The digital transformation in retail means broad, continuous change

For the past few years, the talk in retail has centered around the omnichannel concept, which is the idea of providing the same experience for customers no matter the buying channel. Customers expect to buy anything from anywhere at any time and have it shipped anywhere they want. This primarily digital transformation is perpetually reshaping how retailers think about their business and their supply chain.

“If digitization is not top of mind for retailers, it should be,” says Beth Thomas, executive vice president and managing director of Consulting Services at Sequent. “It’s a big undertaking involving changes with people, processes, distribution channels and technology. Companies need visibility of their inventory and a plan to tie systems together between stores, warehouses and online. Digital culture continues to change how retailers operate.”

Smart Business spoke with Thomas about what retailers must do to keep pace with consumer expectations.

What do consumers expect from retailers as more buying shifts from in-store to digital?

Consumers today either don’t want to meander around stores doing their shopping or they don’t have the time to shop. They’re doing their research online so that by the time they get to a store they know what they want and its price — if they even go to a physical store. Consumers also want to browse and shop seamlessly on any connected device and have their orders shipped the same day.

Click and collect, for example, is a service that’s making headway in London. Consumers can order products online and have them delivered to lockers rather than their homes or a retail store. Similarly, courier services within the city use bike messengers to deliver same-day orders to many locations. The level of convenience has improved greatly for consumers as retailers are forced to find novel ways of staying ahead of their competitors.

As consumer spending and behavior adapts to this increased focus on quickness and convenience, retailers must organizationally prepare to support this new service model.

What changes should retailers expect to make to provide the best service for consumers?

Retailers must consider how adapting to consumer demands will impact employees. They’re going to need training and onboarding as part of a digital internal strategy to keep them apprised of changes and processes. Organizationally, determine how employees can best keep up with demand through efficient execution using new tools and data. They have to understand their role and what their daily workflow looks like in the new way of retail. It’s a major change management issue that requires a sound strategy to do properly.

Otherwise, the areas within implementation that will require a great deal of attention are the strategies for supply and inventory, and technology.

Consider the customer experience with every decision. Learn how customers are buying and what they expect from the experience, then map a strategy to those behaviors. For example, not long ago consumers weren’t able to buy something online and return it to the store because those purchasing streams involved different merchandisers, buyers, etc., and the systems couldn’t keep track so the products were inconsistent. Now customers expect it.

Planning the stock and inventory is going to become more important now that delivery is on a shortened timeline. This requires consideration of distribution models that ship from the store, strategically placed distribution centers around the country, or through third-party platforms. Retailers need to have visibility in a network-wide inventory that supports this process.

What should retailers keep in mind as they adapt their processes?

These adaptations are part of a strategic initiative that can’t really ever be considered finished in the traditional sense because it’s rapidly changing. It needs to be seen as perpetual improvement. Success is contingent on having an efficient supply chain that’s demand driven because consumers want to buy anywhere, any time and have their purchase shipped anywhere.

There’s a long way to go until the full cross-channel customer experience is realized. If that goal is not top of mind, it needs to be.

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