2X growth in organisations undertaking digital transformation: Kearney
While digital has been a buzzword for over a decade, the real value creation has been more recent, particularly post pandemic, stated Tamanna Padhi, Principal – Consumer Industries and Retail Practice, Kearney during her presentation at IMAGES RetailME’s debut edition of the Internet Commerce Summit (ICS) MENA.
Tomorrow’s consumers will be digital-first, curious to experience and explore more. While technology has been evolving faster than ever so are consumers. While existing business models are still playing catch up, new business models are emerging rapidly to cater to this widening gap. And companies that have invested in digital transformation are clear winners with “super normal topline growth and commensurate profitability in many cases.”
“The fundamental pillars of retail – assortment, engagement, experience, channel and fulfilment – may still be the same but digitisation has certainly disrupted each of these pillars,” Padhi observed.
For understanding:
“Therefore, connected commerce is the future at the heart of which is data and technology to understand consumer behaviour. Think about 6thStreet’s phygital store!” Padhi stated.
Another key focus area is fulfilment where overall warehouse automation is expected to go up to 80% in 2023 from barely under 25% currently. “Improving unit economics for last mile has to be a critical value add for any digital investments.”
A growing interest in the metaverse is apparent with 40% consumers globally keen to engage with retail and brand activities in the metaverse. Closer home, 1 of 2 consumers in the MENA region is keen to experience the metaverse. Brands such as Chalhoub Group are, thus, investing a lot in this area.
“Yet, several brands struggle to create value via digitisation,” Padhi pointed out. A few hindrances include lack of desired talent and organisational capabilities; organisational culture – shifting from a siloed product centric to a consumer centric culture; legacy technology architecture limiting scalability and reliability; and finally lack of ability to nurture innovation.
A successful digital transformation roadmap must, thus, include five goals: