Digital disruption and the future of retail


We hear so much about the digital disruption of sectors, industries and business models. The digital transformation even provided the catalyst for the Arab Spring, the biggest political upheaval in the middle mast in a generation. So why is retail so unaffected? We have interviewed some digital experts who expect the digital disruption to hit retail, soon – coming to a mall or high street near you.

Retail stores of the future

Graeme Codrington, futurist and founder of TomorrowToday expects this disruption will happen sooner rather than later. Retail is sticking with its traditional business model – involving large stores, warehouses, and distribution. All of which are cost intensive. Digital disruption will change that. People browse items in stores, but purchase online or on smartphones, and have items delivered. Stores will have to adapt to become places of engagement and interaction with the brand, instead of just retail outlets.

Digital disruption driven by loyalty card data

Most FMCG brands and retail chains have loyalty card schemes. These collect vast amounts of data on purchasing habits, customer and locational based information. But what are retailers doing with this data? Not enough, is the answer from Dr. Manuel Aparicio, CEO of Saffron Technology. They want to, but they are not maxamising the value of this knowledge. Once data analytics is integrated into the retail marketing mix it will drive forward the digital disruption of the sector.

How digital disruption can reduce retail costs

Keith Holdt is Investment Director for Lloyds Development Capital, and is a strong advocate for digital disruption. For retailers, with thousands of suppliers, the reconciliation of stock from point of order to point of delivery is a costly and time consuming affair. Holdt is confident that if this can be made purely digital, automated, and more efficient it will drive costs down and create large savings for retail chains.

Digital disruption of retail

The digital disruption of retail is going to happen on two levels: internal and external. Mobile retail, and turning stores into brand experience outlets, will disrupt things externally. A recent study by McKinsey Global Institute suggests there are massive benefits from unlocking social technologies for collaboration within organisations. The study suggests that if consumer brands use social technologies and digital disruption to the full potential they represent, they could increase margins by as much as 60 percent.