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To create experiences of the future, retailers must embark on a full-scale business transformation

Written by Greg Adams, Regional VP UK&I at Dynatrace

In the retail industry, customer experience is everything. Most retailers have already been on a transformation journey centring around this for some time. However, over the past 18 months, changing consumer expectations and needs have accelerated digital transformation roadmaps dramatically. Our research revealed 89% of retail sector CIOs say digital transformation has accelerated, and 61% predict it will continue to speed up. To keep up with these demands and become more customer-centric, retailers need to change their approach to transformation.

Whilst modernising technologies and processes is still key, it’s no longer enough on its own. Retailers must embark on a full-scale business transformation, focusing on people, processes, roles, and responsibilities, as well as measurement and execution. Teams across entire retail organisations – both in IT and the wider business – must all work from the same playbook and align on shared goals. This will enable retailers to move their entire business towards the goal of becoming truly customer-centric. There are two key pillars retailers should build this transformation upon.

Measure success in a meaningful way

Retailers are continually developing new customer-facing digital experiences to meet the needs of today’s consumers. It’s critical that they measure these experiences to understand whether the new innovation projects they are executing are having the desired impact on business outcomes. There are multiple technical and business metrics that can help retailers to do this. These include quantitative technical metrics, such as application response time and availability, and business metrics, such as conversions and abandonment, and real-user sessions.

When collected and analysed effectively, these metrics offer a window into how both technology and processes are impacting customer experiences. In turn, these insights can be used to inform the wider business transformation strategy, by identifying key priorities, goals, and KPIs to strive towards. However, gathering data across different touchpoints, channels, and systems, and understanding all of this data in context, is no easy feat. IT teams are faced with an unprecedented volume, velocity, and variety of metrics, logs, and traces from the observability solutions they use to monitor the technical performance of their cloud-native applications. When this is combined with the user-experience data and business metrics from the solutions being used to monitor customer journeys on the front-end, it becomes a significant undertaking to unlock and execute on insights.

IT and business teams need a way to cut through the noise and complexity, make sense of the data, and identify how services can be optimised for customers. This can best be achieved by taking a platform-based approach that is underpinned by a single data model, where technical and business metrics can be analysed within their wider context. Combining this platform-based approach with powerful AI capabilities can help retailers turn all that data into precise answers that reveal where transformation and innovation will have the greatest impact on business outcomes. Equipped with this clarity, retailers can define service level objectives (SLOs) that encompass goals for their teams to execute on to improve customer experience and enhance operational delivery.

Collaboration is key

As calls to innovate faster and become more agile mount, and as customers continue to seek out the best, fastest, most seamless experiences, closer alignment between IT and the wider business will be key to ensuring that everyone is pulling in the same direction. However, this is often easier said than done, as every organisation experiences teams working in silos. The use of different monitoring and analytics solutions is also common and can mean that each team has their own version of the truth, which often leads to contention and hinders collaboration. Data is siloed, productivity slowed, and time is wasted pointing fingers when issues arise. Our research found that IT and business teams in retail organisations waste an average of 9.3 hours every week trying to combine disparate data to find solutions to problems, draining time from innovation. If left unchecked, this could put the future customer experience and the success of the business at risk.

To tackle this, there needs to be a major transformation, not just of technology, but of business-wide culture. Retail business leaders must encourage employees to change the way they think about their roles and take on a more collaborative approach. This can help IT teams to shift their mindset and ensure that at the heart of each innovation project is a clear vision for how it will drive operational excellence that supports great customer experiences.

This can also be supported through an AI-powered platform-based approach to managing customer experience and business outcomes. With everyone working from a single platform, and receiving the same precise answers to their mutual problems, the entire business will be able to identify key objectives that their teams can work towards to improve customer experience and the operational delivery underpinning it. Leaders can also define shared KPIs and SLOs that can be used to measure the impact that IT innovation is having on customer experience and business outcomes in a more meaningful way.

Transforming with the future in mind

With customer-centricity now top of the agenda for retailers, continued transformation is a business imperative. This goes beyond technology, and must also encompass people, processes, roles and responsibilities, measurement, and execution. Transforming the business in this way will allow retailers to move from a reactive model to one that’s inherently proactive, anticipating the future needs of their customers and providing unrivalled shopping experiences. It’s no doubt a heavy undertaking, but this business-wide transformation will see retailers thrive, grow their customer bases, and remain competitive long into future.