Looking at the change sweeping the retail landscape, CEOs reveal that making a digital transformation will be their highest priority this year. According to the fourth annual JDA and PwC survey of more than 350 global retailers, 69% of executives say they plan to increase their investment in digital transformation in 2017.
“The investment in technologies underscoring digital transformation was a major undercurrent within this year’s survey results, which is no surprise, since retail CEOs understand just how important it is to invest in the technology that will improve the customer experience,” said Lee Gill, group vice president, global retail strategy, JDA. “The next wave of results also reveal the continued balancing act retailers are struggling to maintain with delivering superior omnichannel execution and profitability, all while meeting the demands of the modern shopper and keeping pace with the digital transformation underway across the supply chain.”
Retailers are using digital technologies to better understand and connect with consumers. While retailers know this aspect is important, 52% of respondents to the survey have not yet defined or started implementing a digital transformation strategy. Chinese retailers are more likely to be implementing their transformation (58%) than the U.S. (40%). Another 19% of U.S. retailers are struggling to or choosing not to define a digital strategy at all.
For those that will be investing in 2017, the top technologies are mobile applications, 85%; big data, 86%; and social media data, 85%. Automation and the Internet of Things are lower on the list of priorities but are gaining some momentum.
As omnichannel rings top of mind for retailers, fulfillment and profitability is still a challenge as only 10% of retailers surveyed are able to make a profit while fulfilling omnichannel demands. Of those CEOs surveyed, 12% say they provide a seamless shopping experience across all channels, down from 19% in 2014.
CEOs are also increasing their investment in BOPIS, with 51% saying they plan to offer BOPIS in the next year, up from 47% in 2016. Buy online and ship to store is an investment for 48% of CEOs; on the flip side, CEOs plan to spend less in 2017 on fulfillment.
As a result of fulfillment challenges, 57% of respondents will increase charges for online orders in 2017, 62% will increase the minimum order threshold for free delivery, and 55% will raise the minimum order value for BOPIS.
“While retailers have increased fulfillment options over the last year to meet consumer demands, as BOPIS becomes a staple and buy online, ship to store emerges as another core fulfillment capability, retailers now need to balance the effectiveness and profitability of the fulfillment channels they offer—with customer satisfaction. Because if shoppers experience a problem with home delivery or in-store pickups, that is a lost sale—and customer—that retailers can’t afford in a highly competitive market,” Gill said.