This is the third article in the Becoming Retail series, which explores how retail leaders are thinking about, and putting people at the heart of, digital transformation.
According to the McKinsey Global Institute, the term “digital transformation” came into being in 1994, the same year the first commercial Web browser, Netscape Navigator, debuted and changed how the world does business. Retail was one of the first industries to be upended by the web – the first ecommerce transaction occurred in 1994 and Amazon went live in 1995 – and retailers have been “digitally transforming” ever since. I led ecommerce during that time for LIDS, a specialty retailer, and it gave me a front seat to the dawn of digital transformation in our industry.
But what does digital transformation really mean? Our definition is a radical rethinking of how an organization uses technology, people, and processes to fundamentally change business outcomes. This requires collaboration across the enterprise as digital is infused into all facets of the business.
Do retailers agree with our definition of digital transformation? To find out, we spoke with ten digital leaders from household brands. Here’s what they had to say.
Karen Beebe, chief information officer (CIO) and senior vice president (SVP), operations and ecommerce, vineyard vines
Digital transformation is all about data democratization. How are people gathering information? How accessible and shareable is your data? How can team members communicate digitally and connect and share information? Data is so important, and it’s about using data in places where data is not typically accessible, and putting processes in place to give data to everyone in the organization so they can innovate and make decisions faster. That doesn’t necessarily mean that everything is on your phone. All that said, you’re never “done” with digital transformation. It’s a lot of little things that are changing and happening all the time and you can never really say you’ve achieved it. It’s about balancing vision and pragmatism.
Nicola Thompson, chief operating officer, MADE.COM
Digital transformation is perpetual. It’s constantly moving and happening. Most companies have legacy technology they need to move out to be more nimble to enable transformation. Micro services architecture gives us much more flexibility to build and iterate fast. There’s a huge amount of transformation happening there. In pure play internet companies, you can innovate by, say, implementing marketplaces or subscription models, and that requires digital. One of the biggest challenges of a fast growing ecommerce business is how to set yourself up to grow internationally. The traditional model calls for having a big team in that country, but digital commerce blows that apart. I’ve overseen fairly big reorgs to get set up for the requirements in the countries we’re going into. Social media obliterates geographic boundaries. It’s becoming more homogenized to the consumer digital experience.
Art D’Elia, executive vice president and chief marketing officer, Domino’s
Domino’s already had an unbelievable track record of digital innovation when I arrived, so there was no need to prioritize digital or change the approach. One thing I’ve enjoyed in the restaurant business [vs. consumer packaged goods, where he spent more than a dozen years] is that we have direct access to customer data. It’s a huge luxury because it opens up many more opportunities to use digital tools that allow us to segment consumers and do precision marketing. We want to make ordering a pizza a better experience, and digital innovation has played a big part in that.
John Hazen, chief digital officer, Boot Barn
Digital transformation means you don’t have to get it right the first time. You don’t have to wireframe everything all the way through. For me it means making mistakes, moving quickly, having minimal viable products, and not designing all the way. That’s the way I attack every digital project. From a retail standpoint, there’s a lot of meaty things we’ve done – like buy online/pickup in store and curbside pickup – that are practical but require digital. I avoid shiny objects. Digital transformation is about designing an experience that everyone will adopt, and taking friction out of the experience so they want to use it. One example: a large, red internet of things (IoT) button that lights up in stores to alert associates to incoming online orders.
Jim Giancodomenico, former CIO, Avenue Stores, Ashley Stewart, and Finlay Fine Jewelry
For me, digital transformation starts with strong organizational leadership, communication, and accountability. It’s a people-driven process, and the technology exists to enable the process. Like any transformational exercise, you have to work on getting everyone to row in the same direction. If not, you won’t get there, because different stakeholders have different stakes in the ground. Transformation takes listening, empathy, and thoughtful feedback on the part of your employees, partners, and customers. Digital transformation in particular is about using technology to pivot quickly.
Jenna Flatman Posner, vice president of digital, Snipes
Digital transformation is about using technology to listen to your customers. Who is the consumer and what is their path to transaction? How do they want to engage? For example, with Gen Z, it’s SMS. It’s also about prioritizing your partner ecosystem. The value of these relationships is so important, as is trust, in digital transformation. Every vendor promises seamless integrations, for example, but is it true? And is it a quality integration? You have to trust your partners. If not, you will miss timelines and be hampered by your ability to transform your business.
Elizabeth Geri, founder of Wide Ruled Rebel, formerly SVP of marketing and ecommerce, Sur La Table
Digital transformation is always evolving and it’s marked by seismic shifts. As leaders we need to account for that and manage that change. For example, when smartphones and social media became huge traffic drivers to retail sites, you had to have the tools in place to deal with those changes. And you constantly iterate on it. That’s what’s great about digital. You don’t need to perfect everything, which is good because you don’t and you won’t know everything. With digital transformation, don’t mistake action for progress. You have to do things that will help get you where you want to go, but it doesn’t have to be perfect. What’s that saying? Don’t let perfect be the enemy of the good?
Dana Schwartz, vice president-to-consumer and digital, KEEN
To transform digitally I have to be fearless and be okay with failing fast. It’s about being a problem solver, and at the cornerstone of that is having the confidence to take risks. How do we measure success? There are several relevant elements, but for us it’s innovation and customer-centricity, and leveraging digital tools to enable it. Lifetime customer value and net new customers are also a huge focus of ours. During COVID-19, for example, we’ve democratized our data, giving access to customer data to a new “delight team” that is focused on customer satisfaction.
Lockie Andrews, CIO and chief digital officer, Untuckit
The first decade of digital transformation was all about technology. Then it became about the trilogy of people, process, and technology. In the current decade, technology providers have gotten it right in that they’ve modularized solutions from a vertical perspective, like retail and financial services, that are purpose-built. Now the emphasis is less on technology – in fact, that’s the easy part – and it’s even more about people, process, and technology. That’s the most important piece, and it’s incredibly hard and slow because you have to figure out what will benefit individuals and departments, and communicate that very effectively. People don’t like change and having to learn new things, so that takes time. I find that it helps to appeal to people’s FOMO (fear of missing out). One example: if a new digitally-driven process helps finance teams close the books in three days versus three weeks, others will ask how that can be interpreted for their team and business.
Eileen Rizzo, SVP of IT, Ashley Stewart
I’ve been involved in a lot of transformations in my career, and they involve bringing siloed people together to give customers what they want. That includes marketing, logistics, order management, and more. They’re all impacted. When you consider digital transformation in retail, whether it’s ecommerce, omni-channel, or brick and mortar, it’s all about getting the customer what they want, which always requires organizational silos to come together to deliver.
There are three keys to success. One is perseverance. You have to be able to understand and believe in the strategy but be agile as needed. Two is that you have to be grounded in facts with customers at the center. They are voting every day about what they want. Three is that you have to think beyond your role or silo in the organization. That makes it harder to enact broad change.
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