Navigating the Digital Transformation Maze in Retail
In today's fiercely competitive retail landscape, digital transformation isn't just a buzzword; it's the lifeline that keeps businesses thriving. Today we’re delving into the data-backed trends shaping retail and providing actionable insights for your talent and transformation.
The pandemic leapfrogged digital and ecommerce adoption by 4-6 years. And while general life is back to normal, consumer behavior is definitely not! All of the digital transformation that happened over the past 4 years has remained with us and continues to grow. In fact, today 72% of marketing budgets are dedicated towards digital channels and C-Suite leaders have cited AI as their top digital priority. Needless to say, both consumers and retailers are living in a digital-first world.
In 2023 we’ve seen retailers go through massive re-orgs to focus finite resources on the talent that will make them competitive for the future. From omnichannel synergy to influencer marketing, e-commerce dominance, and AI, let's explore the trends that demand immediate attention.
Trend #1: Omnichannel Wins
In the past, marketers often talked about channels as if they were independent swim lanes. Now we know that consumers don’t differentiate or even think about what channel they’re on. To them, the digital and physical world are one; every brand interaction is an interwoven and inseparable thread of their overall customer experience. So while companies race to optimize their omnichannel strategy, consumers are already living and making purchase decisions in an omnichannel world. We can see this unfolding in the recent data:
Companies with omnichannel customer engagement strategies retain on average 89% of their customers (Aberdeen Group)
90% of consumers said they expect the customer experience to be consistent across channels and devices. (SDL)
66% of consumers say they are willing to pay a premium for a positive customer experience (RWS)
Retailers looking to hone their omnichannel strategy are adding digitally-savvy, customer experience focused leaders for roles such as Director of Customer Experience, Head of Omnichannel , Chief of Digital (CDO), and Chief Omnichannel Officer.
“Seamless channel integration from the consumers’ perspective is an increasingly important differentiator. Brands that fail to recognize this and adjust will fall behind.”
Trend #2: The Influencer Economy
It should be no surprise that 87% of consumers said they are more likely to make a purchase based on influencer recommendations. This growing shift in product discovery has made influencer marketing a core part of many retail strategies. CMOs in a recent survey even said they’re expecting their investment in influencer marketing to increase by 107% over just the next 3 years (The CMO Survey). In short, brands are seeing the ROI.
For example, Tentree, the eco-friendly apparel brand, was able to drive over a thousand conversions by executing an influencer push, working with both macro and micro influencers in the eco-community. The influencer campaign drove a 13x ROI, which is huge for any marketing campaign.
Still, influencer marketing remains a bit mystified for many leaders and executive boards. That’s why companies are looking to inject new talent, and even new roles, to build and optimize influencer strategies. Leading the charge are upskilled CMOs, Directors of Influencer Marketing, and Heads of Social Media Strategy, who strategically work with influencers to drive brand visibility and engagement.
Trend #3: E-commerce Domination
As in-store sales remain relatively flat, e-commerce continues to grow and is expected to grow another 10.4% from the previous year. And the power it has given companies who truly prioritize it is astounding:
E-commerce has allowed retailers to scale through geographic market expansion. In fact, 57% of online shoppers report that they shop internationally, and not just locally, to find what they need.
E-commerce’s natural abundance of data partnered with loyalty programs have enabled brands to build resilient 1P data strategies in a cookie-less world, while simultaneously personalizing customer journeys to improve retention and purchase frequency.
Many startups nowadays are entering the arena exclusively with e-commerce, capturing market share with engaging and customer-centric digital experiences. Meanwhile, there are still big name brands that treat e-commerce, both conceptually and budgetarily, as just a compliment to their bricks-and-mortar stores.
Retailers who plan on being at the forefront of retail’s transformation, and benefit from ongoing e-comm growth, have been hiring leaders whose mandate is to focus on and integrate e-commerce across the buying ecosystem. More and more, we’re seeing companies hire roles such as Chief Ecommerce Officer, Director of Ecommerce, and Ecommerce Manager. Furthermore, we’re seeing these roles come in to lead full teams of digital talent, verses acting as the sole e-comm champion of the organization.
“In today’s age, you need more than just strong e-comm leaders. You need a strong e-comm team - and that includes UX/UI specialists, data analysts, performance marketers, and creatives who are equally fluent in the world of ecommerce and technology.”
Trend #4: AI Meets Retail
Last, but far from least, on our transformation trend list is AI. AI has disrupted all industries, and retail is no exception. It offers both endless possibilities and frightening ambiguity for brands. Nonetheless, experts agree that AI is here to stay and pave the new era of everything, just like the internet did decades ago.
C-Suite leaders are now saying AI is the top digital priority, with nearly three-fourths of companies prioritizing AI over all other digital investments. A report by Reinventing Enterprise Operations found that 90% of business leaders are leveraging AI to improve operations. Across the board, AI is helping to identify opportunities, enrich data decisiveness, personalize the customer experience, and create efficiencies. For example, the fashion retailer, Simons, is using AI for predictive analytics to forecast product demand and optimize inventory. Meanwhile Sephora is offers customers a sophisticated AI chat bot that them people find products based on their personal features and make in-store beauty service reservations.
In the face of overwhelming change (and the risk of falling irreparably behind), companies have begun seeking strong AI leaders who can pioneer and steer those top-priority initiatives. We’re seeing companies hire for Chief AI Officers (CAIO), Director of AI Strategy, Chief Data Scientist, Head of AI and AI Product Managers. This space is new and growing, so we anticipate many new roles to immerge from it over the next few years.
Conclusion
In sum, retail is standing in the eye of a storm. Staying ahead of the curve requires a keen understanding of the trends and data shaping the future and the right executive talent to execute strategies effectively. Brands are looking for leaders who can navigate ambiguity, pivot with agility, and be comfortable upskilling themselves and those around them.
At Ari Agency, we specialize in connecting retail businesses with top-tier executives who can lead your digital transformation journey. Don't miss out on the retail revolution; partner with us to unlock your potential through the power of your talent.
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