Retailers. Dare to transform!

Written by Martin Hermsen Comments 0

virtual supermarket

Retail companies have been dealing with increasingly diverse and faster paced consumer expectations for some time now. To satisfy these expectations, they have felt forced to move faster and faster within a wide variety of channels. Mostly though, they implemented cosmetic changes such as loyalty programs, store remodels, adapting product portfolios, etc. Again and again it was a difficult trade-off between consumer experience, logistical efficiency and business profitability.

But in the recent years of digital evolution, the retail industry is facing existential questions about the role they play as a company and the way they should optimize for this digital omnichannel world. Cosmetic changes are no longer sufficient; well thought-through transformations are necessary.

Several trends in the retail industry are forcing companies to increasingly integrate their digital strategies into their wider business model to improve their speed of action, reduce costs, shorten cycle times and increase responsiveness to consumers:

Uniform customer experience across all channels

Consumers expect the same (personalized) experience at every touch point in every channel. How can you make all consumer experiences consistent across all channels? How do you manage the flow of information and how do you ensure that the customer always feels the same brand values, whether he is dealing offline with a store clerk or posing a direct question via Twitter?

Channel Integration

Combining online and offline is not only a challenge in terms of communication, but even more so in terms of logistics. How do you get online and offline sales to reinforce, rather than cannibalize, each other?

Decreasing margins

Digitization and logistics optimization have ensured that proximity is a relative term. This causes decreasing margins due to an increasingly competitive environment and substitution. How do you cope with this through operational efficiency and cost reduction? How do you compete with your competitors who have a completely different cost structure?

If you want to be successful in this day and age, you will need to develop new and distinctive competencies, such as fully taking digital control of the customer experience, developing omnichannel concepts, big data management and analytics, connectivity to mobile consumers and real-time decision-making processes, but also ensuring a business model that supports all of this optimally.

Dare to ask yourself which role you want to play for your customers and your partners. How far will you go for example to outsource tasks that were formerly part of your core activities in order to be even better in the remaining activities and continue to distinguish yourself through those? Which of your competencies can you cash in on because they are interesting for new partners or even competitors?

Many companies have already started to build digital competencies within individual silos like IT, commerce or customer service, but after the expansion and maturation of their digital propositions they have not been able to bring these skills from the silos and integrate them into their business model. The lack of an integrated digital business model leads to missed opportunities in terms of operational efficiency and revenue growth, reduced customer engagement and deteriorating competitiveness.

We believe our customers can only meet the current challenges by tackling digitization as a complete transformation of the entire company.

Carel Hoytema van Konijnenburg

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