by Dan Hartveld

The big picture – what the landscape looks like right now for CIOs building the digital store

Mar 01, 2018
Digital TransformationIT StrategyTechnology Industry

When you’re trying to home in on the technology and data initiatives that really make a difference, take a look at what’s actually happening around you, day in, day out.

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Credit: Thinkstock

CIOs, strategists and IT specialists all have their own ideas about what they can learn from previous projects and where they think the business should be heading in the future, but the only way to get the big picture is to stand back and take in an objective view of today’s state of play.

Looking good

Retailers are facing huge challenges and may not be able to overcome their difficulties without a drastic turnaround. This message is now a regular theme in industry and national publications alike, and the recent collapse of Toys R Us, Maplin and others shows what happens to retailers that neglect their in-store offering and allow more tech-focused retailers to take their market share.

While this is true for retailers who still have their heads firmly buried in the sand when it comes to significant developments such as GDPR and the ever-expanding online shopping universe, the good news is that those with switched-on CIOs and forward-thinking IT departments are ready, willing and able to take the steps needed to transform their business. According to RSR research, 75% of retailers believe that in-store tech helps them to compete with the online experience, and 52% are ready to commit budget to getting new technologies rolled out to stores.

Forrester backs this up – according to its report on the state of the digital store, 62% of surveyed retailers have invested in mobile devices for store associates to assist customers in-aisle, while a recent AI study revealed that 88% of retailers believe that it will reinvent the retail industry and 42% are currently piloting, implementing or expanding their AI initiatives. It has also noted a shift among tech-aware retailers towards CIOs taking a lead position in shaping their digital strategies to confront competitive risk, indicating that businesses have woken up to the all-round benefits of pooling data to make their digital store a reality.

Needs work

It’s clear that retailers have come to terms with AI as a concept, but as with all leading technologies, making it part of business reality is another matter. There’s a lack of confidence in its security and ability to support business as usual – machine learning and cognitive commerce are huge, complex technologies which have the potential to change the way we work, rest and play, and the rules of engagement have yet to be written. Research commissioned by marketing platform company Emarsys laid bare the fears of the C-suite – 63% of surveyed companies didn’t think they could find a compatible technology and service provider to support an AI strategy, 66% saw a lack of technical skills among internal staff as the biggest barrier to AI adoption and 65% said they did not have the product management skills required for managing the ongoing and incremental innovation of AI.

However, of the retailers that have taken the leap of faith, the majority have seen immediate benefits. From Gap and its robot-enhanced warehouse management to Tesco’s adoption of AI for shelf stocking and logistics, they’re experiencing increased efficiency, better use of data and more accurate stock management.

Fallow ground

It’s 2018, more than 80% of us have smartphones in the UK alone, and more than 50% of us are actively using them in-store. Yet some retailers are still reluctant to commit to a cross-business mobile strategy. Forrester discovered that ‘too few organizations coordinate mobile across functional groups. Only 20% of executives who either own or have extensive involvement in their company’s mobile strategy and services say they have a mobile steering committee, and only 16% say they have a mobile centre of excellence.’

As mobile capabilities are central to every aspect of the digital store, which in turn is central to remaining relevant to today’s shoppers, this should be troubling to the CIOs of those without a universal mobile strategy – they’re certainly not currently competing with their rivals and will find it hard to catch up. Retail analyst Kate Hardcastle reinforced the point, referring to the issues faced by Toys ‘R’ Us: ‘To succeed you need to offer some kind of differentiating factor…that makes visiting the stores worthwhile… Toys R Us didn’t move with the times.’

And, of course, there’s the perennial problem of GDPR preparedness – according to a survey by Populus, 60% of large businesses across Europe still aren’t ready for the May 2018 deadline for legislation. It looks like a significant number are just bracing themselves to take the hit rather than do what’s necessary to bring their data under control. This kind of short-termism damages customer confidence and brings any data-based, connected retail developments to an abrupt halt.

However, varied it may be, at least the picture is clear – some of the landscape is looking great, some of it needs tidying up and a small but significant part is still wasteland. It’s a challenge for CIOs to weed and seed in the right places, but the sooner they start, the sooner they’ll see growth.