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Top Challenges to Digital Transformation in Retail

The entire retail sector is much more focused on the digital world than it used to be. is now the U.S.’ leading retailer, and veteran store-keepers such as Sears, which are associated with bricks-and-mortar locations, are in danger of bankruptcy.

Online is the retail wave of the future.

While the retail industry and consumers have embraced digital transformation, some challenges remain.

A Legacy Mindset

The first, highlighted in a recent Market Week, is that many retailers — and retail company boards — have a legacy mindset. As one retail executive points out, legacy companies are trying to change something already in place — potentially, in place profitably for a long time. That’s simply harder, both in terms of business strategy and process, than working in start-up conditions, where everything is new. There’s more resistance at a legacy; less resistance at a start-up.

The solution?

  • Talk in terms the company and the board can understand. Offering wares and selling them is pretty much the same whether the customer walks by on the way to market or logs on. Only the process has changed. Talk about the commonalities more than the differences.
  • Don’t make digital transformation seem foreign by using “foreign” tech language. A platform is a platform. It could be a rack on a sidewalk or the back end of a computer. Don’t inundate retail executives with jargon. Talk about what they know and how digital transformation helps.
  • While the retail sector employs many creative people, it sometimes lacks depth in areas helpful to digital transformation, such as data science and information technology. For digital transformation to be optimally successful, more strength and sophistication in these areas will be needed.


This year has seen an implosion of bricks and mortar retailers, from Payless Shoes to Macy’s to J C Penney’s. While it’s clarified the future of the sector for many people, it’s also been something of a shock.

The solution to anxiety over the future, according to Forbes, is to focus on potential opportunities. There are 10 times more opportunities than there were 10 years ago, Forbes points out, many of them opened by online retailing and digital opportunity.

  • Retailers now enjoy a continuous selling cycle. Consumers can literally shop and place orders 24/7. Nimble retailers can take advantage of that continuum, for example, by selling globally.
  • Barriers posed by geography are pretty much a thing of the past. At one point, start-up retailers had to be physically near their customers, and ideally, close to a lot of them. It was, therefore, hard to begin a business if you weren’t in a major urban area.

Now, a dynamic business can be started from anywhere with a wireless connection. It opens the door, not only to geographically dispersed talent, but to retail entrepreneurs who want to lower the costs of living in astronomically high rent cities. That can only be good for creative retail ideas.