How Confident are Asian Retailers with Innovation?
Asia is increasingly cast as being at the forefront of retail innovation, but arguably much of this emanates from China – where retail giants such as Alibaba and JD.com seem to come up with radical new initiatives on almost a weekly basis.
When Tofugear conducted a survey among 150 retailers in Asia in 2018, it found that only a quarter of retailers in Asia believed that they set the standard for digital transformation. So why are Asian retailers lacking confidence in their abilities to innovate? Tofugear’s 2018 Digital Transformation Report provides three main reasons:
When Tofugear asked Asian retailers how they organised for innovation, it was found that the marketing department was in charge of digital initiatives at over half of all retailers. While the marketing department naturally has a closeness to the customer, it can also be argued that they may have a more campaign-focused mindset, rather than a longer-term transformation of the business. There is a case to be made for retailers to establish dedicated digital teams to oversee and initiate innovation.
Innovation is also being held back by a lack of resources. Some 50% of respondents indicated that projects are held back by being unable to point to a return on investment. However, there is always a degree of uncertainty surrounding the outcome of digital initiatives and retailers will always need to embrace ambiguity and risk if they are to stay ahead of the competition. Around 40% of retailers also said that they had difficulties attracting the right talent to oversee innovation.
3. Cross departmental co-operation
Digital transformation requires buy-in across the organisation if it is to be a success. This is reflected in the fact that 41% of retailers in Asia say that an inability to create cross- departmental co-operation can be a real barrier to innovation. New digital initiatives are often disruptive for a retailer – not just on a technological level, but also in terms of the customer, store associates and business processes. It makes sense to assemble a cross-departmental team – a dream team – to see through digital transformation and to ensure strategic alignment across the organisation. Just having one silo leading such projects is often not effective.
To gain full insight into the findings of the survey, the 2018 Asia Digital Transformation Report 2018 report is available to download for free by clicking here.
As Head of Research at Tofugear, Philip provides insight on how retailers are adapting their digital strategies to target the connected consumer. Prior to relocating to Hong Kong, he led Retail Week’s research team in London, researching the tech and ecommerce strategies of the UK’s leading retailers.