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How is Digital Disruption affecting the Retail Industry?

Digital Disruption

It has been 15 years since the introduction of eCommerce and mobile shopping is well underway with mainstream consumers. With fast changing behaviors and high demands of consumers, retailers are utilizing technology to help satisfy their customers, however, they are still trying to figure out how to best use technology while providing a superior customer experience.  They continue to struggle with the adoption of digital tools both online and in-store, integrating systems and inventory for a seamless experience.

When we think about what we want as consumers, as customers and our expectations of service, they are in some way shaped by what technology is available and developed. Michael Klein, Director for Adobe Marketing Cloud, states:

“Its almost a constant testing ground with the consumer of what is available from a technology perspective and how fast we can think: What is the value proposition for the consumer, who is now very much in control of the brand and shopping experience?”

A recent study forecasted that the retail industry will be the third most affected by digital disruption.  Retailers have been facing challenges with eCommerce, omnichannel and mobile capabilities for years so it is no surprise that they would be amongst one of the top affected by digital disruption.

Digital Retail 1

Many industries see technology as a huge expense versus an investment, with retail being on top. But not all retailers are getting lost in the details, many do see the bigger picture and are willing to make the investment to adapt to their ever changing consumer. Target is amongst those successful retailers that see digital engagement as crucial to incremental profits and sales both in-store and online. Target has already made significant investments in cybersecurity and technology after their breach but their current CEO says that they plan to invest another $1 billion to enhance even further their digital capabilities.

Another retailer, and a main competitor of Target, Walmart, is also making big investments in digital channels with the final phase of their new cart and online checkout capabilities. This program is likely to have a huge impact on the future of Walmart’s eCommerce performance. eCommerce is imperative to helping Walmart drive convenience and easy-access for their customer.

“We are investing to win the future of retail, and I’m excited about the possibilities that our improved e-commerce capabilities will provide,” said Doug McMillon, president and CEO of Wal-Mart Stores.

But as I said before, many retailers are having problems being able to adapt to this technological age and the pace that is required to stay competitive. There are a few factors that could be contributing to their struggle:


The cost associated with replacing current systems with omnichannel systems is expensive but the process can also be very complicated pending on the size of the retailer.


Retailers have traditionally been led by their merchants and products. With the rise of technology and the connected customer, retailers have had to change the focus of their strategy and marketing from brand and imagery focused to customer-centric.  The culture now has to operate in a customer-centric fashion which is very different from how they were operating previously.


While retailers are trying to keep up, shoppers are out-maneuvering them and outpacing them with their expectations. A recent study done by Mindshare shows that many consumers are “gaming” (using various tricks) to outsmart online retailers.

How millennials are gaming e-commerce (PRNewsFoto/Mindshare North America)

How millennials are gaming e-commerce (PRNewsFoto/Mindshare North America)

An example of this occurs when consumers have intentionally abandoned their carts to get the retailer to engage them by retargeting them with an offer, discount, and/or promotions to actually close the sale.  While retailers are smart, consumers have become even smarter. Consumers are able to use many devices in order to find out information on products which ultimately drives the necessary consumer/customer-centric strategies.

More and more retailers are claiming that they are on the course to harness technology and make the customer experience as relevant as possible. Ultimately, they will all need to catch up or they will go the way of the 8-track and VCR.

IBM solutions can help deliver a smarter shopping experience by creating a detailed, single view of the customer, target and personalized individual customers and enable them to do whatever, whenver, and however they please on any device.  To learn more about how IBM solutions can help you succeed in this digital transformation, click here!

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Heather Bowman

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