Singapore: The retail industry is expected to add $272 billion to Asia Pacific region’s GDP, or 1.5% CAGR by 2021, should organizations embrace digital transformation initiatives, predicted a new study.
The study observed the impact of digital transformation in improving the profits and revenues of retailers through the customer-centricity approach.
Unlocking the Economic Impact of Digital Transformation in Asia Pacific – a Microsoft sponsored study polled 240 business leaders from the retail industry in the region.
The study found that half of the respondents will focus on transforming customer service and support as part of their digital transformation journey to deliver customer-centric offerings.
Top business priorities included improving business agility to respond quickly to market trends and opportunities; employee productivity, along with integrating digital channels to deliver omnichannel experiences. To address the latter, respondents will also focus on sales and IT operations for the year.
In addition, respondents identified improvements to profit margins; revenue from new products and services; customer advocacy; productivity and revenue from existing products and services as a result from their digital transformation initiatives.
Accelerating Digital Transformation Journeys with Data
Close to 50% of respondents are already using data capitalization, or how data is being leveraged as an operational asset, as a metric to measure digital transformation success. Additional metrics tracked for their respective digital transformation journeys include non-traditional business KPIs such as customer advocacy and process/service effectiveness.
“We see the opportunities for the region’s retailers to zoom into four key areas to build a customer-centric operation for the future. First, they must exceed customers’ expectations both in-store and online. Second, they need to start creating actionable insights for intelligent operations to deliver customer-first offerings,” said Raj Raguneethan, Asia Lead – Retail and Consumer Industries, Microsoft.
“In order to do so, retailers need to empower employees to deliver in a digital and data-first retail environment with the right tools. Lastly, they need to acknowledge the competition by competing with innovation in a global marketplace,” added Raguneethan.
With data, organizations can accelerate their digital transformation journey via a three-step process:
1.Collection of data to improve decision-making processes
Retail organisations need to have a data strategy in place in order to manage the streams of data available. By doing so, and applying big data analytics, they will be able to develop real-time insights that can deliver personalized experiences while simplifying the decision-making process for employees.
2.Optimizing existing products and services with data
Data can be used as an asset to optimize existing processes and for developing predictive analytics to improve delivery of services and products across channels. Retailers can also tap on artificial intelligence (AI) to deliver personalized experiences, while reducing time spent on menial work.
3.Creating new business models with data
Data can also be used to develop new products, services and experiences, as well as new business models, like RaaS product by Kroger.
The Kroger Co., and Microsoft Corp have announced a collaboration to redefine the customer experience using Kroger Technology products powered by Microsoft Azure, the retailer’s preferred cloud platform for Retail as a Service (RaaS).
“Through 2021, retailers that leverage AI, AR and IoT for employee and customer engagement will see customer satisfaction scores rise by up to 20%, employee productivity rise by up to 15%, and inventory turns rise by up to 25%,” said Victor Lim, VP IDC Asia/Pacific. “