It makes sense that a strong digital deflation plan that starts with a consultative approach can create significant value. However, the key to success is to consider the performance of all customer journeys and touchpoints to select high-value digital initiatives. Gartner defines this as a route-to-market strategy - “a commercially incentivized method of reaching, selling and transacting to drive revenue and profit within an identified target market or segment.”
The route-to-market strategy can be a game-changing alternative to conventional digital transformation when used to identify opportunities for digital deflation. However, many retail CIOs still have reservations, especially around the lack of shopper data, limited analytics for promotion plans, pricing conflicts across channels and the lack of a single view of the customer. However as customer profiles become more diverse and economic challenges increase, retailers need to align their digital initiatives with their route-to-market strategy.
In difficult economic conditions, retailers can use their route-to-market strategy to drive growth based on five drivers. The Route to Shopper from Asbiverse is a systematic way to do this by evaluating People, Processes & Technology and how they can help retailers to:
- 1. Get new customers: Identify what potential customers want and understand what products or services they value the most.
- 2. Augment customers spend: Look at the most profitable channels and establish where you can get the greatest access to target customer segments.
- 3. Increase frequency of purchase: Manage the customer experience and drive cross-channel experience with personalization and real-time insights.
- 4. Nurture and grow profits: Track the right metrics and KPIs to meet sales targets and manage value chain optimisation.
- 5. Build cross-functional capability: Ensure that all departments develop cross-functional capabilities and multi-party collaboration to enhance customer experience.
This approach moves retail CIOs away from the missed opportunities of high-cost transformation projects to an outcome-based model where digital tools are a route to growth.
The Benefits of Digital Deflation
CIOs can develop a clear plan for digital deflation through their technology initiatives to avoid missing out on opportunities to sell more.
Here are some of the most powerful benefits of using digital initiatives to lower costs:
- 1. Deliver your products to customers at lower cost
- 2. Reduce labour, production and delivery costs
- 3. Increase productivity and make better technology decisions
- 4. Fund the right projects when investment is limited
- 5. Use automation to allow teams to focus on high-value tasks
- 6. Select partners that help you to use digital to meet customer expectations
Conclusion
High inflation and economic downturn have put pressure on CIOs to impact the bottom line without significant new investment. To leverage digital initiatives to manage economic uncertainty, retailers need to deliver technology-enabled business outcomes.
Retail CIOs who want to make business gains from technology need to move from large digital transformations to initiatives that deliver incremental business benefits. As such, prioritising existing or new initiatives that reduce long-term costs is ideal for retailers that are cautious about investing in new budgets amid significant economic challenges.
