Blog Post - Martin Girdlestone, Apr 21 2016

​Retail’s digital skills gap (and how to bridge it)

​Retail’s digital skills gap (and how to bridge it)

By Martin Girdlestone, Head of Consultancy

Recent research on British retailers found a shocking shortage of ecommerce experience. According to DHR International, only five per cent of executive directors at the leading UK-listed bricks and mortar retail companies have an online background. On top of that, a separate study suggested that the majority of retail board members have experience in only one commercial discipline, such as retail store operations or product. This puts more traditional retailers at serious risk of falling behind the newer, digitally native online retailers, who have built their businesses around their digital offering.

This shortage in ecommerce experience may reflect the fact that traditional retailers only recognised the importance of digital relatively late on, and are now playing catch up. It’s clear from research that we commissioned from Forrester that businesses do now recognise digital’s significance. Of the businesses surveyed, 81% stated that they have a clearly defined and articulated digital strategy. However, it appears that retailers have not yet recruited the ecommerce talent that they need to realise the full benefits of digital.

Having digital skills within the business offers clear advantages for retailers. Digital channels have never been more important for consumers, who now routinely use a mix of channels to make purchases. Retailers must look to enhance customers’ online experiences to build loyalty and set themselves apart. The collection of valuable personal data is also offering retailers new opportunities. Having digital skills in house enables retail businesses to see how they can best take advantage of digital.

In house digital experience also helps businesses to respond to new technological developments at speed. Currently retailers are considering how virtual and augmented reality technologies could form a part of the customer journey. The Internet of Things offers fascinating possibilities for changing the way consumers shop, which is already being seen in the Amazon Dash button; at Salmon, we predict that there will be a new paradigm in shopping, called Programmatic Commerce. Retailers who can take advantage of these technologies quickly and with originality can set themselves apart – and potentially avoid falling victim to more agile market disrupters.

However, many retailers are being held back by treating digital as a separate entity – as is encapsulated by companies developing specific digital strategies. This is also reflected in talent policies, such as the growth in the role of the Chief Digital Officer (CDO) or companies making an ‘ecommerce hire’. But for true digital advantage, rather than creating a digital strategy, businesses should be making their strategy digital – integrating technology into the overarching business plan.

Our research with Forrester has shown that this holistic approach is vital for success. Companies classed as digital experts focus digital transformation on the customer – aiming to generate new revenue, attract new customers and launch into new markets. By contrast, laggards focus on internal processes and efficiencies. Digital experts also assess digital requirements across the business, then bring together cross-functional digital talent to deliver objectives, making digital part of the whole picture.

And similarly, digital skills should exist across the business, rather than being concentrated in a few individuals. Businesses should not look to make a single hire at board level, but create an active digital talent strategy across the organisation. This may involve upskilling the existing workforce; younger, digitally native employees may be able to provide mentoring for other team members. Digitally skilled individuals should be added to all parts of the business, to take advantage of front and back end digitalisation. And of course, the team can be bolstered with strategic consulting and specialist support from companies like Salmon. By approaching digital as part of the business plan, both strategically and in the talent pool, retailers can take full advantage of digital – and avoid being left behind.