As Amazon and Alibaba continue to gain market share in several geographies, retail’s existential threat is not going to wane. Other disruptive models are emerging such as the combination of insurance giant Aetna with CVS, and the planned merger of Asda and Sainsbury’s in the U.K. Target’s purchase of Shipt, and Walmart rising as the victor after battling with Amazon to acquire Flipkart in India further show the rapid impact of digital transformation. In a recent Gartner survey, retailers indicated that they clearly understand the danger presented by new market entrants.
In fact retail placed itself at the highest risk of all industries surveyed. However, the perception of risk does not appear to be enough of a catalyst for moving decisively toward transformative business models across the industry. Despite the urgent nature of digital business transformation, only 3% of retailers are harvesting results from delivering and scaling digital business initiatives.
Customer experience is the battleground for the future of retail, but retail respondents overwhelmingly (63%) identified customer engagement as being at significant risk of disruption. This is an extremely real and dangerous threat. Disruptors seek the weakest parts of the customer experience, emphasizing the benefits of their solution and converting customers in the process. Every retailer must carefully examine the daily experiences of its best customers. If a retailer is not already losing customers, now is the time to find the weaknesses in its engagement with customers. The retailer should be asking itself the question: How easy would it be for us to disrupt our business?
Gartner clients can read more results from the survey and recommended actions here: