For retailers who want to learn how their industry peers are thinking about and approaching top-of-mind digital trends this year, we feel, Gartner’s 2019 CIO Agenda: Retail Industry Insights offers an informative and relevant report of the predominant challenges and goals impacting the ever-evolving retail landscape.
1. ‘Digital’ Surpasses ‘Revenue & Business Growth’ as the Top Priority
Because Gartner’s report is published annually, not only does it contain the most updated industry trends and CIO perspectives, it also cites changes year-over-year. What’s one of the most notable shifts in this year’s report? We believe it’s the data point that shows ‘Digital’ has surpassed ‘Revenue/Business Growth’ as the top priority among surveyed CIOs.
This reason behind the change is multi-faceted. It’s clear an industry shift has occurred (and continues to take shape); with it, the keys to profitably and success have also shifted. The list of retailers filing Chapter 11 bankruptcy already continues to grow in 2019. We believe a proven way for retailers to avoid this fate is a sound, forward-thinking digital strategy. According to Gartner’s finding, “businesses who have already implemented effective digital practices are scaling these efforts and applying the best practices to other organizational functions,” and “laggards now understand digital and business revenue/growth are symbiotic: it’s nearly impossible to have one without the other.”
2. Artificial Intelligence and Machine Learning Has BIG Potential
For retailers, who must ensure operational uptime and rollout a forward-thinking digital strategy (often across multiple locations), the allure of AI/ML and what these technologies could bring to a business is compelling, in our opinion. After all, from our work in the industry and speaking with IT leaders, we’ve observed that most enterprises typically spend 80% of their budgets on maintenance and only 20% on innovation.
This requires costly human time and resources. If a retail organization can offload even a percentage of the human capital requirement through automation and augmenting human intelligence with artificial intelligence, organizations could focus on projects that will have a true impact on the business – not just on routine tasks.
3. Retail Market Finally Seeing Digital Maturity (and Results!)
According to Gartner’s findings in the 2018 Retail CIO Insights report, 2018 saw a substantial jump in digital maturity among the retail industry – per the chart below. We feel this will only increase in 2019. Survey results from the previous two years illustrated that “retailers’ digitalization efforts fell significantly behind other industries.”
[2019 CIO Agenda: Retail Industry Insights]
Instead of many retail CIOs in the ‘Ambition,’ ‘Design,’ and ‘Deliver’ stages of digital maturity – what Gartner defines as ‘Initiating’ – a number of retail CIOs are in the ‘Scale’ and ‘Refine’ stages of digital maturity – what Gartner defines as digital ‘Scaling.’
Why is this important? We believe this is important because the retail industry appears to be finally over the ‘initial hump,’ or the nascent testing period of digitalization. Retail CIOs are now applying the lessons learned to scale digital practices. As Gartner articulates, “this includes scaling up, to gain greater efficiencies, scaling across, to implement best practices from one part of the organization to another, and scaling out, through interconnections with internal and external platforms and ecosystems.” We think we’ll see these activities accelerate and compound retail’s digitalization efforts in the years to come.
Gain access to the full report to review all the industry findings and read Gartner’s recommendations for retail CIOs who want to embrace digital transformation in their environment.
To learn more about how Extreme’s network solutions can overcome the digital challenges experienced by retail CIOs today, and help situation retail brands for future success, visit our Retail Solution Page.
*Gartner, 2019 CIO Agenda: Retail Industry Insights, 15 October 2018, Robert Hetu