Digitization doesn’t mean building a skyscraper on top of an Old Pyramid

During the course of human civilization, we evolved a lot in terms of technologies, the way we build our houses, towns, buildings, etc.

When Dubai decided to build skyscrapers they didn’t think of transforming one of their old fortresses into skyscrapers nor did they make it on the top of an existing fort. Also, Burj khalifa is not the first skyscraper in downtown Dubai instead, they started building several others and as an epitome, they created Burj khalifa.

You might be wondering why I have started with this example/analogy. I believe keeping this example in mind will help you in connecting the things which I am going to discuss below.

When you analyze the retailers you will realize a pattern. Everyone is considering digitization/e-com/app as using their existing ecosystem. Remember when Dubai thought of building skyscrapers they didn’t build them on top of the existing buildings.

Retailers have to keep in mind that, earlier you used to bring the customers to your stores so that you can showcase your products. When they come into your stores you give them the best experience you can. But now the world has changed, now retailers are in the pockets of customers. They see and compare your products with many other retailers in the world. They can compare you with anyone of their choice.

There is no one size fits all strategy for digital transformation. But when you look at the successful retailers who have digitally transformed you will see some similarities to the first example I mentioned.

They never tried to force-fit digital into their existing fortress instead they approached digital as a new skyscraper and reused the materials they can from the old fortress. Those who tried to build a skyscraper over their old fortress are still limping, complaining, crying, and nailbiting.

Why retailers are doing this?

When you look at the retailers almost everyone is trying to build skyscrapers on top of their existing fortress. That made me think why is this happening?

So let’s go back in time, most of these big retailers started as small stores in a small community where they knew almost everyone. The customers also knew the store staff ( most of them were the owners of the shop).

From that small community store, they started growing and started opening stores in different communities throughout the country and eventually in different parts of the world. This journey was a natural transformation as they grow they started adding technologies that support the brick&mortar growth. As a customer, if I want something then I have to go to the nearest store to get the product, and if I have to return that I have to go to the store again. Customers didn’t find it difficult because there was a store in every community. This is when technology started changing, the internet and mobile became so common and approachable to almost everyone.

Along with this, a new wave of retailers started emerging who were telling the customers that “you don’t have to come to the store we will reside in your pocket or home, you watch/buy at the comfort of your home”.

The old brick&motor retailers didn’t take it seriously they laughed at it. “Blockbuster” was one among them, when Netflix started they might have laughed at it. But soon they became part of the history.

That was an eye-opener for many others they started realizing that they have to do something to onboard this bus. Many of them started digitizing their business but they approached it as if like building a skyscraper on top of the current forts/pyramid. This didn’t work out and many fortresses have fallen.

The reason for the failure was they all approached digital as an addition to their existing brick&motor technology and processes. When they extended their existing brick and motor technology to the pockets of customers it ended up like “Modifying an old Toyota corolla to look like a Tesla”. The moment customers pushed the pedal they started realizing its the same old petrol engine under the hood.

What should the retailers do?

Retailers have to understand that they are not just a shop which is inside a mall or a part of the community but with the technological changes, they also have to exist in the pockets, wrist, cars & homes of customers. When you move from mall to wrist of a customer you have to be nimble, agile, and quick.

The best way to adapt to this is to reverse your thinking. Right now many of these retailers are building a small digital extension of their old technology & processes and putting it in customers’ pockets as a website or app.

This is the same as modifying the Corolla to make it look like a Tesla. So reverse the thinking and put a digital-first strategy (Not just in your marketing campaigns or leadership talks). Redesign your landscape and processes to match with the new world then slowly modernize the old fortress in the meantime slowly correct the basics to adapt to the world of skyscrapers and start building the skyscraper using the knowledge you acquired over the period of time. You have to understand that “In order to offer flexible service the business itself has to be flexible”

If not,

The old fortress which you have will soon become part of history and will be remembered as a lost town of glory”.

The choice is yours and only you can decide how you want to be remembered in history and the future.



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