Retailers stand to gain significantly by adopting digital processes so they can compete more effectively, be more agile and serve customers better.
Digital transformation provides great opportunities for retailers. A 2015 study from e-consultancy calculated that more than £150bn of retail sales are now influenced by digital. However, retailers whose services don’t meet customers’ digital expectations could lose more than £12bn a year, according to the analyst.
Traditional retailers have many advantages over web-only competitors, such as store location and the ability to give consumers a full, sensory shopping experience. But when you add an effective digital strategy, you also offer customers the added convenience of online shopping, personalisation and interactive customer service.
Digital transformation is partly being driven by more agile competition. But it’s also become a necessity in order to reach digital-savvy customers, and give them the sort of customer experience they demand – one that allows them to communicate and transact within the channels that suit them best.
But not all traditional retailers have been able to make the transition smoothly and consistently. Some are leaping ahead with digital transformation whilst others are introducing digital processes as an add-on to their existing infrastructures.
For example, many companies locate a digital experience team inside the marketing department, where their remit is to extend the types of marketing and communications channels the business can offer.
Other retailers have introduced a digital department, or enlisted a Chief Digital Officer (CDO) to oversee new digital strategy, separate from the IT team which deals with infrastructure and operations.
Whilst these efforts are laudable, this approach to digital transformation is neither ideal nor efficient. It effectively creates two separate IT organisations: duplicating efforts or confusing the transformation programme.
A better alternative to having a two-speed transformation journey is to modernise the business’s networking infrastructure, to make it more agile and responsive, through elements such as virtualisation, automation, orchestration and analytics. Cisco is one company providing the capability to do so with the Cisco Digital Network Architecture.
From this strong foundation you can then effectively improve business processes: things like customer acquisition and customer service; web and mobile collaboration and communication; and wireless services.
By deploying SDN, for example, you can support rapid policy changes that react to shifting requirements. Or, by having an open development networking infrastructure, you can develop your own tailored, integrated apps that will give you a competitive edge.
By updating your core network and adding these transforming technologies, you can create the right foundation to pilot and roll out agile IT securely and incrementally. You will also establish a united IT organisation from the ground up, and build IT confidence across the organisation.
One simple way in which retailers can transform their network is by adding a robust and secure wireless guest network. Cisco is one provider that offers both on premise and cloud managed (via Cisco Meraki) Wi-Fi.
Cisco Wi-Fi automatically optimises your network for high-density environments, giving exceptional wireless performance. You can also protect your users, data and business with strong network-based security and authenticated access that meets PCI compliance.
Cisco also has an analytics solution designed for retail, called CMX, which uses location-based services to analyse visitor behaviour and deliver personalised mobile apps. Using CMX, you can understand what customers want to keep on coming back; win customers by giving them the right information at the right time; and build loyalty with content that relates to their needs.
One business that has transformed its network with Cisco CMX and Digital Network Architecture (DNA) is real estate management company Santana Row.
The Cisco solution provides Santana Row with real-time insights and analytics to help it to deliver a better online and instore experience for its customers. By evaluating customer behaviour and usage patterns, it is able to tailor its services, which helps its shop, restaurant and office partners.
Another retailer that has benefited from Cisco DNA is 2, a pure-play e-commerce firm. Moving to a software defined network has enabled Backcountry to raise its efficiency and lower its capital costs. The network is now easy to manage and maintain, with sophisticated dashboards and network automation features that have freed up senior IT staff to grow the business.
Cisco DNA has also given Backcountry easy access to advanced analytics that help it to understand customer behaviour better. It has gained the capacity to act on those insights, rather than spending time capturing information.
There are many opportunities available for retailers to transform their processes. However, the way to achieve lasting digital transformation is not by operating a separate digital unit, or by giving the responsibility for transformation to the marketing department. True transformation comes from modernising the IT networking infrastructure in a controlled and incremental way, and building on this strong foundation to effect change across the business.