Numerous macro factors undeniably influence the global retail industry. Currently, escalating inflation rates, higher interest rates, ongoing labor challenges, and declining consumer spending are all contributing to an atmosphere of uncertainty.
But as a retailer, now is not the time to be idle or complacent. Such inaction not only puts your business at a disadvantage today but also jeopardizes its survival in the future. Surely no retail leader would want to witness that trajectory during their tenure. The good news is there is a way to avoid this outcome — by adopting a solid digital transformation plan that centers on omnichannel technology.
Why choose omnichannel? Because it’s proven to be a highly effective strategy, especially during turbulent times. In fact, omnichannel customers tend to spend 4% more in-store and 10% more online compared to those who stick to a single channel. Moreover, retailers who implement omnichannel strategies boast a 3.2% compound annual growth rate (CAGR) in market share, while their non-omnichannel counterparts only achieve a 1.5% CAGR.
So, how can you initiate your digital transformation and embrace omnichannel? First and foremost, it’s crucial to acknowledge the realities that can hinder transformation projects, such as siloed teams, resistance to change, and conflicting business priorities. Make a firm commitment to address and overcome these challenges within your organization. Once you’ve done that, it’s time to take the following concrete actions.
1. Create a Vision for Technology
Above all else, you need to behave like a technology company. This means adopting a proactive and innovative approach to leveraging technology as a driving force for business growth. To ensure the success of this transformation, such behavior must be deeply ingrained in the organization’s culture and values. It should be embraced throughout the entire hierarchy, from top-level management to every employee.
If you are a chief executive, it is your responsibility to make your technology vision visible across the organization. Omnichannel decisions shouldn’t be solely left to the retail IT team or finance department. That would be putting them in a silo, which we know is a recipe for failure. Every group must align around common goals and program milestones to achieve the best possible results. By having a clearly defined vision for technology, your company can stay competitive and responsive to the ever-evolving market demands and customer expectations.
2. Focus on Business Value
Digital transformation is notoriously difficult, but it doesn’t have to be. Avoid getting distracted by flashy technologies and only invest in systems and solutions that truly drive your business forward and offer tangible business value. In the past, retailers often experimented with technology solely for its impressive features, even if the improvements were marginal or insignificant. While innovation and experimentation remain essential for agility, the current retail climate requires a more purposeful approach to technology selection. Focus on identifying technologies that genuinely solve problems and serve a real purpose, such as improving efficiency, enhancing productivity, and elevating customer experiences.
Beyond return on investment, consider the “time to value” - the duration it takes for your company or customers to reap the benefits of new capabilities. Swift value creation is crucial; lengthy waiting periods are no longer feasible. Each investment should yield rapid value and sustain growth at scale. Since omnichannel represents a long-term and transformative investment, it’s essential to ensure that everyone in the organization understands the significant business value at stake and how much time it’ll take to get there.
3. Future-Proof Your Technology Foundation
Retailers can no longer afford the prolonged timelines and high costs associated with large scale technology projects and maintaining legacy systems. Embracing a technology company mindset involves adopting a modern infrastructure that offers flexibility and avoids being constrained by limited capabilities. Moving to a composable architecture, which leverages approaches like MACH (Microservices, API, Cloud, and Headless), empowers businesses to adapt to constant change and deliver exceptional digital experiences.
With the MACH approach, you won’t have to navigate this transformation alone. Building your foundation on best-in-breed technology partners enables continuous innovation. The right partners will also prioritize your goals and provide solutions to tackle your challenges head-on. To unlock the full potential of omnichannel and accelerate your digital transformation, you need to get out of your own way and lay down the technology building blocks that will set your brand up to thrive both today and tomorrow.
In the retail industry, digital transformation is an absolute imperative, and omnichannel holds the key to growing and evolving even during uncertain times. By taking the above actions, you can successfully cultivate strong customer relationships that foster loyalty and ensure the long-term sustainability of your business.
NewStore is a mobile-first, modular cloud platform that includes POS, order management, clienteling, inventory, and native consumer apps. The company allows brands to easily deliver amazing shopping experiences that store associates and consumers love.