provided the advice not to let technology get in the way of putting your customers first, Digital transformation is a conduit to delivering the right customer experience.
- Will you take your people where you need them? Antony shared that Retailers find that one of their biggest impediments to sustainable growth is a lack of quality ecommerce and digital skills and understanding. To beat your challenging growth targets the only option is to fill the multichannel skills gaps.
WHAT NEXT?
As Antony quite rightly said “We can no longer be a little bit digital”. The one thing that is clear is that success will most likely rely on being able to deliver real-time, personalised content and connecting the insight from a vast array of tools and systems.
With new online only start-ups launching on a daily basis and the dominance of a few established online e-tailers, established retailers will need to continue to explore new ways to blend their online and offline customer experiences without diluting what makes their brand special. For many businesses that have been built on bricks and mortar this requires substantial change and a realignment of strategy focused on agility at scale.
The reality is that the digital customer has revolutionised retail and whilst the key trends are relatively easy to predict and plan for the biggest opportunities remain in the unexpected or unknown. Being able to budget and forecast based on the unknown create a conundrum for finance professionals, especially if you are used to pre-existing models that rely on physical spend.
Whatever happens next, all of this change will create a considerable people challenge within finance. As the opportunities within AI, VUI, VR (and many other acronyms in-between) will be at the top of numerous agendas any investment will cause disruption to the workforce. One thing we can be certain of is that technical spend alone is not the answer and success will be determined by not only hiring in new skills and expertise but upskilling existing employees.
SUMMARY – THE GOOD, BAD AND… THE OPPORTUNITY
So whilst the headline may have been a little emotive it is undeniable that there is no sign of technological slowdown as the retail sector undergoes radical and progressive digital transformation to grow and retain existing customers. Whatever the focus of an organisations strategy the underlying priority is on increased reporting, more accurate analytics and in turn increased accountability.
From a people perspective, whether the transformation is focused on sophisticated ways to deliver products, innovation in the supply chain, better connecting a customer’s online and offline experience or all of the above, it provides an incredible opportunity for finance professionals to play a leading role and enhances the path of a finance professional to CEO.