In one of the most articulate, passionately written pieces I've read for some time, Daniel Newman writing for Forbes hits the nail on the proverbial head when outlining the differences between Digital Optimisation and Digital Transformation.  In prosaic terms, optimising existing internal processes in an attempt to reduce operating costs and hence improve profitability by deploying digital solutions is often merely playing around the edges.  I say this because, as the article states, anything undertaken without a focus on the customer is something of a wasted opportunity.  In today's new order, Retail simply cannot afford to waste anything.

In the Retail world, embarking upon Digital Transformation programmes must be about putting the customer at the heart of everything.  In an analogous way, Supply Chains have been the focus of inventory rationalisation for decades, with attempts made at driving out cost by reducing inventory only to then see customer service levels suffer (sometimes very badly) and with them, the customer experience (CX).  Far better to optimise inventory levels to maintain solid operating metrics around Stock On-Hand, Days Cover, or whatever you call your KPI, which will likely entail higher stock holding but will guarantee consistent service levels, even across multi-echelon, pan-national networks.

But in line with this Supply Chain practice, true Transformation at the organisational level is far more than tinkering with a single metric, KPI or point of pain.  Yes, optimisation is important - see above - but it cannot deliver competitive advantage - instead, businesses which only 'optimise' internally can hope merely to keep pace with their market peers, not overtake them.

And so I come back to the main theme of the 2020 post-pandemic Retail re-boot: the criticality for Retail & Hospitality not to lose sight of the importance of true Digital Transformation.  The economic realities of the new skewed and twisted market are still playing out for most Retailers and Hospitality providers but survival - and with it, future growth - relies upon leveraging technical innovation to transform operations, remembering to keep the customer at the heart of it all.  It may be tempting to de-focus such perceived 'external' change programmes but the reality is that doing so risks Retailers' very existence.