A Digital Transformation Project Lacking Any Thought for Your Customer Will Be Your Most Expensive Mistake

If you’re operating at the sharp, customer-facing end of retail, you’ll know already that you don’t only sell your product, you also sell the experience that surrounding the entire transaction.

Two years ago Marc Benioff, CEO of Salesforce told CNBC: ‘loyalty is dead’.

Since it was uttered, that irrefutable statement about consumers has only become more true. The proliferation of tech means customers are more demanding, willing and able to shift to competitors that better meet their immediate needs.

Loyalty can be brought back to life but to do so, retailers must start understanding their customers like they understand the technology they buy.

Digital transformation is a necessary process for most retailers but it’s a step in the right direction, not the solution. Retailers are being told at every turn that they must focus on ‘reducing friction throughout the customer’s purchase journey’ and ‘delighting their customers at every touchpoint’. Many see digital transformation as the best and easiest way of doing this.

Few are viewing digital transformation as a way of better understanding the nuances of new technologies and using them to enable a customer-centric business solving real-world customer problems.

Complete the experience

Almost every major retailer is experimenting with new customer experiences, but without complimenting an experience with a call to action that moves the customer journey onward, it’s pointless.Samsung opened a new type of store in New York’s Meatpacking district - Samsung 837. It’s a space that offers customers virtual reality experiences, art installations, music screenings and more. The goal is to deliver a new customer experience that enhances brand loyalty, enabled by new tech.

Online makeup company Sephora created an augmented reality-enabled smartphone app allowing customers to ‘try on’ various looks and shades in seconds, and have personalised tutorials. It’s a continuation of its original store concept of allowing customers to walk in and test and try on their own before buying, enabled by tech.

Retailers like Samsung and Sephora know that investing in VR or AR alone without a direction or clear pathway for their customers is not enough. They understand that you can attract curious eyes with new experiences, but the hearts and minds required to build and sustain loyalty needs to speak to a higher purpose in customers. Samsung and Sephora know there needs to be a thread connecting their in-store experiences and their online offer that intrigues, inspires, encourages and converts customers.

Embrace the Challenge

In an interview with CMO Craig Gorsline, a digital transformation consultant, said: “speed, scope, and impact are all operating at a different velocity than it [sic] did 10 years ago or 20 years ago. Companies face the stark reality that they can’t just augment legacy technology, there’s actually a need to work to rewire their entire enterprise.”

According to Adobe and Econsultancy’s Digital Trends in Retail Report, retailers looking to truly digitally transform must meet no fewer than eight core requirements: collaboration, culture, data, process, skills, strategy, technology, and UX design.

For any organisation, the sheer scale of the task at hand will be daunting. A survey from Gartner agrees, listing the complexity of change as one of the top six barriers to becoming a digital business.

Introducing new tech isn’t easy, but success is borne from embracing challenges, not running away and ignoring them.

Ignorance is not bliss

While retailers need to adopt digital at the core and rebuild their services around emerging technologies, many retailers are being side-tracked by glitz and glamour. The most successful retailers - those that you’d hold up as having gained the most from digital transformation - understand technology isn’t the be all and end all of digital transformation.As reported in ZDNet, only 35 per cent of companies study how technology is impacting consumer shopping behaviours when implementing their digital transformations. According to Brian Solis, a principal analyst at Altimeter Group, this underscores the fact that many organisations appear to be implementing technology without understanding why.

Tech enables that basic fundamental of retail - customer service, but without a proper plan in place to utilise it to its full extent, it could create more problems than it solves.

Data enables great customer service

Harry Selfridge was among the retail legends at the beginning of the last century to holistically embrace the age-old maxim “the customer is always right”. The fundamental meaning behind the statement remains a retail constant even in this digital age - always put your customer’s needs first.

One of Amazon’s latest initiatives, Amazon Go, is a prime example of this. It’s a cashier-free store where shoppers log into a smartphone app, load up on groceries and walk out. Cameras and sensors around the store record what customers take and are automatically billed online.

Amazon Go offers a great experience, but as Forbes points out, its real value lies in the reams of data gathered in the process. Every element of consumer behaviour is mapped and crunched to help Amazon further improve its services and become more relevant to its customers. It may be tech-enabled, but it’s really all about understanding the customer – the same as it’s always been.

People are still keyIn a PWC study, 43 per cent of shoppers said they don’t believe digital experiences will remove the need for humans employed by retailers. For PWC, retailers that set out to achieve digital transformation are ‘asking the wrong question’ - they should be pursuing a wider transformation which combines technology and people.

According to a McKinsey report on Skill Shift, Automation and The Future of The Workforce, demand for technological skills will rise 55 percent by 2030. With digital skills gaps noted as a major concern for all businesses, retraining existing employees is a critically important element of successful transformations.

A survey of major retail brands from Retail Week and PWC noted that retailers should focus on existing employees in order to maintain loyalty and utilise their experience. As the publication says: ‘while passion can’t be taught, new skills can’.

However, training must extend beyond the technical to reinforce the ultimate goal of digital transformation: being customer- centric.

Writing for Forbes, Nikki Baird provides sound advice for how retailers can do just that: “The value of innovation projects comes from how quickly...data can be turned into insights, and how quickly those insights can be turned into actions. It’s those actions that ultimately drive the return on investment, by creating new services for customers, new kinds of engagement, or capitalising on insights into what customers want by more closely meeting their needs”.

Retailers need to keep in mind that digital transformation is a change only in method, the aim remains the same: providing customers with better experiences than your competitors. And while technology choices will be important in achieving this goal, so too will be training your employees and empowering them to excel in their work. Tech will only enable better customer service, employees are imperative in delivering it.

Digital transformation is indeed a daunting task but only if you don’t understand the correct first step; upgrading the capability of your employees in terms of both digital skills and confidence to engage with customers as human beings with needs, rather than simply as data.