New research from Fujitsu has found a severe lack of direction behind UK retailers’ digital transformation project, which is “costing them dearly”.
Almost three quarters admit to undertaking projects not linked to the overarching business strategy. As a result, retailers are still struggling to get digital right and have spent approximately £827,000 on projects which failed, and £663,000 on projects which were cancelled.
Unfortunately, almost six in ten retailers revealed that this cost has put them off pursuing digital projects in the future, according to Fujitsu’s Digital Transformation PACT Report.
With digital disruptors entering the market, 84% of retailers acknowledged that they need to digitally transform and agree that the ability to change will be crucial to their business’ survival in the next five years. In fact, 16 per cent named new entrants into the retail space as the most influential factor driving their digital transformation. However, at present over half say that they are facing challenges including a clear lack of digital skills in the organisation.
All of the retailers surveyed admitted that customers expect them to be more digital.
“Retailers face pressures from customers, competitors and new digital disruptors entering the market, which has them running from all sides to try and compete. However, many retailers have undertaken projects that have ultimately failed,” said Jat Sahi, Digital Lead Retail, EMEIA at Fujitsu.
“This has so far cost them a significant amount of money and subsequently left them with a reluctance to pursue new projects. The number of failed and cancelled projects should be nearly zero if they used modern approaches, but what’s been made evident is that they are lacking the right components to make their digital transformation plans a success.”
According to Fujitsu’s study, retailers need to balance the four elements of People, Action, Collaboration and Technology to ensure digital transformation success. Only by focusing on all four strategic elements will retailers be able to innovate successfully and see the benefits to their bottom line, employees and their customers.
Sahi continued: “Retailers cannot brush off the impact digital disruption is having and is going to have on their business, as, when implemented with the right strategy, there can be significant rewards. Retailers themselves are not inherently digital experts and innovators; they need external expertise to help them realise their digital vision and bring it to life.
“Making the most of digital requires more than just the latest tools. Retailers need the right skills, processes and partnerships to ensure that the technology they are implementing has the right people and strategy behind it to see success.”