Retail leaders determined to disrupt and create sustainable competitive advantage will engage in digital transformation (DX). They will recognize that digital transformation is much more than applying incremental technologies at the edge to create new experiences. Digital transformation requires holistic redesign of business strategy/leadership, business processes, human engagement (workforce and others), information monetization, and technology.
The shift is exponential. More than requiring social, mobile, big data/analytics, and cloud technologies, transformation requires new ways of working and new ways of putting IT to work. More important still, sustaining competitive advantage requires reinvention at two levels — the microlevel of performing tasks and macrolevel of designing and executing strategy. Success at both levels of disruption will require the appropriate amalgam of innovation accelerators — artificial intelligence (AI)/cognitive intelligence, augmented reality (AR)/virtual reality (VR), robotics, advanced security, 3D printing, and IoT. They will be at the center of new experiences for employee and customer engagement, business model disruption, the nature of work itself, and ultimately business growth.
While the predictions offered here largely focus on the near term to midterm (2017–2020), the impact of many of them will be felt for years to come. Most of our predictions refer to a continuum of change within the wider ecosystem of the retail industry and global economy.
Below are the top 10 predictions for worldwide retail from IDC Retail Insights:
- Prediction 1: By 2019, Digital Transformation Investments Will Triple, Drawing Funds Away from Store Capital and Profoundly Changing the Retail Industry
- Prediction 2: In 2017, No Less Than 40% of New Retail Applications Purchased Will Be Deployed in the Cloud to Speed and Secure Business Objectives
- Prediction 3: By 2018, 30% of Major Retailers Will Adopt an Omni-Channel Digital B2B2C Commerce Platform, Improving Customer Experience, Process Efficiency, and Inventory Management
- Prediction 4: A Surge in Cybersecurity Breaches Will Result in a 20% Escalation of Spending on Managed Services by 2018
- Prediction 5: Retail Mobile Enablement Will Triple Mobile Investments in 2017and Double Spending on Wireless Infrastructure Through 2019
- Prediction 6: Intelligent Assistants Will Become a Must-Have App in 2017 and Support Shoppers' "Jobs to be Done" in Context-Aware Omni-Channel Conversations by 2018
- Prediction 7: By 2019, Robotics and IoT Technologies Will Increase In-Store, In-Warehouse, and In-Distribution Center Productivity by 1.5x for Early Adopting Retailers and by 3x for Later Adopters
- Prediction 8: By 2019, 20% of Major Retailers Will Use AR to Enrich the Product Selection Experience and Convert Shoppers to Buyers Three Times Faster
- Prediction 9: By 2018, Retailers Will Pursue Alternatives for Secure Networks That Protect Data and Eliminate or Lower Fees
- Prediction 10: By 2019, Artificial Intelligence Will Change How 25% of Merchants, Marketers, Planners, and Operators Work, Improving Productivity by 30% and KPIs by 10–20%
Retailers must recognize and drive digital transformation. Retailers dealing with legacy, disconnected, and siloed systems have latencies and speeds that cannot support modern commerce, nor do most of the legacy systems allow retailers to quickly launch the types of services that customers today are
expecting. At a time when customer expectations are rising and customers are more digitally fluent and digitally equipped than ever before, customers are expecting that their shopping experience will be easy, convenient, frictionless, and available anytime everywhere.
Guidance for IT and Business Leaders
To learn how you can apply these predictions to your business, please refer to the guidance outlined for each prediction found in the IDC FutureScape: Worldwide Retail 2017 Predictions report (Document on IDC.com).
Click here to learn more about what IDC can do for senior business leaders and IT executives as they move through their digital transformation journey.
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