Retailers Should Look To Digital Transformation To Thrive In A Down Market

Cofounder and CEO of Zipline, a company that helps brick-and-mortar stores streamline communication and task management.

There’s a curious trend happening in consumer spending right now. Despite the highest level of inflation in several decades, there hasn’t been a meaningful pullback in spending. Still, if stock prices are any indication, the operating environment is bumpy and conservatism has come to corporate boardrooms.

As select companies turn to hiring freezes and cost-cutting measures in fear of the worst, other operators with strong balance sheets are using this moment of macroeconomic uncertainty to make strategic moves that will allow them to exit this downturn poised to reach new levels of commercial traction.

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A Harvard Business Review article states now is “not the time to slow digital transformation.” Volatility creates new challenges that often require new solutions. Not every company is positioned to accelerate capital expenditures, but for those fortunate to be considering digital transformation projects, it’s an investment sure to serve them well in the years ahead. Here are five ways digital transformation help build the business case.

1. Boost responsiveness in a turbulent market.

The pandemic altered long-standing customer behaviors. Grocery chains with curbside pick-up or home delivery option made years of customer acquisition gains in mere months. Those that didn’t have a touchless delivery solution in place found their stores to be in a position of having to navigate pandemic processes without the luxury of a technical learning curve.

Introducing a tech platform that can inform and align field teams can assist in driving better agility by making it easier to communicate and also ensure a new method of purchase, payment or last-mile fulfillment online can be completed. With a solution in place to drive operational excellence, brands can be sure they’re ready to tackle new initiatives as they’re rolled out.

2. Improve internal communications.

In Q1 of this year, CEO exits have increased by 29% from 2021. As management teams are modified, the trickle-down impacts are felt throughout the organization. During times of change, stabilizing the sentiment with internal stakeholders is an important first step in diffusing day-to-day hiccups. With the right digital systems, leaders have what they need to navigate difficult times and address teams when challenges arise.

With the right digital systems, leaders have what they need to address teams when challenges arise. For example, grocery stores can send videos to store associates or quick push notifications to help everyone get on the same page. Feedback loops can be made faster and more direct while critical customer initiatives are delivered with lower latency.

3. Capture customer insights.

I find that the earliest indicators of smash success or commercial concern often occur in store environments or with field sales reps. Capturing and sending these signals back to divisional managers or regional marketing teams used to be ad hoc for retail sales associates. By introducing a system to escalate important observations, corporate leaders can ensure that critical decisions impacting product, operations and customer service leverage front-line feedback.

4. Increase the ROI of other technology.

Today might be the golden era of retail-tech transformation. The IT budgets of nearly all large retailers include dollars directed to point-of-sale upgrades, retooled logistics systems, enhanced clienteling and everything in between. Implementations are lengthy, expensive and often run by external project managers.

Adding a digital platform focused on sharing status updates helps everyone stay informed as these highly visible projects progress. Assigning roles, pushing out training modules and sharing user tips are a few ways that forward-thinking retailers are using digital transformations to ensure that every dollar of IT investment generates the highest possible return.

5. Build employee confidence.

Labor markets remain fiercely competitive. During times of talk about corporate layoffs and non-ending news cycles about surging interest rates, dual concerns over job security and stretching household budgets keep many employees stressed about staying afloat. Messages from the top that the business is investing in new ways to operate as one team and improve results can increase employee confidence. When all team members have the same information, everyone can connect to the bigger picture. People see progress that was formerly opaque. The flywheel of improvement inspires an enviable esprit de corps. As the energy level rises, cultural capital–a powerful brand differentiator–can be created.

Implement digital transformation at your company.

Digital transformation is the key to growing, adapting and ensuring agility in changing times. Brands that can successfully stand up to new technology can help create a better shopping experience for their customers, a better work environment for their employees and a better balance sheet for their investors.

But with so many new technologies promising transformation, where should retailers start? Leaders should identify pain points by talking to their team members, especially on-the-ground associates, about areas of potential concern. Store employees can often highlight the potential root cause of a brand’s issues, given their close relationship with customers and day-to-day operations.

When searching for digital solutions to address a retailer’s needs, it’s vital to research not only prospects that enhance the retailer’s bottom line but also the employee and customer experience alike. Employees must also see the value in new tools if a retailer expects them to embrace them fully. Organizations can accomplish this through training, associate (peer-to-peer) testimonials and adoption incentives.

It’s difficult to predict exactly what tomorrow will look like for customers and retailers alike, but it’s a sure bet that an investment in the appropriate digital tools will pay dividends in the years ahead.


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Retailers Should Look To Digital Transformation To Thrive In A Down Market

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