UK Retail Sector Harbours Digital Transformation ‘Deficit’

UK Retail Sector Harbours Digital Transformation ‘Deficit’

14th February 2024 · Arvato · Press Releases

  • Almost all UK retail firms are skipping key steps necessary to deliver successful major transformation programmes, according to new research from ArvatoConnect. 
  • ArvatoConnect provides customer experience and business optimisation services to leading retail brands.
  • The findings show that the majority of firms don’t set key performance benchmarks, secure customer and employee buy-in or have a data strategy in place. 
  • Many organisations also admit their strategies are led by technology over customers’ needs, or are driven by an effort to keep pace with competitors.  
  • ArvatoConnect says this is significantly elevating the risk of projects falling short of their potential or missing the mark completely. 

UK retailers are missing key steps necessary to achieving their digital transformation objectives, a new report reveals – creating the risk that major projects and initiatives will fail to fully deliver their intended benefits.

Nearly two-thirds (65%) of retail brands currently delivering digital transformation projects don’t have an overarching data strategy, while 71% can’t effectively gather, collate and manage data and 66% aren’t confident they can protect it once they have it.

The research, published by ArvatoConnect – formerly Arvato CRM Solutions – and which surveyed* 100 customer experience, IT and transformation decision makers in UK retail businesses, also found that 76% don’t gather feedback from customers on how their existing solutions are working and 85% haven’t trained employees on new technologies or processes.

Similar proportions admitted to not gaining customers’ (79%) or employees’ (85%) buy-in on their transformation plans, or even setting key performance indicators (KPIs) (79%).

ArvatoConnect, which provides customer experience and business optimisation services to leading retailers, says that businesses are misplacing their confidence and that skipping these important steps is creating a ‘digital deficit’ – a disconnect between transformation plans’ objectives, and the reality of what they are likely to achieve. 

james towner arvatoconnect

While our research tells us that many businesses are confident in delivering successful digital transformation projects and have such projects underway, this confidence may be misplaced.  

In retail today, competitive advantage is often won or lost in the digital realm – service quality, consistency and convenience continues to be a make-or-break, and it matters which brands can deliver this efficiently and at scale. This is partly why the programmes that are missing steps like gathering customer feedback and even setting KPIs are so concerning. 

These steps constitute key foundations of successful digital transformation projects, and firms must take this into account and focus on closing these ‘digital deficits’.

James Towner, Chief Growth Officer, ArvatoConnect

ArvatoConnect’s report also uncovered that many retailers’ transformation strategies were being driven by technology or competitive impulse, rather than by businesses’ or customers’ needs.

Nine in ten (91%) respondents admitted that their organisations’ transformation strategies were being led more by available digital solutions than what their customers or their businesses actually require. Meanwhile, 46% said their plans were being driven by a need to keep pace with competitors.

This type of transformation approach could mean that common customer experience problems are left unaddressed. A separate YouGov poll of UK adults**, commissioned by ArvatoConnect, found that more than two-thirds (68%) had experienced an issue when contacting a company in the last 12 months, regardless of sector.

James Towner continued: “Any transformation programme needs to be grounded in a clear understanding of the needs of the organisation, its customers or its citizens.  

“Organisations mustn’t fall into the trap of spending time and money on developing solutions that are then left looking for a problem to ‘fix’. 

“Taking the time to get the basics right – and seeking the right support with digital transformation planning – will only generate better results over the long term.” 

The Digital Deficit report is the first launched by ArvatoConnect, formerly Arvato CRM Solutions.

The business is a trusted partner to leading global brands, including a major high street retailer and natural health and footwear brand VIVOBAREFOOT.

Its new ArvatoConnect brand – launched in February 2024 – reflects the expansion of the business’ proposition to incorporate both customer experience and business optimisation services, underpinned by innovative, technology-led solutions.

To read the complete Digital Deficit report, click here:

digital deficit report arvatoconnect

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