National Retail Federation (NRF) Convention and Expo – Cisco – Analysts are hailing 2016 as the best year for holiday sales growth since 2005. However, this growth is not coming from the traditional brick and mortar channel. Instead, Internet shoppers saved the holiday season by setting new records for online sales during Black Friday, Cyber Monday and Bounce back Tuesday. This has huge implications for the industry and for retailers’ 2017 technology plans.
The multi-channel shopper is fueling a wave of digital disruption that threatens to put nearly half of retailer leaders out of business if they don’t transform themselves digitally. A new research report released today by Cisco, “Reinventing Retail: Cisco Reveals How Stores Can Surge Ahead on the Digital Transformation Journey” reveals that despite the risks, retailers around the world are moving too slowly when it comes to digital transformation and may not be investing in the right places. The holiday season’s choppy sales report and the recent closing of big box stores is just the beginning.
In an effort to help retailers achieve digital transformation, Cisco previously released a “A Roadmap to Digital Value in the Retail Industry,” which guides retailers through three phases: (1) Enable digital capabilities, (2) Differentiate their brand through new digital capabilities, and (3) Define new business models through digital disruption.
To understand the progress retailers have made on that roadmap and in executing on their own digital transformation journeys, Cisco has spent the past 10 months facilitating in-depth workshops with more than 200 retail executives from North and South America and regions of Europe, representing brick-and-mortar retailers, e-commerce, apparel manufacturers, food service and other segments of retail. The new report reveals where they are on their journey to digital transformation, where they are currently prioritizing their digital technology investments and what they may not know about the flaws in their digitization strategies.
Retailers are stuck in the early phase of the digital roadmap. Retailers’ digital investment priorities remain concentrated in the earliest, “Enable” phase of the roadmap (49 percent), which is focused on more mature IT technologies that enable existing capabilities and processes, IT agility and operational efficiency.
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