The tech transformation imperative in retail

The tech transformation imperative in retail
The tech transformation imperative in retail

Digital technology has become a foundational element for all industries, but retail is facing several challenges that have brought it to the fore. The industry has been reshaped by a number of factors—including the rise of e-commerce and omnichannel, changing customer behavior and hype personalization, and growing supply chain complexity—all of which have been accelerated by the pandemic.


These shifts have heightened the pressure on retailers’ bottom line: over the past five years, margins have been shrinking by two to three percentage points per year, or even by as much as five to six percentage points, depending on the vertical.


A robust tech foundation can give retailers the capabilities to boost performance across the board, but to date, most organizations haven’t made sufficient progress and are missing opportunities as a result. Only a few retailers have built true omnichannel offerings, harnessed data at scale, and implemented agile ways of working throughout their organizations.


To reverse the negative trajectory of recent years, bold action is needed: retailers must undertake a radical transformation of their tech function—both its architecture and its operating model.



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A coordinated, ambitious tech transformation can have a wide-ranging impact. Our Digital Quotient Survey in the consumer and retail industries found that digital leaders generated 3.3 times the TSR of digital laggards between 2016 and 2020.



This finding upholds the idea that technology will be a core driver of next-generation retail growth and will fuel omnichannel customer experience, smart offerings, and lean operations, as well as emerging business models such as data monetization. Retailers can follow a five-step action plan to assess the maturity of their IT landscape and their underlying organization and operating model. With these insights, retailers can then make the right strategic investments in technology to supercharge their performance.