Do we need the digitalization of business mind in retail?

A lot of attention devoted now to the problem of digitalization in business as an important aspect of the new paradigm formation in the entrepreneurship culture. Here are novel ideas about revolutionary changes in retail as an example:  the article “Winning with digital what makes a digital leader” by Tito Arciniega, Vice President, WW Commercial Sector Industries, Enterprise & Partner Group, Microsoft Corp. Or recent Daniel Zhang’s, the CEO of Alibaba Group, presentation in Davos on “Digital tech is changing retail”. One of the main ideas of these authors is that technological innovations today conduce to mass transition to the new level of doing business. But it’s not happening of its own accord. Main role in this belongs to the captains of business and requires business leaders to change their own set of mind, in other words, a kind of “digitalization of the mind”. This leads to absolutely amazing ideas in business. So the founder of Alibaba Group Jack Ma proposed to create an Electronic World Trade Platform (EWTP), criticizing the WTO framework as outdated and bureaucratic. He stated that during World Economic Forum in Davos, which was received as a sensation.

We can state that digital innovations don’t restrict business but rather give companies a high chance for expansions in the markets. This would be impossible without the leaders being able to look at business from a new angle. The change from “continuous” to “digital” set of mind in retail allows to broaden opportunities for creating new goods and business models, it allows us to form relationship of manufacturer, seller and customer, customizing their requests and relations in a new way.

Why digitalization in retail is timely?

The basis for the successful development of any economy are consumer demand and the level of satisfaction of this demand. Retail as a form of business is linked with solution to these issues. Modern digital innovations are not able to pass the retail trade. And here are a lot of problems concerning technology adaptation.

But we think that the main problem of retail is “digitalizing” the state of mind of the business representatives. There are a lot of companies that work as they did before, on the level of handicraft trade. And they have a long way to go before successful digitalization of the mind. In this case there are two kinds of “business-species”. First are those who don’t even know that the digitalization began. Second are suffering from the lack of trust in everything new. Although they realize that the sprouts of novel are pushing way, they prefer to not risk and hold a wait-and-see attitude.

Striking example in Russian market is an implementation of a service for contactless footwear fitting in on-line retail. This technology is an obvious evidence of digital revolution in footwear retail. This innovative idea was long awaited in the community of shoemakers due to negative on-line footwear shops reviews. Numerous studies and practice show that not less than 50% of customers return footwear due to wrong size. On-line shops have substantial financial and image losses. The new contactless fitting service is manna from heaven for on-line vendors of footwear which will allow them to spike the efficiency of their business. Mass adoption of this on-line footwear sales technology will inevitably lead to a redivision of the world market of footwear. However, the appearance of on-line fitting in the Russian market was coolly received. Major Russian on-line retailers have been very cautious in their response to this innovation. And even now they prefer to wait when someone else, not them, will start to master this digital sales model. We should mention that the Russian market according to their functional and structural parameters is close to the global average, so these trends can be generalized.

On-line and off-line trade fusion in retail.

We believe that CEOs can no longer afford to wait in the digital conversion, otherwise their business will start to lose efficiency or, even worse, will begin to stagnate. Such scenario can be seen in the off-line retail. Right after the New Year sales Macy’s – Shop Fashion Clothing & Accessories  announced that closing 68 stores will allow them to cut more than 10000 jobs.A day after Sears Holdings Corporation announced a dismantling of 150 loss-making shops. And retailer The Limited has officially shut down all 250 stores across the country, continuing its activities in an on-line environment. Please refer to: Jason Ankeny «7 trends that will disrupt and define retail in 2017» (

The general trend of closure of off-line stores causes acute attention of owners to the new digital innovations. There is a synthesis of off-line and on-line channels of sales. For example, the connection of physical shopping with mobile technology implemented on Amazon Go (, or implementation of mobile GPS navigation in the off-line stores by Philips (

In an on-line clothing and footwear fitting in American and European markets omnichannel to work with customers gets a wide enough outspread. The technology of self-service on digital displays in Оrckestra stores, digital platform services which are built on Microsoft Azure, is meant to make an example. (

In our view, the main mission of digital transformation is to connect innovative technologies with the mechanisms of an existing business for the sole purpose of meeting the increasing personalized needs of customers. The customer quickly, reliably, spending fewer resources finds the necessary goods, and on the other hand, such innovations in retail structures will allow to build a more loyal client relationships, creating buying clubs of its adherents.

What does the “digitalization” brings to retail?

Nowadays digital leaders can not only grow out of traditional business-models, but they actually are planning to conquer of new market opportunities without any restrictions. That’s because for the first time in many decades technology push is getting ahead of the progress of business process innovations. The technology is no longer a barrier for the development of business, but rather opens new horizons for business. In other words, “digit” removes emerging obstacles and creates competitive advantages for companies using them first.

An illustrative example is development of on-line clothes and footwear fitting businesses in USA and Europe. The digital conversion of clothing and footwear itself did not arise in order to show off it’s innovativeness and its adherents are appearing in print not for witticism. Digital sales of clothing and footwear is an integral structural component in the “fourth industrial revolution”, it is an organic part of the new paradigm of business thinking that is now being formed and can have a huge impact on the field of production and trade, can completely change the way we buy and sell.

Key indicators of progress here are parameters such as a superior personalization of the purchase process, superior personalization and customization of the product, buying process becomes more attractive, less time, money and mental energy is necessary for the acquisition of suitable product.

Let us fix on the example of on-line fitting shoes. Here are the specific KPI parameters, the achievement of which is possible under full implementation of contactless fitting footwear service that is definitely capable to identify the retail business’s commercial attitude to digital technology:

  1. The sharp reduction in returns because of non-fitting size due to the high precision in the guidance of the correct size.
  2. Conversion growth in the use of the service, i.e. implements a higher probability of a transition from viewing to buying.
  3. Increased loyalty to the store after the first purchase using the service.
  4. Activation to purchases of footwear for new buyers of the number of Internet users who previously were reluctant to buy shoes on-line. For example, in Russia there are more than 50 million of Internet users, but only 5% of them buy the shoes on-line just yet. Contactless fitting service can increase these numbers.
  5. Removing geographical limitations for customer’s access the world range of shoes.
  6. Broaden options for employees to personalize their relationship with each customer that allows you to start engaging with customers on a completely different level of satisfaction of mutual interests.
  7. Optimization of operations in footwear sales that consistently improves service levels and reduces costs.
  8. Building a new business model for on-line retailers of shoes with additional and infinite opportunities to profit.

Targeted cultivation of new digital business culture in the retail community.

We have to constantly talk about a crucial importance of the “digitization” of the mind for any successful leader. But the leader needs to be aware of not only the advantages, which new technologies bring, but also of all of the risks and the downsides of the process of formation of something new. Trying, double checking, trying again is the only way in finding and applying innovative solutions. Willingness to business risk is always accompanied by good luck. And today no one can call it off.

Digital business transformation also imposes new demands on managerial community, highlighting the ability of top managers to see emerging of a new and the ability for collective action for its implementation. It is no secret that most companies operate today in a proprietary format. But digital technologies involve the interaction of business actors, since only the shared use of them can lead to a phenomenal growth in the level of efficiency in the market, and even can give the opportunity to “take the house”.

The path to digital transformation in business cannot be only due to the capitalization of digital technology. This path requires a radical restructuring of business leader’s mentality. Digital transformation is connecting creative possibilities of the business with technical inventions, it is a combination of traditional business models and innovative digital technologies. Digital conversion is the main way of the retail market development, the way for the invention of new products and business models.

In conclusion, we would like to recall the words of Alibaba Group captain Daniel Zhang that “… if we could not change fast, then we would be killed by this new technology” (

Request for reposts indicate a link to and the author of the article – Valery Chernik. This is a project for 3D contactless shoe fitting. The name is pronounced as [ɪmɪdʒaɪz], Cyrillic – [Имиджайз].

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