How Data-Driven Digital Transformation Enables Profitable Retail with a Purpose


An IDC Info Snapshot; Sponsored by Avanade

Today’s retailers face a confluence of challenges unprecedented in modern times in variety, scale, and complexity, ranging from geopolitical strife, weather events and Covid-19, to demanding customers, labor and supply shortages, and an expanding array of omnichannel customer journeys. Facing such strong headwinds, retailers are challenged to control costs and protect margins.

But there’s another urgent challenge in the mix: retailers are under intense pressure from consumers, employees, and investors to operate responsibly with respect to people and planet. It's a common belief that controlling costs is antithetical to operating sustainably – that being responsible and protecting margins are mutually exclusive. They are not. In fact, if a retailer is successfully operating sustainably, controlling costs is built into its business model: Operating sustainably means using resources efficiently and optimally.

Retailers instinctively understand this connection, which is why, when asked what’s driving their sustainability initiatives, their top response is ‘improving operational efficiency and costs.’ A retailer becomes more efficient and less wasteful when it digitally transforms, eliminating silos and embracing technology such as cloud, AI, and IoT to capture data at the source, integrate it into a single, unified platform, and analyze and use it intelligently and in real-time to optimize across the end-to-end enterprise and ecosystem.

When looking to operate responsibly in a recessionary environment, intelligence makes a difference

An important aspect of operating sustainably is operating intelligently. If you are operating intelligently, you are coordinating your end-to-end enterprise in an optimal way to operate more efficiently, eliminating unnecessary waste ― time, energy, labor, inventory ― across channels, in the store, and throughout the supply chain.

You are sharing data across the enterprise and ecosystem, empowering people of diverse skills and interests to work more collaboratively to make better decisions, and enabling detection of trends or anomalies in real time. You are using the more holistic view you achieve through visibility and insight across your end-to-end organization to make better decisions for the whole — company, community, country, globe – even while continuously improving all of the parts.

Make smart use of brick-and-mortar stores

While the supply chain accounts for a large portion of an environmental footprint, and while most customer purchase journeys interleave digital and physical footprints, stores still comprise 85% of sales. What does this mean? In-store shopping is alive and well! Your store offers a host of opportunities to demonstrate the ways in which a retailer responsibly stewards its environmental and people resources as well as to encourage sustainable habits on the part of consumers.

Empower your workforce

How do you achieve operational efficiency and costs? Through intelligence. By gaining visibility and insight into data, retailers empower people, with the aid of technology, to make better decisions across the end-to-end enterprise and the extended ecosystem. When organizations digitally transform, two amazing things happen: 1) automation eliminates boring, redundant, error-prone work, opening the door to faster, smarter analysis and decision making and enabling a retailer to better balance business priorities; and 2) the scale and speed of and real-time accessibility to data enable organizations to get information into the hands of stakeholders who need it, including frontline retail workers, who are freed of some manual, labor-intensive tasks and better able to engage meaningfully with consumers.

The efficiency that digital transformation brings goes hand in hand with sustainability. Through a unified data platform that enables better collaboration across the concept to consumer supply chain, retailers are better able to build brand loyalty and create business value through differentiated products or services, improve partner relationships, and attract and retain top talent – all of which are top drivers themselves of sustainability.

Learn to grow responsibly

Looking for more ways to promote your purpose while keeping costs in check? Sign up to our four-part mail series to gain insights direct from IDC Analysts, panel discussions with global industry leads from Microsoft and Avanade, and interactive content that takes you to the future of responsible retail.

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