This document discusses digital transformation trends in the retail sector based on surveys and case studies from Econsultancy. It finds that retailers are focusing on optimizing the customer experience across channels through personalization, data-driven marketing, and blending digital and physical touchpoints. Emerging opportunities include video marketing, internet of things, artificial intelligence, and leveraging new technologies like chatbots to enhance customer conversations. Overall, digital transformation requires taking a customer-centric approach and redefining organizational culture to maintain relevance in an increasingly connected marketplace.

1. Copyright © Econsultancy
September, 2016
Digital Transformation in the Retail
Sector: Trends, Data and Case Studies

2. Who am I?
2
Seán Donnelly
Senior Research Analyst
sean.donnelly2@mail.dcu.ie
@seanog1982
“if we knew what is was we were doing, it
wouldn't be called research”

3. • 20,000 customer journeys / 1,000 brands.
• Digital touchpoints - 20% annual increase.
• ‘Zero moment of truth’.
• Delivering the right message, right time, right
channel.
Challenges connecting to digitally empowered consumers
3
Source: Brand success in an era of Digital Darwinism, McKinsey Quarterly, February 2015

4. 4
Big themes
• Customer-centricity
• Solution focused
• Keep it simple
• Mobile
• Digital to enhance physical
• Personalisation
• Blending digital/physical
• Cultural transformation
• Data-driven marketing
https://econsultancy.com/reports/digital-
transformation-in-the-retail-sector/

5. Single most exciting opportunity in 2016
04 February 2021 5
1%
2%
4%
4%
5%
6%
8%
10%
11%
20%
29%
0% 20% 40%
None of the above
Video to increase brand engagement
Location-based services that add place and time to the customer relationship
Internet of Things / connected devices
Social marketing
Using marketing automation to increase efficiency and yield
Reaching and understanding mobile customers
Creating compelling content for digital experiences
Cross-channel marketing
Data-driven marketing that focuses on the individual
Optimising the customer experience
Source: Econsultancy/Adobe Digital Trends Survey 2016

6. Contextualising Customer Experience
04 February 2021 6

7. Competing on Customer Journeys
04 February 2021 Source: https://hbr.org/2015/11/competing-on-customer-journeys 7

8. “If I knew I was going to be so lucky being nice
to customers I would have done it sooner!”
04 February 2021 8

9. 04 February 2021 9

10. Personalisation
04 February 2021 10

11. Top digital priorities for 2015 versus 2016
04 February 2021 11
Source: Econsultancy, Quarterly Digital Intelligence Briefing:
2016 Digital Trends (Retail Split)

12. Personalised
advertising
04 February 2021 12
https://econsultancy.com/blog/67606-how-o2-achieves-creativity-through-data/

13. Social Media
13

14. Content optimization - Segmenting nervous and confident buyers
Source: Real-Time Marketing Report
Econsultancy econsultancy.com/transformation 23

15. Segmenting nervous and confident buyers
Source: Real-Time Marketing Report
Econsultancy econsultancy.com/transformation 24
On average there is a 26%
uplift in conversion
rate coming from real time marketing

17. Blending digital / physical
04 February 2021 17

18. More than £150bn of retail sales are
now influenced by digital, and that
retailers whose services don’t meet
customers’ expectations could lose
more than £12bn a year.

19. 19
Customer ‘journey’ and ‘touchpoint’ maps are
crucial – multi-channel

20. AO.com adopting a customer centric approach
• Source: https://econsultancy.com/blog/66768-ao-com-the-best-ecommerce-experience-available-online
• Source: https://www.econsultancy.com/blog/67942-how-ao-com-succeeds-by-focusing-on-people-culture-customer-service
20

21. AO.com taking a customer centric approach
• “We put you, our customers, at the heart of everything we do……”
• Strong voice of the customer programme
• Customer service proposition
• Internal processes
• Optimised UX
• Multi device experience
• Trust signals
• Customer control
• Bespoke delivery
• Package tracking
• Price match promise
• Contextual multi device experience
Econsultancy https://econsultancy.com/blog/66768-ao-com-the-best-ecommerce-experience-available-online 17

22. Audiences are agile
04 February 2021 22

23. 04 February 2021 23

24. 24
Blending physical and digital
E-receipts
Becoming more
widespread and
working well.
Mothercare: within 6 weeks of e-receipt launch stores became a bigger
source of customer data than the website. In 6 mths built a database of
650,000 active loyalty club members who’ve given a due date/child DOB.

25. Blending physical and digital
Made.com showroom
Tablets to enhance
physical; personalised
look-books
25

26. Blending physical and digital
L'Oréal Magic mirror app
Lets user see what they
look like without applying
the products.
26

27. 27

28. Communicating mannequins
04 February 2021 28

29. 29
The evolution of omnnichannel customer
experience
1. Join up data and systems, then…
2. Deliver experiences that are consistent, synced and
responsive across devices/channels, then…
3. Make them personalised, proactive and contextual
4. Clear ownership of omnichannel
“The era of living services”
FJORD

30. Cultural transformation
Digital transformation – the teenage years
04 February 2021 30

31. 31
Digital Transformation
• The journey towards being a digital
organisation
• “Digital” means:
• Focusing on the customer experience
irrespective of channel
• Having a digital culture

32. Source: Econsultancy, Organisational Structures and Resourcing Best Practice Guide
• 2,899 Chief Digital Officers globally (LinkedIn)
• 2,150 Chief Customer Officers globally (LinkedIn)
Redefining culture – who is in charge?

33. Who is in charge?
04 February 2021 33
9% 7% 9% 8%
29% 30% 28%
33%
27% 28% 29%
28%
26%
24%
25% 23%
9% 11% 9% 8%
2015 2016 2015 2016
We have the analysts we need to make sense of
our data
We have a good infrastructure in place to collect
the data we need
Strongly disagree
Disagree
Neutral
Agree
Strongly agree

34. The importance of culture
The Zappos Family Core Values
• Deliver WOW Through Service
• Embrace and Drive Change
• Create Fun and A Little Weirdness
• Be Adventurous, Creative, and Open-Minded
• Pursue Growth and Learning
• Build Open and Honest Relationships With
Communication
• Build a Positive Team and Family Spirit
• Do More With Less
• Be Passionate and Determined
• Be Humble
AO Core Values
• Bold - We have the courage to try. We think in an
unconstrained way to go beyond conventional limits.
• Caring - Genuine people make the difference.
You can’t pay people to care.
• Driven - We are relentless - we deliver what others can’t.
We don’t give up and do whatever it takes.
• Fun - If you enjoy what you do, you do it better.
Work is serious and we do it with a smile on our face.
• Smart - We find the best way.
We are smart through understanding and innovation.
34
“Culture eats strategy for breakfast.” - Peter Drucker
https://econsultancy.com/blog/67942-how-ao-com-succeeds-by-focusing-on-people-culture-
customer-service/

35. 04 February 2021 35
Data-driven marketing a key
focus for the future

36. Disparate data sets a key challenge
• Only 29% of marketers claim to have a Single
Customer View (SCV).
• Only 17% of marketers claim they are fully
capable of understanding customer journeys.
36
Source: Econsultancy, Quarterly Digital Intelligence Briefing:
Multichannel Reality, September 2015

37. Most exciting opportunity in 5 years time
04 February 2021 37
0%
2%
2%
4%
5%
8%
9%
9%
13%
21%
27%
0% 20% 40%
Other
Video to increase brand engagement
Cross-channel marketing
Social marketing
Location-based services that add place and time to the customer relationship
Using marketing automation to increase efficiency and yield
Reaching and understanding mobile customers
Creating compelling content for digital experiences
Internet of Things / connected devices
Optimising the customer experience
Data-driven marketing that focuses on the individual
Source: Econsultancy/Adobe Digital Trends Survey 2016

38. 38
https://econsultancy.com/reports/the-multichannel-reality
Campaign integration is a challenge

39. Proportion of company respondents saying they’re confident in their ability to
measure these
04 February 2021 39
20%
23%
29%
31%
41%
43%
18%
21%
29%
30%
42%
41%
Return on offline ad spend
Return on investment for offline marketing programs
Return on investment for mobile marketing programs
Return on mobile ad spend
Return on investment for digital marketing programs
Return on digital ad spend
Econsultancy / Adobe Quarterly Digital Intelligence Briefing
2015
2016

40. Looking ahead
04 February 2021 40

41. Internet of things - the new eyes and ears of
customer experience
• 26BN (Gartner)
• .. 50BN (Cisco)
• ….200BN (Intel)
41

42. For Marketers, IoT may seem geeky at first….
04 February 2021 42
Source: HBR Nov 2014, Michael E. Porter “How Smart, Connected Products
Are Transforming Competition”

43. …but scary at the end.
04 February 2021 43
Source: HBR Nov 2014, Michael E. Porter “How Smart, Connected Products
Are Transforming Competition”

44. 04 February 2021 44

46. Artificial Intelligence
04 February 2021 46

47. 47
Realtime (synchronous), contextual
(location aware etc), personalised,
natural language, image recognition,
responsive...
AKA
A conversation.

48. 04 February 2021
Facebook M

49. 04 February 2021
1-800 Flowers – order from Facebook Messenger

50. 04 February 2021 50
Human skills
https://econsultancy.com/reports/skills-of-the-modern-marketer/

51. The next frontier in all marketing

52. Final thoughts
• Customer experience is the big focus for at least a few years to come
• Optimising customer journeys across channels will be a big part of this
• Right data
• Right place
• Right time
• Lasting relationships
• More sophisticated organisations will be enhancing experiences through
personalisation and data-driven marketing / marketing automation
• “Always be on the lookout for the next thing that could kill you……”
04 February 2021
52

53. All rights reserved. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic or
mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in
writing from the publisher. Copyright © Econsultancy.com Ltd 2014.
Thank you
sean.donnelly2@mail.dcu.ie
@Seanog1982