The retail industry is rife with digital innovation and organizational change. Consumers— drawn to the ease and convenience of always being just a click away from user reviews, comparison pricing, and endless aisles—have come to rely on online and mobile shopping. It is no surprise that traditional retailers are bringing digital channels into stores to tap those consumer preferences. At the same time, historically pure-play online retailers are increasingly opening brick-and-mortar shops in high-profile locations, seeking to capitalize on the tangible experiences that cannot be delivered through a device. Both traditional stores and pure-play online retailers are working toward the same goal: to create a highly personalized, consistent, and integrated shopping experience across all points of contact between retailers and customers.
Because so many traditional retailers have begun to experiment with digital technologies in stores, The Boston Consulting Group examined how companies with advanced digital strategies are performing relative to their peers. BCG’s analysis indicates that brick-and-mortar retailers that implement digital technologies in stores—both to enhance the customer experience and to improve employee performance—tend to outperform retailers that have not yet implemented a digital strategy. In our survey of 25 fashion retailers based in Europe and North America, companies that are leaders of digital implementation in stores showed stronger EBIT growth than digital followers. (See Exhibit 1.) We define leaders as those that have fully integrated digital technologies into their daily activities, pursued a multichannel strategy, developed a data analytics capability, and integrated digital into the in-store experience.
As the pace of innovation accelerates and as digital technologies influence the buying decisions of a growing percentage of customers, retailers need to act. Our research shows that even a modest investment can deliver rewards, particularly as digital solutions—often powered by third-party developers—become increasingly available and financially accessible. The truly cutting-edge innovations may be most appropriate for companies with the resources, customers, and culture to support the required investment, but affordable solutions are now available to retailers of all sizes that seek to launch an in-store digital strategy.