Digital vs digitisation: learning lessons from retailers

As one of the industries most affected by the digital revolution, there is a lot that other sectors can learn from retailers.

We’ve seen cold, hard evidence of what happens when established companies ignore the opportunities for innovation that come from the commoditisation of technology that is exemplified by the internet, cloud and mobile.

HMV, Blockbuster, Comet, Woolworths – all have become bywords for the impact of rapid digital disruption.

Visa reported recently that £1 in every £4 spent using Visa cards in the UK now comes from online payments. Nobody doubts the need for e-commerce and advanced multichannel strategies any longer. But we’re seeing the lines between digital and physical in retail blurring ever more.

In the past week, Tesco announced an own-brand tablet computer for sale in its stores – offering Tesco digital services such as films and music, as well as the usual apps.

And eBay – a company that can only exist thanks to the web – has signed a very bricks-and-mortar deal with Argos to use its stores as a physical distribution outlet for a new “click and collect” service.

These developments demonstrate the difference between “digital” and “digitisation”.

There are still many companies in all sectors simply digitising their existing ways of doing business – putting established processes and interactions onto a website. That’s not going to get them far in the long run.

Digital is all about asking yourself the question: “How will my business – and my customers – be different in the future, as a result of digital technologies?”

The changes in retail will happen, in similar ways, in every other industry – financial services, manufacturing, government, NHS and so on. The challenges will be the same and the number of failures will be comparable. It’s about a change in mindset as much – if not more – than a change in how you use technology.

Canadian ice hockey player Wayne Gretzky was once asked what made the difference between a good and a great player. He said: “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

Going digital is about understanding where your puck will be.