How retail business and technology leaders address digital ethics
- Posted on December 17, 2020
Digital technology now drives every aspect of retail. Even in-person customer experiences have rivers of data under them, not to mention growing adoption of contactless technologies, facial recognition and other biometrics, and AI engines making more and more decisions to guide our engagement. Now, of course, a similar digital transformation is rolling through the ranks of employees, whether working from home or returning to work under the watchful eye of health monitoring, contact tracing, and other safety measures.
As we adopt these new technologies with an urgent aim to keep our economies churning, it’s worth taking a moment to consider the ethical implications of these products and projects. Last August, Avanade surveyed 800 business and tech leaders around the world to understand their approaches to and feelings about digital ethics. Here, we’ll present some of the most interesting ways respondents in the retail industry differed from their peers.
First, for context, when we asked respondents to list their top three drivers for tech spending, 40% of respondents in the retail industry said “to improve customer experience” (compared to 33% of financial services and 30% of health care respondents). The next two most common drivers were to improve operations (38%) and reduce costs (31%). Improving customer health and safety and employee health and safety were further down the list at 23% and 19%, respectively. This shows (not surprisingly) that tech spending in retail is still mostly focused on the bottom line.
As far as how their organizations address ethical considerations, retail respondents were the most likely of any industry to say that their CEO has regular responsibilities for digital ethics, although this was still a relatively low 17% compared to the 27% in retail who said the CIO is the highest role with regular responsibilities. About half of retail respondents said they actively train employees on digital ethics, while only 22% said they have a formal digital ethics governance structure. Both of these numbers are on par with other industries, however, only 24% of retail respondents said their organizations have at least one individual whose primary responsibility is digital ethics, behind an average of 31% across all industries.
What’s most interesting is to look at where digital ethics efforts are paying off. When we asked respondents how their companies addressed a wide variety of ethical issues, there were several areas for which at least 35% of retail leaders said their companies are doing well enough to see business benefits: how they collect data (37%), how they enforce data controls (35%), how they use data (45%, their support for the workforce (36%), support for economy (35%), how their tech reflects organizational values (40%), and how reliable their technology is (35%).
Of course, there is plenty of room for improvement. The digital ethics issues for which at least 30% of retail respondents said either their organization could be doing better or it was doing poorly enough to experience negative consequences included: accessibility (34%), materials used (30%), energy used (30%), impact of obsolete technologies (33%), organizational culture (32%), tracing the origin of tech components (32%), compensation for tech contributions (30%), and establishing accountability for when something goes wrong (31%).
Importantly, when we asked respondents to list the top three ways they measure business value of digital ethics, retail respondents were mostly likely to say customer satisfaction (57%), customer loyalty (49%), and employee satisfaction (46%). (Compared to “reduction in risk events” at only 21%.) And apparently this value is encouraging more investment, with 61% of retail business and tech leaders saying they’re planning to increase spending in digital ethics over the next 12 months, which is on par with the cross-industry average.
From our analysis of retail executives’ perspectives on digital ethics, they seem to be more customer-focused than other industries and digital ethics gets more high-level visibility, but most lack a formal program and designated responsibilities. We also see more attention on issues related to privacy and economic benefits, but not as much on issues related to production and environmental impact. But even with these gaps, there’s reason for optimism, as the majority of retail organizations are poised to increase their efforts, and the more we talk with each other about digital ethics, the more confident we’ll be that we’re implementing technology in a way that builds trust with customers and employees.