Digitisation is a topic we have covered a number of times (what software company hasn’t, right?) but one thing we have never considered is whether or not digitisation is here to stay.
What is digitisation in the retail industry?
“Digitisation” covers a broad range of topics and implementations. In retail terms, it can mean factory automation, internet enabled in-store kiosks or AI, to name but a few. Online stores and the use of social media are strategic digital tools adopted long ago by the retail industry, giving most retailers a foot on the digital ladder.
Whilst we are buying as many clothes as ever, there is no doubting that footfall into stores is decreasing, with March 2018 delivering the sharpest drop in footfall for eight years. More and more consumers are looking to digital channels when making their purchases. The increased speed of digitisation has been attributed to exponential technological advances, great consumer power and increased competition. If retailers fail to adapt to the changing market they may find themselves on the wrong side of competitive advantage.
The benefits of digitisation
It is essential that the rate of customer facing digitisation is reflected in a retailer’s internal processes. One benefit that many retailers are keen to gain from digitisation is the ability to shorten lead times through a reduction in sourcing time, faster production lines and quicker, more efficient deliveries. The move from manual to digitised supply management processes provides retailers with a multitude of benefits: real-time data, audit reminders, order tracking and evidence of legislation compliance, as well as increased speed to market.
Digitisation doesn’t need to be difficult
The move to digital doesn’t need to be disruptive. In a recent blog article, Vasileios Kospanos discussed the number of modern myths and misconceptions that we have fallen victim to and how business and technology are far from exempt from these rumours. Kospanos points out that there is tendency to believe that big problems require big solutions when this usually isn’t the case: “sometimes the smallest innovation can far exceed its original cost or purpose for implementation”. One change in a large process can make a huge amount of difference, at both an operational and financial level. Small changes can deliver big results.
VF’s Sustainability Director for the EMEA region at VF Corporation Anna Maria Rugarli described digitisation as one of the “next frontiers of innovation”, noting digitised production processes can cut waste by 30% in comparison with traditional manufacturing methods. So, it looks as though digitisation is here to stay and it’s time for retail to evolve to keep up.