As massive digital innovation and disruption happens in the retail industry; the role of a CIO in helping achieve key business goals has become more and more crucial. As a CIO, how does one choose between various transformation efforts? What are the parameters, based on which a CIO can prioritize the many projects? And, what is that one question every retail CIO must answer? Read on to find out…
At a vast majority of retail companies around the world, the CIO’s office has been tasked with working closely with various functional heads (and the CEO, of course) to lead a slew of digital transformation programs. These transformations are happening across all business functions – in-store, e-commerce, social and mobile transformations, data analytics for understanding user behavior, and of course, warehousing, logistics, supply chain and other back-end processes.
The need for such transformation actually comes from consumer behavior. A PwC survey of 23,000 shoppers surveyed in 25 countries shows that 54 per cent buy products online weekly or monthly; 34 per cent use the mobile phone as their main purchase tool; and 67 per cent were influenced by reviews on social media. These may be obvious pieces of information, but for retail CIOs, this change in fundamental consumer behavior means a slew of digital transformation programs.
A Deloitte study in May 2015 showed that the use of digital devices before or during in-store shopping trips were responsible for converting a whopping $970 billion in sales, representing 28 per cent of the total in a given month. This includes emerging tech like location aware apps, wearable devices, new age in-store tech and payment mechanisms.
Additionally, data is key to understanding user behavior, and therefore, retail analytics has become a whole industry by itself, expected to touch USD 5.1 billion by 2020 (according to Markets & Markets).
Even as CIOs engage in digital transformation, it is crucial to ensure that your systems run with minimal glitches. However, a step before that is to make sure the basics don’t fail.
Here’s a starting checklist for leaders in the retail industry; And, these are applicable not only to the big boys of retail – the likes of Walmart and Costco. In fact, according to Deloitte Digital’s 2015 paper on ‘Navigating the new Digital Divide, the top 25 retailers in the U.S. have lost 2 percent of market share since 2009, to the tune of nearly $70 billion in sales that have moved to smaller players. If you lead a startup or growth company in the retail segment, with plans to scale up, this checklist will come in handy.
- Balancing legacy & new: As retail technology grows by leaps and bounds, the ground reality is that legacy systems stay on, even while new infrastructure is added. This creates IT silos that pose a challenge to efficient branding, marketing, merchandising, customer service and selling across multiple retail channels. This can hamper user experience at multiple levels – including simple issues such as items added to the cart, not making it to the billing. According to the Deloitte Digital Transformation survey, of nearly $13 billion in eCommerce transactions, as much as 60 per cent drop off due to poor compatibility between systems. Varying network strengths can also slow down system performance and the subsequent time delay can affect the updating of databases in real time.
- Peaks and Troughs: Here’s an obvious one; The retail industry experiences acute peaks during some seasons or after a successful ad campaign. IT infrastructure not prepared for the peaks can backfire, causing shoppers to abandon the site. One of the top reasons is browser incompatibility and slow page loading times. An analysis by Kissmetrics shows that 40 per cent abandon sites with slow upload; 79 per cent of shoppers dissatisfied with a site do not return; 44 per cent share the bad experience with their friends.
- Compliance: This is becoming more and more important as US laws are ensuring inclusivity, security and standardization of various processes for better user experience. There are regulations that ensure the sites are inclusive, and complying will in fact benefit the sites by expanding their market base.On this aspect, both your software development team (in-house or vendor) and your testing vendor must understand the nitty-gritty of all governance, regulations and compliance. The key here is to go beyond the basic compliance, go the extra haul, and you’ll see it have an impact on your overall user numbers.
- Data Integrity: Digital shopping comes with customers sharing their personal data as well as using credit card details or bank accounts. Their personal preferences are tracked for cross and up selling. Any compromise in security and protection of information will cause severe eroding of customer base.
Indium’s security testing expertise, combined with a strong understanding of the domain, will be extremely handy here.
To ensure that the four pillars on which the digital store rests are robust, the testing methodology and approach has to be exhaustive. Indium’s IP-driven test automation suite (iAccelerate) has been designed just for such a purpose, ensuring completeness of the testing process.
Now coming back to the question raised in the headline of this blog.
What is that one question every retail CIO must ask themselves?
The question we believe is this:
Are your digital programs meeting the primary objective of sales growth?
This simple question is actually a loaded one. It delves into many different aspects of how well your digital programs are working? Is your e-commerce portal intelligent and decisive enough? How do you appraise the quality of its usability and workings? For example, if a user lands up in your e-commerce portal, searches for a product which is unavailable, does it throw him/her a good set of related products, that’ll push the user to stay on the site? Or, is the user abandoning your portal to head to a competitor’s? Think of your digital transformation programs as ones that catalyze, enable and support your sales programs. And, hence, your software testing process must ensure that this end goal of sales enablement is met. More importantly, as your digital software constantly evolves, your testing process too is one of continuous development.
At Indium, our deep domain expertise in the retail industry helps us support our clients through a robust testing methodology, one that combines retail industry insights and intelligence and merges that with the technical aspects of software testing.
Test Automation Framework, combined with deep domain expertise
The framework covers five critical aspects of the retail digital solution for a smooth and secure user experience:
- Rational solution: From a functional standpoint, how good is your recommendation engine? When people search or buy an item, how is it choosing relevant and related products to suggest? How does your algorithm cross-sell and upsell? How are discount offers managed? Most importantly, is the overall functionality – pricing, recommendation engine, display pictures and colors of products, etc. – working without glitches.
- Evenness: This one is a basic checklist item; Each and every version of your software needs to be compatible with a multitude of devices, browsers and operating systems. The functionality, user experience has to work as expected across all these permutations and combinations and the only way to ensure this is an exhaustive test automation framework.
- Speed: As mentioned, your digital transformation effort is a sales tool; In fact, it is the centerpiece of your sales goals. Therefore, ensuring swift, efficient and high-speed performance across all pages of your site is critical.
- Safety: While there are regulatory needs, time and again, we’ve heard of how retail brand trust is eroded overnight due to a security failure. In e-commerce, critical personal and credit card details are stored and one cannot emphasize enough the importance of security testing.
- UX: This one can be the big differentiator for your site. Search and discovery of products, the ability to give a real life-like touch and feel experience of products and the ability to cross-sell and up-sell are critical. Your product manager’s role here is extremely important and a collaborative effort between a product manager and your test lead, will go a long way in taking user experience to another level.
Indium Software’s QA approach for retail has enabled it to successfully work with several retail software developers, product managers and CIOs and deliver timely and quality results, aimed at improving user experience.
A confident answer to this question of linking digital with sales growth, will ensure your digital transformation projects meet with success.