"Digital transformation" is a common topic. Since the emergence of the Internet in the 19th century, e-commerce platforms such as Amazon and eBay have risen, leading the development of e-commerce. The traditional retail industry has begun to realize the importance of online channels, and launched their own e-commerce websites one after another, and has since entered the track of digital transformation.
So after so many years of digital transformation, what difficulties have retail companies encountered? Are you really on the right track? With the rapid development of new retail, how should the retail industry seize the opportunity and achieve a further leap forward? Reading this article may give you some inspiration.
1. The historical context of digital transformation in the retail industry
The digital transformation of the retail industry can be traced back to the rise of the Internet and the development stage of e-commerce.
"2022 China Retail Industry White Paper" conducted in-depth interviews with more than 20 retailers and conducted research on more than 30 CXOs
The digitization process of retail enterprises is divided into four stages:
Digitalization 1.0: IT infrastructure upgrade and transformation, business process systematization and informatization;
Digitalization 2.0: Online channels are deployed online to achieve omni-channel operations, and data insights assist some business decisions;
Digitalization 3.0: digital intelligence comprehensively applies business decisions based on big data analysis, realizes automation and intelligence, and reduces costs and increases efficiency on a large scale;
Digitalization 4.0: platformized/ecological industry or value chain integration, ecosystem construction, data technology drives emerging businesses, empowers industries and industries.
Regarding the development of China's retail industry , Yang Qingsong, secretary-general of the China General Merchandise Association, divided the development of China's retail industry into five stages :
- Early Start: Informatization and Internet Enlightenment to Solve Basic Management Needs (around 1990)
- Rapid Improvement: Internally Integrated Informatization and the First Internet Bubble (around 2000)
- All-round development: Informatization towards efficiency management and e-commerce re-explosion (around 2008)
- Fierce competition: the advent of the mobile era and the battle between online and offline (around 2015)
- Integration and complementarity: comprehensive digitalization of entities and integration of online and offline (around 2020)
Zooming in on the timeline, China's retail industry has undergone earth-shaking changes in the past ten years. Its industry structure is being subverted and reshaped at an unprecedented speed, and new technologies, formats and business models are emerging one after another. The retail industry is undergoing perhaps the most intense market competition, and at the same time, it is also giving birth to many leading companies that are determined to change and whose digital capabilities are at the forefront of the times.
In view of the status quo of digital development in my country's retail industry, the white paper summarizes the following points:
Status 1: The digital transformation of retailers is in the stage of exploring "online" (Digitalization 2.0) and moving towards "digital intelligence" (Digitalization 3.0).
Status 2: The digital construction of most retail companies still focuses on front-end channels and traffic operations, while the upper and middle reaches of the value chain and areas that are more difficult to transform are still digital "short boards".
Status 3: Retailers generally regard digital transformation as a key strategic direction for their future development and invest heavily in digital construction, but the input-output ratio is still unclear.
Situation 4: In order to drive the successful implementation of digital transformation, retailers are actively embracing changes in organization and talent, but the actual progress is full of difficulties.
It can be seen that the digital transformation of my country's retail industry has a bright future but still faces severe challenges.
Tools used in this article: https://www.jiandaoyun.com
2. Difficulties in the process of digital transformation in the retail industry
1. Imperfect development of technology and infrastructure
Retailers accepting investment and updating technology infrastructure is one of the necessary conditions for digital transformation. The main content includes hardware, software and network, etc., which may involve large capital and time investment. The rapid development of technology also means that retailers need to keep up with and adapt to new technological trends , which may be a challenge for some traditional retailers;
2. Data protection challenges
In the era of big data, retailers are faced with processing a large amount of consumer information. But privacy and data protection concerns are emerging . Some data crimes and privacy leaks occur frequently, forcing retail companies to increase data security precautions;
3. Organizational culture and personnel training problems
In the process of digital transformation, it is very necessary to change the organizational culture and personnel training within the enterprise. Traditional retail enterprises may have conservative culture and working methods, and employees may not accept new technologies and digital transformation. Therefore, personnel training to enhance the collective identity of corporate culture and improve the level of technical expertise is also a major problem facing the current retail industry;
4. The competitive market is fierce
Digital transformation has made the retail market more competitive and rapidly changing. Emerging e-commerce and technology entering the market have brought enormous competitive pressure to retailers. Retailers need to continuously innovate and optimize their business models, create better personalized services for users, and improve their competitiveness . At the same time, actively adapting to the transformation and development of new retail requires serious consideration for many retail industries.
3. How to promote the digital transformation of the retail industry
In the process of digital transformation in the retail industry, many companies have made remarkable achievements. Mengniu Dairy is one of the model companies in the process of digital transformation in the retail industry.
Let's take the digital transformation of Mengniu Dairy as a case to talk about how to promote the digital transformation of the retail industry
1. Company profile
Mengniu was established in Inner Mongolia Autonomous Region in 1999 and is headquartered in Hohhot. It is one of the top eight dairy companies in the world . The company was listed in Hong Kong in 2004 (stock code 2319.HK), and is a constituent stock of the Hang Seng Index, Hang Seng China Enterprises Index and Hang Seng Sustainable Development Enterprise Index. COFCO Corporation is the largest strategic shareholder of Mengniu.
Mengniu focuses on providing Chinese and global consumers with nutritious, healthy and delicious dairy products, and has formed a rich product matrix including liquid milk, ice cream, milk powder, cheese and other categories. In the fields of high-end pure milk, low-temperature yogurt, high-end fresh milk, cheese and other fields, Mengniu has a leading market share. In addition to mainland China, Mengniu products have also entered the markets of more than ten countries and regions in Southeast Asia, Oceania, North America and other regions.
Mengniu started the construction of the digital system very early , especially in the supply chain management, production quality management and other aspects to build an advanced and complete digital management system. However, as the digital transformation of the whole society continues to accelerate, Mengniu still has many needs for digital transformation that need to be resolved urgently.
In terms of space, Mengniu's management radius is very large. Many of Mengniu's manufacturing environments are located on the prairie, where there is a lack of digital foundation and digital talents; at the same time, Mengniu's management of a large number of suppliers and dealers needs to be connected to the digital system. Complex and diverse environments and user types bring challenges to digital management.
Faced with the ever-changing market structure, business departments often put forward various new IT requirements, and hope that the requirements can be realized as soon as possible. It is difficult for tools developed by traditional IT to shorten the distance with actual business users, and no traditional software can meet the ever-changing business needs of enterprises. In the core management business system of an enterprise, there will always be a "vacuum zone" where functions cannot be reached, resulting in "digital absence" in some scenarios.
For Mengniu's IT department, they need to continue to ensure the growth of mainstream business, core business and product quality through digital tools, and at the same time, continue to promote the digital construction of the whole group and provide incremental IT innovation.
2. Specific solutions
Against this background, Mengniu introduced Jiandao Cloud as a tool for them to quickly realize and iterate business requirements, and built applications for sales management, administrative management, IT, data, and other non-core business scenarios. In the early days of using Jiandaoyun, Mengniu’s IT department used Jiandaoyun to build some common scenarios that most employees in the company would use. Through these scenarios, employees were familiar with using Jiandaoyun and felt the convenience that this tool can bring. Account management and field punching are two very typical examples.
Mengniu has more than 40,000 employees, and has various internal systems such as SAP, OA, and CRM. Employees often need to change passwords and activate account permissions, which are in great demand. After the process of the account management system is launched, the IT department] can manage the application and change requirements of each system account in a unified manner in Jiandao Cloud. You only need to submit the process to realize password reset, account application, information change, etc.
Mengniu has a lot of people who need to go on business trips, and these employees will design many scenarios for reimbursement and subsidies when they are on the job. In Mengniu's existing reimbursement system, there is a lack of information basis for employees working outside. Mengniu uses Jiandaoyun's open capabilities to connect Jiandaoyun with the reimbursement system SAP through the API interface. Employees can locate the punch card and fill in the information when they are away from work.
After more than a year of promoting the national development model, Mengniu has trained more than 600 national developers from business departments internally. They have built more than 600 applications such as sales management, administrative office, and production management with Jiandaoyun, which has improved the efficiency of every corner of the business scene.
- Cost Calculation System
In order to estimate the gross profit of new products, Mengniu requires various basic financial data of raw materials, such as management expenses, marketing expenses, raw material costs, sales budget, etc., to be input by different responsible departments], and according to the distinction of different sales channels, the gross profit data can be seen on the dashboard through real-time refresh.
- conference management system
Mengniu built a meeting management system with Jiandao Cloud. Through Jiandaoyun, the first step is to standardize the data through meeting plans. After having a meeting plan, employees can initiate meetings through the process. At the same time, Mengniu opened up the schedules of Jiandaoyun and Dingding through the interface to realize the notification of participants. After the meeting, the meeting information is sent back to Jiandaoyun, and a template is made through the Gantt chart, so that those who need to book a meeting room can know the real-time status of the meeting room. Finally, after accumulating these data, the usage frequency of the conference room, the status of participants, and the usage of conference resources are analyzed.
After nearly a year of use, Mengniu believes that Jiandao Cloud has not only improved the work efficiency of the organization as an application tool in the digital construction of the group, but also improved the level of digitalization in non-core business scenarios and filled the "IT vacuum" outside the boundaries of the original core system.
The above templates are all from Jiandaoyun
Official website >> https://www.jiandaoyun.com
Therefore, in the process of digital transformation in the retail industry, it is very important to formulate a clear digital strategy and implement it in place. Retail enterprises need to formulate a clear digital strategy and clarify the goals and vision of transformation. This includes identifying application areas for digital technologies, such as e-commerce, big data analytics, artificial intelligence, etc., and formulating corresponding plans and timetables. A digital strategy should be aligned with the overall corporate strategy and take into account market trends and changes in consumer demand.
Of course, the case of Mengniu Dairy is just a reference. In the process of digital transformation of the retail industry, more strategic adjustments need to be made according to the actual situation of the company itself . The road to digital transformation is difficult and long, and we still need to continue to explore.
Hope this article helps you.