Latin America. The Retail sector is one of the most aware of the digital transformation, since 90% of companies claim to have a defined digital strategy, however, few companies have initiated actions to carry it out.
According to The Digital Transformation PACT1's global survey, conducted on a sample of 189 business leaders in the retail sector, on the four strategic elements necessary for a successful digital transformation: People, Actions, Collaboration and Technology (PACT), the main reason why only some companies with a defined digital transformation strategy have initiated actions to carry it out is the fear of failure.
70% of respondents say that investing in stocks without having a clear return on investment slows down the implementation of the digital transformation strategy. 20% claim to have experienced at least one failed digitization project in the last two years, with an average cost of 337,381 euros, and 23% claim to have canceled digital projects incurring an average loss of 182,321 euros.
Despite these setbacks, most expect financial performance and operational benefits on their digitization projects over the next 18 months. Supporting this optimistic outlook, 86% are confident that there is a culture of innovation in their organizations and believe that processes and behaviors are the most important factor in carrying out their digital strategies with 34%, followed by people with 24%.
Fujitsu highlights this industry's consensus on the lack of digital skills
Several key areas of improvement are identified in terms of the digital transformation strategy of companies. Lack of digital skills is the first reason (71%). 7 in 10 worry that their organizations will focus too much on technological change during transformation, rather than on the skills, processes, and behaviors that should support it. In addition, while almost half invest in Internet of Things systems, around three-quarters (73%) are concerned about their ability to adapt to new digital technologies, such as Artificial Intelligence.
That's why many retailers are already addressing these shortcomings through open collaboration. 87% are taking steps to increase their access to digital expertise and skills, as well as investing in collaborations with third-party technology experts, clients and start-ups. However, compared to other sectors, these are the least willing to undertake co-creation projects with partners to offer digital innovation, only 50%, and this can be a disadvantage for them.
Digitalization is affecting processes, revenues and business models
35% have already implemented digital projects and another 38% have them in progress. More than half (54%) are implementing digitalization in existing business processes and functions. For 31%, digital transformation means modifying the models and revenues of their organizations, while 58% are seeing the creation of new digital business processes. However, shadow IT remains a problem, with 70% feeling that digital projects in the shadows are the only way in which certain areas of the organization can complete a significant innovation.
Customers, the main driver of the digital transformation of companies
Unsurprisingly, for 66% of retailers, customers are the main driver of digital transformation. 91% admit that they are expecting organizations to be more digital and 69% believe that digital transformation is leading to greater competition. In fact, digitalization is shaking up this sector more than others. Three-quarters (75%) agree that it is impossible to predict who their competitors will be ten years from now. Overall, 86% think that the ability to change will be crucial for their business to survive in the next five years.
Fujitsu's 'The Digital Transformation PACT' report is available for download by clicking here.
