35% of retail leaders cite ROI as a key digital transformation challenge
Infrastructure issues, such as legacy systems and siloes, create challenges for 33%
24% face innovation culture challenges, from lack of leadership to strategic vision
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Abingdon, UK — Return on investment (ROI) and economic uncertainty remain retailers’ top digital transformation barriers, according to new figures from PMC, a global leader in commerce technology, with the trade-off between innovation investment and margin protection creating opposing pressure points for retail businesses.
Original research of over 100 senior retailers and brand leaders in its ‘Race To Unified Commerce’ report, produced in collaboration with Retail Economics, showed that ROI and overall economic uncertainty were the most common transformation challenges for over a third (35%).
Against an unstable economic backdrop, softer consumer demand, growing shopper caution and rising costs, such as NICs and business rate reforms, retailers’ competing priorities are being placed under more pressure. This means many face a trade-off between the need to invest in innovation and other competing priorities, such as cost-saving measures and margin protection.
“Despite a challenging economic reality, retailers can’t afford to take their foot off the innovation accelerator,” commented Richard Lowe, CEO of PMC. “And that means cutting their digital transformation cloth a little differently.”
“A back-to-basics approach – adopting simplified, product-led delivery models – will enable retailers to drive results from their tech stacks, without tying themselves in knots,” he added.
Speaking at PMC’s Commerce Leaders Forum earlier this year, Retail Economics’ CEO, Richard Lim, said: “Retailers face a trade-off between the need to invest in innovation versus other, often competing, business needs around cost saving and margin protection.” And this, he said, required a focus on setting – or resetting – digital foundations as well as fixing and removing siloed legacy systems.
Infrastructure challenges are also creating roadblocks in retailers’ innovation strategies, with a third (33%) reporting ongoing issues with legacy systems and a further 24% citing internal silos among the problems preventing progress.
Culture remains another key sticking point, with almost a quarter (24%) of retailers saying they face an absence of leadership support to champion tech deployments, or that executive teams lack the strategic vision to back investment needed for digital transformation success.
“Getting the fundamentals right is mission critical,” Lowe continued. “In our work with leading brands, we see that those retailers who embrace best-of-breed, modular approaches – underpinned by simple but unified data integrations – cut the cost of complexity while driving tangible performance.”