The modern industrial economy, as is prevalent today, emerged after the Industrial Revolution, with its roots in the widespread economic concept of maximizing self-interest. The concept of retailing goes back centuries, to what is more commonly known as barter. Goods were exchanged for other goods, which eventually came to be exchanged for money.
The world has been growing at a fast pace, with the emergence of technology. The increasing sophistication of technology from the steam engine and discovery of electricity to telecommunications, the Internet and biotechnology, can be seen as a haphazard confluence of the breakthrough of geniuses, or it can be seen as an evolutionary pattern.
One of the branches of this increased sophistication in technology can be termed as digital transformation. In simple terms, digital transformation is a process of forming strategies and planning for organizational changes. It begins with empowering the employees with new tools and methodologies to create data-driven strategies and innovations. Digital transformation links everyone in the global network. Through digital transformation, organizations can improve their decision-making quality of the management. It can also develop new product and services at a good pace. It is the transition from a world centered around hardware, software and infrastructure, to a world of virtual machines, software as a service and cloud-based IT.
There are two sides to this transformation: the technology side and the human side. The technology side is easily understood by businesses and IT organizations, but it is the human side that gets overlooked. Effective digital transformation is about how people adopt and use the technology, rather than the technology itself. It is more about their efficiency in using that technology. The latter half of the 20th century has seen the emergence of the supermarket as the dominant retail form, globally. The reasons, as to why the supermarket emerged as the dominant retail form, are not hard to find. The convenience in shopping and consumption, the rise in incomes, and the emergence of new tastes and preferences, all led to the growth of supermarkets globally.
On the global retail stage, there have been significant improvements over the past decade. One of the few similarities with today is that Wal-Mart was ranked the top retailer back then, and it still holds that position now. Other than Wal-Mart’s dominance, today’s environment has undergone a drastic change, as compared to the 1990s, before the advent of globalization. The global economy has changed, consumer demand has shifted, and retailers’ operating systems are more infused with digital technology than they were a decade ago.
Wider markets, fierce competition, and restrictive legislation have relentlessly pushed major retailers into the globalization mode. After the advent of globalization, numerous governments have opened up their economies, and free markets and foreign investments have boosted the growth of many retailers.
From an operational point of view, however, retailers have faced difficulties in the form of deflation, lack of pricing power, global over-capacity, low interest rates, economic stagnation, increased competition, declining consumer confidence, and others. However, even before the global economic downturn of the 1990s, technological advances and digitization were a way of life for retail organizations. Technology has become the real enabler for retailers over the last six years. However, with all the emphasis on technology and cost-cutting, a major thrust of retailers continues to be demand-based: finding more and new markets through globalization efforts.
Four years ago, more than half (53%) of the top 200 retailers operated in only one country. Today, only 44% remain single country merchants. This implies that the efforts made through globalization can only intensify in the recent years. The benefits of increased sales and greater economies of scale are too pronounced to be ignored.
Retailers are undergoing a myriad of changes in order to keep pace with the fast-changing world. Consumers today have become the driving force behind this, with their increased demands, total personalization, and varied interactions across a wide variety of channels. More often than not, consumers are being called ‘digital’, because their buying habits are no more limited to going to a brick-and-mortar store, or even a mall. In fact, they literally carry retailing in their pockets now, with the advent of smartphones.
Retail companies are stumbling over the heaps of customer data that are extracted from the myriad information provided by the customers on a daily basis. Any mishandling of this data might lead to incoherent customer experiences and feedback, and the retail companies would face severe difficulties. In order to minimize these difficulties, retail companies use the SAP Hybris software. SAP Hybris is an e-commerce suit with customer-centric and data-centric capabilities which enhance the flow of information, the timeline of workflows, the performance of processes, and the relationships with customers. There are a lot of features which are beneficial with relation to automation and digital transformation, which they bring for the businesses.
SAP Hybris proves to be an effective tool for these retailers to adopt. According to a survey sponsored by the department of economics at Oxford University on January 10, 2018: · Fifty per cent of midsize retail companies and 44 per cent of large retail companies expect their revenue be 5 to 10 per cent higher next year due to digital transformation. · More than 50 percent of large and midsize retailers consider speed to market the most important revenue growth driver for the next two years, while investment in digital skills and technology is a priority (48 percent) for the top 100 retailers. The digitization of everything dictates further trends, and makes retailers invest more in tech solutions to achieve consumer loyalty. They adapt newer technologies to make business improvements, to cater to consumer needs.
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