The Retailer Spring_09.05_FA

#reinventionretail

Technology must move up the agenda for retailers and manufacturers

Prerna Carroll Project Manager for Charity Programmes IGD

Being ‘digitally capable’ The evolution of digitally capable companies has been accelerating so fast over the past decade that it is easy to assume all businesses are digital by default. However, this is not the case. Many organisations are unsure of how to meet the challenges of this new way of working – or even what digital capability means within the context of their business. This is an important place to start, especially as digital can have so many different interpretations. At IGD we define it as both ‘maximising the potential of data and technology to address business challenges’, and ‘responding quickly to continual shifts in consumer behaviour in a fast-changing connected world’. It means moving technology higher up the agenda through a change to both mindset and culture to attract customers with ever-increasing expectations. Four stages of digital development IGD carried out research in 2018 with senior leaders on Building Digital Capability. We found that most are either not acting on digital developments or are aware of these developments but unsure where to go next. Whilst the most advanced companies are already focusing on leadership, culture, talent and data to develop their digital capability, others have relied on a more traditional approach. We divided respondents into four categories, from ‘inaction’ to ‘instinct’ depending on their digital progress.

2. Recognition The largest group of senior leaders – nearly half of all respondents – told us that digital capability is important but that they are unclear how to develop it and move on. It is possible they have tried experimenting with different ways of working or have spoken to experts. However, this does not help to bring about the change they need. One of the most important actions for this group of companies is prioritisation: starting with projects that can quickly demonstrate a return on investment and show tangible efficiencies. Beyond this, most solutions will be staff-led. Embedding cross-functional working and encouraging staff to train one another in digital skills can not only help the business develop its digital capability but can improve engagement rates too. With a senior leader responsible for change and a workforce that is empowered to suggest and implement that change, culture can shift, and productivity can improve. 3. Action In a quarter of companies questioned, we found that leaders are already acting on digital transformation. They are not only championing change from the top but have digital champions throughout the business, are recruiting for more future- focused roles, and are investing in improved data structures. These companies can push themselves still further by developing partnerships to learn more, and by setting challenging KPIs that reflect their ambitions in the digital sphere. They can also look in more depth at any barriers that exist and challenge existing ways of working so that they are always finding new ways to develop both the business and its staff. 4.Instinct The ultimate goal for a digital company will be to arrive at a position where digital capability is instinctive. Unsurprisingly, only 12% of our interviewees put themselves in this category but those that did said that “innovation, disruption and self-disruption are core to who we are”. Maintaining this position will mean continuous learning to stay on top of any new developments in the digital field. Investing in people and working with future generations through schools and colleges will help to build a pipeline of talent that will serve companies well in years to come. Digital capability is not a journey with a definite end-point: it is a series of constant questions and experiments with new ways of working. Stepping into the future Our role at IGD is to support the food and consumer goods industry, and one of the key challenges right now is for companies to develop new skills that will make the most of the rapid growth in new technology. If you want to find out where your organisation currently is on its digital capability journey, we have a free online assessment tool developed around our report and the common characteristics it identified. Based on your responses, you will be able to see which of the four stages your business is at, so you can identify how and where to progress: igd.com/ digitalassessment

1. Inaction For 17% of the companies we spoke to, digital capability was not a priority for their business. One respondent from a private label manufacturer told us “we don’t really think about digital; it’s not a high priority and there’s no pressure from our customers”. In order to move on from this position, companies could collect case studies that are relevant to their type of business and carry out a consultation with stakeholders to understand where they stand in relation to competitors. From here, there are many changes that can be made internally, such as ring-fencing the time of a senior leader to focus on digital issues or picking a business problem and looking for a low-cost and simple digital solution to fix it. Getting buy-in for digital often means testing different options and finding the right solution for the business.

24 | spring 2019 | the retailer