Getting Digital: How the Pandemic Inspired the Next Chapter in Retail Transformation

The retail sector is no stranger to overcoming adversity, but few challenges have tested the resolve of the industry in the same way as the COVID-19 pandemic. As retailers were forced to reduce human contact or close their doors completely, the shift toward online shopping and digital consumption grew exponentially. 

According to a World Economic Forum report, department stores were expected to decline by over 60%, and e-commerce was set to grow by nearly 20% in 2020. As physical shops reopen, it remains unclear if consumers will return to their pre-pandemic shopping trends.

The huge shift toward online channels has only been possible through retailers’ rapid adoption of digital technologies. At Workday Industry Insights EMEA, experts, customers, and industry commentators discussed retail’s digital acceleration and the trends that prevailed during such a tumultuous period.

The Great Digital Acceleration

Ben Perkins, head of consumer business research at Deloitte, has over 15 years’ experience in retail trends and consumer behaviour. He discussed the surge of online retail channels during the pandemic. “Pre-pandemic, the share of online was 20% of the market, and it had taken 20 years to get to 20%. It’s a phenomenal amount of change for the retail industry to absorb in a very short space of time,” he said.

For retailers with a technology road map, the last two years have inspired a complete rethink for many organisations. Digital transformation in retail went from a buzzword to the top of every technology leader’s agenda. Craig Crawford, founderpreneur, Crawford IT, points to the unbelievable pace of change which retailers had to adapt to, not just at the point of sale but also in relation to their back-office operations.  

“With COVID-19, a lot of preexisting trends were accelerated. It inspired retailers to do something about the parts of their business that weren’t economically effective or efficient. It made them rethink how they must engage with their customers and how digital enables them to do that. You could say that the underlying systems which support the business underwent a decade’s worth of innovation in just a few months,” Crawford said.

“Retailers have made the leap to the cloud, and that doesn’t just mean moving legacy systems and processes into the cloud, but thinking about how you approach your data strategy and how that information is made accessible to the people who need it.”

Data Is King in an Omnichannel World

At Workday Industry Insights EMEA, one thing was patently clear—the retailers that will thrive in an increasingly digital environment will be those that have made the shift to the cloud. That means organisations that can get to grips with data and analytics, while automating some of the processes that have historically held them back. Retailers must get a single view of customer and employee data and better manage how they integrate the supply chain.

“I think that cloud is the great enabler of the digital shift. In many ways, I think the real winners of this pandemic have been the smaller, more agile brands,” said Deloitte’s Perkins. “Some of the larger ones have had to contend with legacy structures and the difficulty of simultaneously running that legacy structure and then scaling up microservices, cloud-based services, as they go.”

His colleague Bruce Jennings, partner in human capital consulting, Deloitte, UK, said: “There's certainly one thing I saw during this COVID-19 journey, and it was how Workday customers had an absolute advantage in terms of clarity and insight into the workforce that a lot of people didn't. And certainly those who are still on-premise are really struggling to get data on their people.”

Chris Shortt, group executive, information and technology at South African retailer Pick n Pay, discussed the importance of data transparency and democracy, and how his organisation benefited from such approaches during the pandemic.

“With data, what businesses have historically seen is a bit of a power base and people holding onto information. During the pandemic, one thing that’s become very clear is the importance of having open and transparent access to data to get to a place of collaborative decision making,” he said. “It’s important that people can question the integrity of data and you get feedback to say, ‘Hang on a minute. That data is not correct.’ Whereas before it was sort of locked up in a back-end system and people didn't really know whether it was right or wrong.”

As an online-only supermarket, Dutch retailer Picnic is, unsurprisingly, ahead of the curve when it comes to customer-facing digital experience, but Ewout Brouwers, the organisation’s financial lead, discussed how the business also uses data to understand working patterns and ensure it can resource correctly.

“Our workforce, especially the people who collect the groceries for the customers from the shelves, plan their own shifts. For example, we know from our data that demand is high on Monday, so we offer to pay more on that day, not on a Sunday as some companies do, in a traditional Christian calendar sense. This data helps provide a better and fairer reflection of the labour market of today,” he said.

Culture Is Key to Digital Transformation

While technology innovation and casting legacy tools into the past are key elements of retail transformation, it’s important to remember that cultural change is also crucial. Laurent Homeyer, strategic industry advisor, retail & hospitality at Workday, highlighted the importance of leaders taking the workforce with them on the journey.

“We talk a lot about transformation, but we need to remind ourselves that retail is a human business, and we need to take this factor into consideration, especially when designing tools for users. And as the transformation is accelerating, I think the platform should support that in different ways. I’d call out automation and artificial intelligence as really important. Using these technologies to get rid of low-added-value tasks should be the first priority.”

Pick n Pay’s Shortt agrees, highlighting the importance of meeting employee expectations around technology as the lines between consumer and enterprise tools blur even further.

“We have become accustomed in everyday life to picking up a mobile device for so many different tasks. We thought a lot about what would make people do the same from an employment perspective. Through that lens you realise just how complicated some of our processes had become. The goal was to make it really simple for our employees to manage the quality of their own information. If you can do that, then you take the pressure off the central HR function and enable them to do more value-added work,” he said.

For Picnic’s Brouwers, there is a balancing act to be struck between tech innovation and culture. His sentiment is that a company vision is just a vision unless it has some rigour and process to underpin it.

“I don’t think that culture is ever solely driven by a mission or a vision—you have to have the right processes to understand that sentiment and live and breathe it. Workday is a good tool to put some process behind our vision and mission. That’s important when you are trying to motivate such a large workforce,” he said.

Advice: Get on the Train Today

While the pandemic stirred most retailers into action, embracing digital and starting their transformation journey, other businesses have not reacted at such speed. Attendees at the Workday Industry Insights EMEA digital event shared their own advice for organisations still waiting to take the plunge on digital transformation. 

• “You have to get started. You have to get on the journey. You won't know the answers to start with, but they will become apparent pretty quickly as you start getting through. But you only will know once you've actually started.” —Chris Shortt, group executive, information and technology at Pick n Pay

• “It's okay to not have all the answers. But you need to have a platform and a mindset that allows you to try, learn, and move forward.” —Laurent Homeyer, strategic industry advisor, retail & hospitality at Workday

• “Customers want clarity on the sourcing and the origin of the products that they're buying. For the retailer, that is very difficult. To be quite frank, they don't know. They don't know where the packaging materials have come from or the raw materials in particular components. So a transparent, ethical supply chain is absolutely critical to being able to serve this new sustainable consumer. Technologies, such as blockchain, will play a key role in supporting the supply chain to ensure that the transparency is there.” —Ben Perkins, head of consumer business research at Deloitte 

Watch this on-demand session to learn how businesses in the retail & consumer goods sector have accelerated their journey to becoming a digital enterprise.