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Retailers Must Define Their Digital Destiny To Keep Up With Changing Consumer Choices

Retailers Must Define Their Digital Destiny To Keep Up With Changing Consumer Choices

Established competitors rather than startups are still the biggest source of competitive pressure for major players

 

You might not know it, but a solid 80% of the retailers in the Forbes Global 2000 are SAP customers. So, we pay careful attention to where the market is heading. And, from the news in Forbes and other business titles, it looks like 2019 is going to be tougher for retailers than last year.

That’s not just because of uncertain economic conditions that are making many consumers less keen to spend their hard-earned money. The biggest challenge could well be from disruptive digital strategies that are changing the rules at a fundamental level.

Senior executives at leading retailers around the globe are consistently telling SAP that what worked in the past isn’t working today. And you can’t fight your way through today’s challenges by simply working harder. The work itself is changing, and retailers are finding that they need insight to act in the moment.

In other words, they need a “Run Live” mind-set so they can operate on facts, not guesswork, and tap into current and future opportunities for profit and growth.

 

Stormy times

The digital storm is impacting every industry, but retail is right in the eye. Consumers, in particular Millennials and Generation Z, expect a new type of experience: one that is individual, where commerce is seamless and technology is invisible. Their brand loyalty is fickle. So, if you don’t deliver on their expectations they’ll switch to someone else who will.

As more and more consumers search, shop, and socialize online, an omnichannel presence is no longer optional – it’s what earns you the right to compete. According to the Aberdeen Group, retailers with an omnichannel customer engagement management strategy enjoy a 91% year-over-year increase in retention rates.

Implementing an omnichannel strategy is already a stretch for many retailers with archaic business processes and technology infrastructures. But, retailers that want to lead, rather than just survive, have to go even further. They need to define their digital destiny!

 

Cloud can make a big difference

According to a study conducted by Forrester Consulting and commissioned by SAP, businesses that implement SAP Hybris cloud solutions for sales and services can realize gains in productivity, increase deal sizes and generate positive returns on investment (ROI).

For the study, Forrester designed a “composite” organization based on the characteristics of companies it interviewed. Analysis showed that organizations using SAP Hybris Sales Cloud for three years could experience an increased ROI of 437 percent, totalling net-new revenue of US$18.4 million.

One of Hong Kong’s home furnishing retailers, Pricerite Stores Limited, has chosen SAP Hybris Cloud to help it gain a 360-degree view of its customers. Pricerite will use SAP Hybris to understand its customers’ interests and motivations. It will even be able to identify real-time marketing opportunities and develop personalized marketing experiences.

Pricerite isn’t alone. Many other businesses have selected SAP Hybris Sales Cloud and SAP Hybris Service Cloud solutions to unify customer data in a single source and help ensure alignment of sales and services – regardless of location – for better engagement and quality interactions.

 

Reimagining the future

Digitally transformative technologies are already a reality and they are constantly improving. Successfully embracing them and addressing these strategic priorities will be the foundation for successful digitalization and staying ahead of the innovation curve.

Indeed, many major retailers, who see established competitors rather than startups as their biggest source of competitive pressure, have already embraced them to significantly up their digital game.

As for those who haven’t started or aren’t interested, it might be time to start designing posters for a going-out-of-business sale.

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