It is Indispensable for Retailers to Embrace Digital Transformation
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It is Indispensable for Retailers to Embrace Digital Transformation

By: Jean Laborde, Deputy CIO, FnacDarty

Jean Laborde is the deputy CIO of FnacDarty, a European leader in the distribution of cultural goods, leisure, technical products, and household appliances. Jean is responsible for the management of IT teams who are in charge of software development, integration, and availability.

1. How do you think e-commerce is changing the way people are shopping in today's era, and how is your company leveraging technology for its operations?

With the advent of IT in the retail sector from the last two or three decades, the industry known for its manual processes has been witnessing the digitalization of small actions and processes. However, lately, the emergence of e-commerce and the prevalence of mobile devices among clients have created a gap between the store-based retailers and pure players. Among the retail players taking advantage of the digital capabilities and technologies is Amazon, that has been successfully developing business across the globe, including the U.S., Europe, and Asia.

"Digital transformation is your North Star, and you need to identify it and understand why it is the answer to your problems"

At Fnac Darty, we work with stores selling high tech electronic products, electrical home appliances as well as cultural products (books & ebooks, videos, toys). By recognizing the potential of going digital, we had started developing our website for more than two decades ago. We also have implemented an omni-channel strategy that brings together digital websites and stores to function as a single entity. We continuously introduce new services that keep us ahead of other standard retailers. For instance, express delivery service enables our clients to purchase online and collect the products from the store less than an hour later. The deployment of innovative services early on has taken us at par with pure players such as Amazon. For instance, products lesser than 30 kgs ordered before 24:00are shipped to all the places in Paris Region and reach before next day noon what is faster than the Amazon Prime facility.

With small and big retailers upping their game to compete with pure players, leveraging advanced technologies is vital today. Hence, the opportunity to develop digital features is close behind good pricing or good marketing approach. In short, retail is all about the process, interacting with the clients, explaining the trends and market landscape, and using technology for that is magical.

2. How challenging is it for the brick and mortar stores to deploy technology at stores, and how does it elevate their processes?

Deploying technology is a huge challenge for brick and mortar retail because technology has evolved quite fast. Especially when you operate stores, you need to have a good strategy and stick to it because when you are introducing new digital processes and features in the store, you might have to install and deploy new hardware along with training employees in hundreds of stores spread across the country or the region where you play. If the geographical stretch is quite big, it takes time to deploy the technology. Hence we need to be very consistent in the direction we are going, have a very clear strategy of what technologies we want to deploy, why we want to deploy them, to implement what new features, to digitalize what process, to gain what level of productivity or to help employees or customers directly the way they shop, the way they interact between the websites, and what they need in-store. Another challenge is with the skills of the people that are involved in those projects considering the speed of technological change. It is a challenge for internal teams to stay at the right level of expertise in new technologies. If you don't re-skill your people regularly, they won't be able to take the opportunities to develop a new service, for instance. The third challenge faced by brick and motor retailers is when building an efficient multi-disciplinary team. I believe this is important because technology itself is now available almost on-shelf, however, what really tricky is the possibility of the technology to something that will apply to your problem or to the client services you want to deliver. This comes into play between the technology, the business, and the operation on the field or in-store where we have to create smart teams that are able to transfer the technology to something in operation.

3. In your opinion, what are the best practices while initiating digital technology transformation for retail?

When launching a major digital technology transformation, the starting point is to ensure that all the key stakeholders part of the transformation and impacted by the change are well-aligned to the business goals targeted by utilizing the digital transformation. A digital transformation should not be initiated because its trendy or everyone is doing it. Instead, you need to incorporate the technology as a way to solve your problems or increase the performance, the productivity, and the service level that is delivered to the clients. Digital transformation is your North Star, and you need to identify it and understand why it is the answer to your problems. Once you succeed in aligning all stakeholders of business, including store operation directors, logistics team, IT, and HR department, the next prerequisite is a high-level sponsorship because digital transformation is a tough journey for many as it impacts their day-to-day work, the tools, and the processes they use. When going digital, you must not rebuild exactly the way it worked in the past; instead, you should reengineer the process. During this course, you will find the need to redefine the roles and responsibilities of people involved in the business. Hence the impact of the transformation on the roles of people must be well-assessed and made a part of the design process. For instance, while identifying the change and collaborating with teams to co-create the processes, it is essential to increase the level of internal communication. Any information regarding the transformation, whether it’s the process or the milestones that are planned or any new business impact resulting due to this transformation, should be communicated to the stakeholders. Along with the internal employees, explaining the major transformation to potential hires can attract new talent resulting in more efficiency and high performance.

Lately, I have been going through the transformation of time charge of omni-channel and supply applications at my company, and I had hired few people with expertise and knowhow in a few areas where I lacked. The new people hired turned out to be a catalyst that accelerated the transformation because they had the right skills for the process as well as to help others acquire them. They possessed skills that complemented the internal skill sets I already had in my team. So hiring new people to fulfill all the skill requirements and placing additional leaders can be helpful when a major transformation involving about 100-200 people, for instance, is required.

4. What would you say are some of the changes you would like to see for the future in terms of technology implementation at retail outlets?

My analysis at this point is that two main factors will continue to change the way clients go shopping and how retailers can deliver more efficiently at lower costs. The first one is Robotic Process Automation (RPA), which is a trend becoming more matured at this time. RPA techniques are suited for back-office services, for instance, in contact centers to increase the integration between legacy tools not yet renewed. The second trend disrupting the industry is AI. In Fnac, we use the Ai algorithm and machine learning for book sales forecasting. Also, on both Fnac and Darty websites, the AI algorithm is used to personalize the products recommended to the customers. We can see that AI has been used in a wide variety of areas ranging from forecasting of logistics to customer call service. These trends will help to increase productivity and simultaneously reduce the cost of the retailer, helping us fight in the persisting competition in the industry.

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