CSCMP's Supply Chain Quarterly
February 22, 2020
Forward Thinking

Survey: Just 3 percent of retailers have completed digital transformation projects

Companies plan investment in big data and analytics, the internet of things, and machine learning, SAP says.

Retailers have high expectations for the potential of digital transformation to boost their revenues, but few are actually meeting that goal. According to the results of a survey released Monday at the National Retail Federation (NRF)'s annual convention and expo, only 3 percent of retailers have completed companywide digital transformation projects.

The bulk of retailers investing in digital transformation have only begun the process, with 22 percent still in the planning stage, 55 percent running pilot programs, and 19 percent saying they have completed projects in some areas of the business but not others, the survey sponsored by German software vendor SAP SE and conducted by the U.K.-based market forecasting firm Oxford Economics shows.

The most common digital transformation projects span the areas of big data and analytics, the Internet of Things (IoT), and machine learning, respondents said in The SAP Digital Transformation Executive Study, a survey of 3,171 executives from 17 countries conducted between January and May of 2017.

Companies investing in those technologies have high expectations for the results, with 50 percent of midsize retail companies and 44 percent of large retail companies saying they expect their revenue be 5 to 10 percent higher next year due to digital transformation projects now underway, the study found.

Companies will also judge the success of their digital transformation efforts by their ability to reduce costs and increase efficiency in areas such as returns and reverse logistics, inventory planning, and click-and-collect or buy-online-pickup-in-store (BOPIS), Achim Schneider, the global head of SAP's Retail Business Unit, said in an interview.

"The digital supply chain is becoming more important, because companies are realizing that the supply chain extends all the way to the end consumer, not just to the store," Schneider said. "Retailers are asking 'What can we do to improve this scenario?' so they can avoid the cost of handling massive amounts of returns, or balance brick-and-mortar inventory with online sales."

Ben Ames is Editor at Large and a Senior Editor at Supply Chain Quarterly’s sister publication, DC Velocity.

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