Digital Transformation is Driving Unstoppable Shifts in Retail, Fujitsu Study Confirms

Fujitsu Americas

Sunnyvale, CA, August 13, 2020

Digital transformation (DX) in the retail sector is accepted as essential and is now unstoppable, according to a new global study released today by Fujitsu. More than two-thirds of retailers in nine countries¹ see DX as essential to retail technology, and only 7% disagree.

With online and physical shopping experiences moving closer together, results from the research by DataDriven for Fujitsu confirm that most DX is now well underway at most retailers. Finance departments are leading the way, with a mature implementation in place or well underway among 63% of respondents. Sales (62%), customer service (59%) and frontline retail operations (also 59%) are close behind.

Paul Kennedy, Head of Retail Industry at Fujitsu America, Inc. comments: “In recent months, COVID-19’s impact on the retail industry has amplified the need for business model agility. In this disrupted market, whether hurting or flourishing, all retailers are needing to take immediate action to define their future-state business, customer experience, and technology models that will ensure their long-term success. This new study confirms that digital transformation (DX) is a necessary and urgent step to ensure viability and growth, while also clarifying how far along we are in the journey of reinvention.”

Online and physical retail continue to move closer
DX is underpinning strategic shifts in retail identified in the global study. These include:

• Retailers increasingly introducing online sales. More than one third (34%) now offer the majority of their products and services online – a trend accelerated by the global COVID-19 crisis
• Many retailers operating a hybrid online and physical model which relies on initiatives such as ‘buy online, pick-up in-store’ (BOPIS), with almost two thirds (64%) of retailers agreeing that online and physical retail continue to move closer together
• Opening up the availability of retail data to buyers, such as current inventory levels of product – with almost seven in 10 retailers (69%) also seeing this as a positive move for vendors

Further impacts of DX on retailers:

• Cost reduction, most prominently in logistics, warehousing and transportation, noted by 21% of respondents. Other areas where DX is reducing costs are in finance (20%), maintenance (20%), operations (19%), ICT (18%) and retail operations (18%).
• In customer service, 29% of respondents report an improvement. Other customer-facing areas to show improvement are call center (19%), marketing (16%) and workplace innovation (16%).

Public cloud is outpacing private and hybrid cloud
In terms of DX technology choices, Cloud is an increasingly important component of ICT processing in retail. Software-as-a-Service (SaaS) is the most popular application source (32%). But significant numbers of retailers are sticking with in-house processing (24%) or off-the-shelf enterprise applications (18%).

Despite the massive attention given to cloud computing over the last decade, very few retailers believe it is overhyped. If anything, they say it is not being given the attention it deserves. Cloud skeptics are mainly the retailers who have retained most of their processing in-house.

AI has a big future in retail and the Internet of Things will be important – but not just yet
Artificial intelligence (AI) is increasingly important in retail, with two thirds (69%) regarding it as an opportunity and only a slightly smaller number (66%) believing it will result in a better quality of life and allow for the creation of new jobs. Although technologies associated with the Internet of Things (IoT) have many applications in retail, adoption is still slow, although 69% believe the technology will eventually revolutionize retail.

Empowering retailers to design their future transformation
Fujitsu believes in empowering customers to design their future transformation – to ensure they can best address strategic priorities and maximize shareholder experience.  The Fujitsu Co-creating program offers retailers the opportunity to harness the power of purpose-driven collaboration, and leverage Fujitsu human-centric experience design (HXD) to derive greater business value through better informed DX-related investments and decisions. Fast-paced, highly-focused co-creation sessions, led by trained FUJITSU HXD practitioners, provide retailers with the time, space, and empowerment to shape their transformation, mapped against a clear future business purpose. Offered virtually, these sessions span timezones, with customers contributing the commitment of time, diversity of participants and a transformation-driven mindset.

Notes to editors
¹ Research conducted by  DataDriven in late February 2020 among a sample of 197 ICT decision makers from all sizes of retail organization, across nine countries: Australia, China, Germany, Japan, Korea, Singapore, Thailand, the UK and the USA. The study collected two metrics: annual gross revenue and number of employees. Most respondents worked in organizations with between US$1 million and US$250 million annual revenue, and 17% in organizations with more than US$1 billion in annual revenue.

Online resources

• Report microsite: https://www.fujitsu.com/us/solutions/industry/retail/digital-transformation-trends-retail.html
• Fujitsu Connected Retail Media backgrounder: https://sp.ts.fujitsu.com/dmsp/Publications/public/Backgrounder-Retail.pdf
• Fujitsu Retail solutions: http://www.fujitsu.com/global/solutions/industry/retail/
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Date: August 13, 2020
City: Sunnyvale, CA
Company: Fujitsu America, Inc.