Interviews, insight & analysis on Ecommerce

Ecommerce isn’t enough to save retailers

By Emma Robertson, CEO at digital and data consultancy ENGINE Transformation

Retail is unquestionably facing its biggest challenge of the digital age. Lockdowns have accelerated some trends, mercilessly killing off the weak. Irrespective of their success online, the digital efforts of Arcadia and Debenhams could not turn the oil tankers weighted down by rent, rates and debt.

As we emerge into the new world, the ‘pure-plays’ face a different set of challenges, as we question whether they can move the agenda from price driven convenience as consumers seek out more social value and brand purpose? Look at BooHoo’s recent challenges with its product/pricing strategy and what that said to both its customers and newly acquired brands.

At the same time, all retailers need to drive towards a more data-driven future. The successful retailers will not be those with the sharpest CRM system or best implementation of Adobe, but the ones who can become as data driven as Amazon or Google. This requires change from within.

The solution is not one size fits all – retailers find themselves at different stages of digital and data maturity, and their foundations and context all vary. Over the past 15 years we’ve developed our approach to the Formula for Transformation, having learned from the successes and challenges of the retail journey to date. This formula considers all the elements that need to come together to deliver successful change and considers them in relation to each other. Jeff Bezos famously said “Focus on your customers not your competitors”; here’s how:

Focus – define the North Star and the plan to reach it

In the past technology has often been blamed for failed digital transformations  – the big spend at the heart of the programme, over promising and under delivering, late and over budget.

Technology is easily blamed, but the challenge often starts with the strategy – or lack therein. The case to digitise can be so obvious that organisations move straight into implementation without considering what will be left behind. It’s critical to define a north star that is anchored in the business strategy – holistic, connected and integrated change starts at the top; setting the ambition and being intentional about the change that will need to follow.

Without this focus you cannot bring the organisation with you or articulate clearly why the organisation as a whole should care – and should make it happen. Lack of an integrated strategy also perpetuates the cycle of digital being on the side of the business, not integral to it. Kodac first invented the Digital Camera in 1975 but were ultimately replaced by it in a revolution they could have owned.   

Foundations – being brutally honest about your starting point

Digital transformations often fail before they begin. Organisations consistently overestimating their starting point and underestimating the journey.

Instead use “discovery” for what it’s intended for – to discover what is really going on and build a plan on solid foundations before the business case and internal commitments are made. It’s significantly cheaper to walk away from a programme after four weeks than four months… or be regretting it four years later.

Formula – getting the elements in balance to deliver your ambition

The formula for transformation is made up of six elements that come together in the right balance and combination. When that combination is right it produces energy and change; when it goes wrong you’re faced with a fizzle.

The elements are:

Brand – purpose, values, aspiration

Customer – experience, relationship, engagement

Culture – organisation, operation, culture

Technology – systems, infrastructure, innovation

Data – insight, behavioural, automated

Strategy – vision, objectives, goals

Critically, the formula is entirely contextual to where you are now, and where you want to get to.

For a traditional retailer aiming to move up the maturity curve from “having” to “being” digital, the focus could be on strategy, brand and culture. For the digitally mature retailer looking to make an impact, the formula may be weighted to data and technology.

Your formula for change should be unlike anyone else’s – and whilst they are all different, successful transformations share characteristics of being:

  • Unique – anchored in what makes you different and using digital to amplify that – not mirroring customer needs or echoing competition
  • Balanced – the elements are considered, planned and delivered according to the right ratios to deliver your ambition – meaning one element
  • Connected – holistic change that touches the whole organisation and moves up the maturity curve from sporadic change to continuous improvement

As retail emerges from the lockdown the questions of change, the importance of digital and the value of data are going to go up the agenda. The question will cease to be about what you can afford to do, and now be what you can’t afford not to do.


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