Digital Transformation Benchmark - 2012Insights for the Retail Industry
Digital Transformation in the Retail IndustryStarting with the arrival of eCommerce in the late 1990’s, few industries hav...
an opportunity to explore newmodels that would take betteradvantage      of   cross-storecollaboration.Figure 2: worker en...
Learning 3: Retail’s vision for                                                                        initiatives       w...
Our survey data shows that some companies in the retail industry are currentlytransforming the customer experience and enh...
Acknowledgments We would like to extend our sincere thanks to the executives who took the time to respond to our survey. C...
About Capgemini   Capgemini Consulting is the global strategy and transformation                   With around 120,000 peo...
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Digital transformation benchmark 2012 insights for the retail industry

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Digital transformation benchmark 2012 insights for the retail industry

  1. 1. Digital Transformation Benchmark - 2012Insights for the Retail Industry
  2. 2. Digital Transformation in the Retail IndustryStarting with the arrival of eCommerce in the late 1990’s, few industries have had as much experience withdigital disruption as retailers. Still, after a decade of managing digital competitors and changing customerexpectations, the retail industry faces fresh challenges. mCommerce (mobile) and sCommerce (social) are thelatest incarnations of digital disruption in the industry, and some players have already begun leveraging thesetechnologies. Figure 1: firms’ positioning in the Digital Maturity Matrix Interpreting the Digital Maturity Matrix • The vertical axis measures “Digital Intensity,” i.e. firms’ digital practices • The horizontal axis measures “Transformation Management Intensity,” i.e. the management practices implemented by the firms around digital transformation For more information, read the MIT Center for Digital Business and Capgemini Consulting Research Report “Digital Transformation: a Roadmap for Billion-Dollar Organizations” (2011) Asia & Oceania North America Northern Europe Southern Europe Average Learning 1: The focus for retailers personalize marketing is on the customer experience, communications (54%). less on operations or collaboration Overall, retailers have done less in operational applications of digital. Companies that responded to our Relative to other industries, they survey highlighted customer reported lower scores for digital relationships and revenue growth employee collaboration, remote as two areas where they perceive working and executive Digital Transformation most communications. Similarly, many impacting their performance. retailers are not using Accordingly, retail firms are using technologies like instant digital technologies to personalize messaging or video conferencing the sales experience and enable to improve operational processes. customer self-service. A majority This may reflect the current of companies also highlighted priority of the “store floor” and using analytics to target marketing autonomous local staff (see Figure more effectively (65%) and to 2). However, it may also present Page 1
  3. 3. an opportunity to explore newmodels that would take betteradvantage of cross-storecollaboration.Figure 2: worker enablement 31% Our employees can collaborate 58% digitally with their colleagues as Copyright © 2012 Capgemini Consulting and MIT-CDB. All Rights Reserved 15% needed 72% 31% When appropriate, our employees 54% can perform their work duties from----- RET - Figure 12 ----- 20% any location 69% 46% Digital technologies improve 35% communication between senior 20% executives and employees 64% 65% Our employees actively share 27% knowledge through collaborative 43% community platforms 35% Legend: • Red bars represent the percentage of companies disagreeing with each statement (answers 1, 2 and 3 on a scale from 1 = strongly disagree to 7 = strongly agree) in the industry; green bars represent the percentage of companies agreeing with each statement (answers 5, 6, or 7). • Grey marks represent disagreement (answers 1, 2 or 3) or agreement (answers 5, 6 or 7) across all companies in our study.Learning 2: The industry’s Digirati represent entirely new channelsleverage social media and mobile for retailers or, at the very least,with customer more than other important components to considerretailers in an integrated, cross-channel customer experience. As noted inOverall, retailers appear to be Capgemini’s 2012 Digital Shopperusing social media and mobile at Relevancy Report, 60% of digitalleast as much as other industries. shoppers continue to expect aIn each measure of how retail cross-channel experience thatfirms use these technologies with includes physical channels.customers, scores were slightlyhigher than cross-industry Integrating mobile and socialaverages. Yet, only about a third media into that cross-channelor retailers are using mobile with experience may present ancustomers, and less than half use opportunity for retailers.social media for tasks other than According to our study, it appearsmonitoring reputation or that some retailers have alreadypromoting products/services. begun making headway in building cross-channel consistency, withThe retail industry’s Digirati are scores slightly higher than theusing social media and mobile cross-industry average.considerably more than otherfirms. This suggests that bothmobile and social media could Page 2
  4. 4. Learning 3: Retail’s vision for initiatives within theirradical Digital Transformation is organizations are clearly defined.often limited Yet, most retail companies did not say they had a vision that wasSome retail companies have clear radical, shared among seniorplans for Digital Transformation. executives or integrated across56% of the companies surveyed organizational units (see Figure 3).reported having a high-level digital This suggests that many retailroadmap – 13 percentage points companies are prepared to deliverhigher than the cross-industry a digital vision that is moreaverage. More than half said that evolutionary or siloed thanroles and responsibilities for digital transformational.Figure 3: digital vision 46% Senior executives have a digital 25% transformation vision that involves 44% radical changes 32% Copyright © 2012 Capgemini Consulting and MIT-CDB. All Rights Reserved 36% Senior executives share a common 36% vision of how the business should 34% change through digital technologies 46% ----- RET - Figure 14 ----- 32% 56% There is a high-level roadmap for digital transformation 38% 43% 46% Senior executives have a digital 38% transformation vision that crosses 37% internal organizational units 43% 38% Senior executives and middle 38% managers share a common vision of 44% digital transformation 34% Legend: • Red bars represent the percentage of companies disagreeing with each statement (answers 1, 2 and 3 on a scale from 1 = strongly disagree to 7 = strongly agree) in the industry; green bars represent the percentage of companies agreeing with each statement (answers 5, 6, or 7). • Grey marks represent disagreement (answers 1, 2 or 3) or agreement (answers 5, 6 or 7) across all companies in our study.Learning 4: New business models that were previously unreachablefocus on enhancing the industry’s with traditional approaches. Mostcore business of physical channels retailers have been able to launch new businesses based on digitalOnly 27% of companies reported technology, yet companiestransitioning from physical to observed less cannibalization thandigital products and services average. This suggests that new,(versus a 45% average across all digital business models areindustries). Instead, digital complementing (rather thantechnologies allow most retailers competing with) retail’s coreto connect with new customers business. Page 3
  5. 5. Our survey data shows that some companies in the retail industry are currentlytransforming the customer experience and enhancing their core businessmodels through Digital Transformation. Our analysis reveals some additionalareas for retail firms to consider in developing their digital maturity: - Reassess vision – Many retailers that responded to our survey did not recognize a “vision that involves radical changes” within their firms. They also did not show strong responses for that vision being shared among executives or integrated across the business. Moving forward, retail firms may want to review their vision for Digital Transformation, either to validate that they are on the right path or to develop greater consensus around a leading-edge vision of the future. - Leverage social media and mobile with customers – The retail industry’s Digirati leverage social media and mobile technologies with companies more so than other firms in the industry. This may be evidence of opportunities for other retailers to begin using these technologies to enhance the customer experience. - Develop consistency across channels – According to Capgemini’s 2012 Digital Shopper Relevancy Report, customers expect an integrated channel experience that includes traditional physical channels. Building on established work in cross-channel consistency could prove an important factor for success. - Enable internal collaboration – Retail firms today show below-average usage of digital collaboration, knowledge sharing, or tools like instant messaging to enhance operations. This may reflect a store-centric model of internal operations. However, given the geographic spread of many retail firms, there may be potential to leverage these practices and tools to enhance operations and worker productivity. Page 4
  6. 6. Acknowledgments We would like to extend our sincere thanks to the executives who took the time to respond to our survey. Contacts For more information, please contact: GlobalEmmanuelRILHACemmanuel.rilhac@capgemini.com Belgium China Finland France IndiaRobert Nongfei Sami Laurence RomainVAN DER EIJK ZHU FINNE JUMEAUX DELAVENNErobert.van.der.eijk@capgemini.com nongfei.zhu@capgemini.com sami.finne@capgemini.com laurence.jumeaux@capgemini.com romain.delavenne@capgemini.com Netherlands Norway Spain Sweden USAArmijn Steinar Fernando Anneli KenBEEK SIMONSEN RODRIGUEZ SAMUELSSON TOOMBSarmijn.beek@capgemini.com steinar.simonsen@capgemini.com fernando.rodriguez@capgemini.com anneli.samuelsson@capgemini.com ken.toombs@capgemini.com United Kingdom Germany, Switzerland, Austria MENAMichael Ralph JawadPETEVINOS BECKER SHAIKHmichael.petevinos@capgemini.com ralph.becker@capgemini.com jawad.shaikh@capgemini.com About the Research on Digital Transformation This analysis is based on data collected during the second year of our joint research program with the MIT Center for Digital Business. For more information about the research, please contact: • Didier BONNET Managing Director and Global Head of Practices at Capgemini Consulting didier.bonnet@capgemini.com • Patrick FERRARIS Global Leader of the Technology Transformation Practice within Capgemini Consulting patrick.ferraris@capgemini.com
  7. 7. About Capgemini Capgemini Consulting is the global strategy and transformation With around 120,000 people in 40 countries, Capgemini is one consulting organization of the Capgemini Group, specializing of the world’s foremost providers of consulting, technology in advising and supporting enterprises in significant and outsourcing services. The Group reported 2011 global transformation, from innovative strategy to execution and with revenues of EUR 9.7 billion. Together with its clients, Capgemini an unstinting focus on results. With the new digital economy creates and delivers business and technology solutions that creating significant disruptions and opportunities, our global fit their needs and drive the results they want. A deeply team of over 3,600 talented individuals work with leading multicultural organization, Capgemini has developed its own companies and governments to master Digital Transformation, way of working, the Collaborative Business ExperienceTM, and drawing on our understanding of the digital economy and draws on Rightshore®, its worldwide delivery model. our leadership in business transformation and organizational change. Learn more about us at www.capgemini.com. Find out more at: http://www.capgemini-consulting.com/ Rightshore® is a trademark belonging to CapgeminiCapgemini Consulting is the strategy and transformation consulting brand of Capgemini Group. The information contained in this document is proprietary.© 2012 Capgemini. All rights reserved.

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