holiday season shopping goes virtual

Holiday Season Shopping Goes Virtual

Filippo Battaini (Head of IDC Retail Insights, Europe)

This year’s holiday season won’t be the same. There’ll be less travelling and fewer family gatherings, and holiday season shopping will not be immune to all of this. We expect many consumers to shop online due to lockdown measures or simply because they’re wary of visiting potentially crowded physical stores in the run-up to Christmas.

Rise of Digital Commerce

An increase in online shopping during the holiday season is nothing new. UK online sales were 15% of overall retail sales (excluding fuel) in November 2019 versus 10% in November 2015, and 13% in December 2019 versus 8% in December 2015, according to our analysis of Office for National Statistics (ONS) data. This year, we expect the percentage of online shopping in the two months to Christmas to increase even further.

Black Friday to Boost Online Spending

Given the restrictions in place in some countries, including the UK, Black Friday is expected to contribute substantially to the increase in online spending in the run-up to Christmas. This year, Amazon and other retailers are merging Black Friday and Cyber Monday into a 10-day shopping festival culminating on November 30.

This seasonal shopping spree was initially associated with images of long queues outside big-box retailers and rampaging shoppers grabbing discounted items as stores opened. Over time, this stampede has moved online, with websites crashing due to huge spikes in customer traffic.

John Lewis Christmas Comes Early

Retailers have been getting ready for the expected online shopping spree. UK department store operator John Lewis launched its first-ever virtual Christmas Store as early as September in response to an early spike in searches for festive items. The virtual store enables online shoppers to take a 3D tour around the Christmas shop floor of its flagship Oxford Street location and purchase the displayed items.

Source: John Lewis Virtual Christmas Shop (www.johnlewis.com)

How Retailers Can Prepare for the Virtual Holiday Season

The developments that have taken place this year have probably changed shopping behaviour for good. With the 2020 holiday season increasingly going online, more shoppers are likely to follow suit in the future to take advantage of the convenience of shopping online and to avoid crowded stores. According to the IDC Retail Consumer Insights Survey 2020, 73% of US shoppers’ spending takes place online, versus only 38% in pre-pandemic times.

Retailers need to adjust their operations to meet the complexity of today’s shopping journey, with greater integration across venues, whether online or physical. They need to enhance online operations, inventory management and fulfilment capabilities to lay the foundation of a retail architecture that can thrive in this new environment.

Retailers should leverage their brick-and-mortar presence to strengthen their fulfilment capabilities by using their store network to fulfil online orders. Effective integration of online and offline is increasingly important to provide a customer experience that responds to the greater complexity of today’s shopping journey.

 

During our IDC European Retail Executive Digital Forum 2020, we discussed about the importance of supply chain, fulfilment and the new role of the store with retailers. You can find more on how retailers are preparing for the next normal in How European Retail Can Win the Next Normal: Foundation Capabilities and Enabling Technologies, and if you want to know more/talk about these topics you are welcome to reach out to Filippo Battaini.


IDC diversity and inclusion in the it workforce

Embracing Diversity and Inclusion in the IT Workforce

Marianne Kolding (VP, European Skills Practice)
Margaret Adam (Associate Vice President)

For more than two decades, the IT sector has been struggling to solve the conundrum of attracting more females into the IT profession — partly to create a more balanced and diverse workforce, but primarily as a lever to address the scarcity of IT people.

IDC first wrote about the issue in 2001, and we have since seen a variety of initiatives aimed at increasing female participation in the IT workforce. These have spanned from how to get females more interested in science, technology, engineering and math (STEM) studies, which may then lead to an interest in IT, to how to get women returning to the workforce after maternity leave to consider a career in technology. So far, no one seems to have found the silver bullet.

The State of Diversity: Women in UK Tech

IDC estimates that there were 1.7 million technology roles in the UK in 2020. According to the Office for National Statistics and a report by the UK Chartered Institute for IT, however, only 16%–17% of these are held by women. Despite efforts to turn the tide, female participation in the IT profession has stubbornly been sitting around that level for several years.

Bridging the COVID-19 Tech Skills Gap

COVID-19 has impacted employment, and in the tech workforce we will continue to see a lack of critical IT skills over the next few years. If anything, the pandemic has brought into focus organisations’ dependency on technology and how technology is critical to create an agile and resilient organisation, as well as accelerated digital business transformation.

As new technologies are adopted and legacy technologies are retired, the IT skill mix is changing. Of course, there will still be a need for heavy-duty specialist tech skills, but we’re also seeing greater demand for people with solid business skills that can be reskilled to take on technology roles.

Many organisations are taking the reskilling route because of the pandemic: rather than making a lot of people redundant, they’re assessing who can be retrained to take on the critical digital and tech roles needed. Others are recruiting from outside the tech industry — hiring from digital marketing, IT recruitment and academia, for example.

Is COVID-19 Closing the Technology Skills Gap?

For those unfortunate to have been furloughed or made redundant, IT may also be an alternative new career. According to research from CWJobs (published in November 2020 and based on a survey of more than 2,000 professionals in the UK), 56% of non-tech workers were planning to change careers and around half of these were considering a tech-based role.

The research doesn’t say anything about how these numbers play out from a gender perspective, but this bodes well for more diverse recruitment. A key element of this is for tech companies to talk about the breadth of roles available in the tech industry, as much as the emphasis on attracting young female talent to STEM.

More needs to be done to break down the misconception that a successful career in technology means being an engineer or developer. Of course, those roles are critical, but the technology industry also offers a real diversity of roles and plenty of opportunities for creative and business-orientated careers.

One can only assume that with the broadening aspects of tech roles requiring more business-related and soft skills, women will find a tech career more attractive. For those with children, the new reality of much more remote and flexible working environments will also be attractive. It also extends the potential talent pool outside of commutable distance to a physical office.

Having said that, we think role models are also an important element in demonstrating to women (of all ages) how exciting a career in the tech industry can be. It’s often easier to recruit females when there is a female leader in the organisation. They can motivate, lead, guide and coach, and show female employees a career path.

Our Testimonial

We have both spent well over 20 years in the technology sector, in different roles, and in different types of tech companies. It’s true that it’s still a male-dominated industry — but it is slowly changing.

To drive change even faster, it’s important that women that do have successful careers in tech speak out about how exciting it is (at least most of the time, as in other professions) and provide support and mentoring to other women just starting out. But it’s also important that organisations put in place programmes to attract women into tech — and, importantly, also focus on retaining them once there.

Diversity and Inclusion at IDC UK

Here at IDC UK, we’re proud to say that 42% of our workforce are female — and that women are represented at senior as well as junior levels. Yes, our jobs may not be your traditional “tech jobs”, but we have an important voice in the industry. When we make keynote presentations to hundreds of people on technology subjects, we play a role in changing the perception of women in tech — we have an impact.

We’re also proud that IDC UK has become a signatory of the Tech Talent Charter to work with other like-minded organisations to drive diversity and inclusion into the workforce. While a lot of attention has been on gender balance in tech, we have much to do to increase diversity in other ways as well: ethnicity, orientation, neural diversity and disability. We all have great ideas of what can and should be done to achieve this — and it will happen faster if we work together.


Winning Retail's Next Normal: Key Insights from the IDC European Retail Executive Digital Forum 2020

Filippo Battaini (Head of IDC Retail Insights, Europe)

It was great to host a wonderful line-up of speakers at our IDC European Retail Executive Digital Forum 2020 this October. During the event, we discussed the future of customer experience, fulfilment and inventory management and the new role of the physical store.

Retail’s New Phase

Retail is in a new phase as we are seeing a substantial change in the way consumers shop. This situation offers great opportunities for retailers. Changes in consumer behaviour require a focus on customer experience and the adoption of a commerce everywhere business model.

Long Live the Store

In retail’s next normal, the bricks-and-mortar store will become an integral part of the distribution network. As Ilse Roeffen, senior vice president for commercial management at Swarovski, pointed out: “Inventory management is key to enable seamless customer experience”.

On top of its new key role in distribution, the bricks-and-mortar store will also become an experiential retail destination for shoppers, helped by the adoption of technology-enabled capabilities. For example, Swarovski launched a new store concept that uses wall displays to increase customer engagement, while SPAR adopted self-checkouts to speed up purchases, digital signage that provides product information, and mobile apps that help engage customers through digital leaflets, coupons, and promotions to increase customer engagement.

The physical shopping experience remains important. As Werner Kraus, CTO and technology and architecture lead at SPAR Business Services, put it: “The store is not dead. In fact, the bricks-and-mortar store is a key component of the commerce everywhere business model”.

Embracing the Next Normal

Retailers need to gradually implement technology-enabled capabilities, scale up customer experience, and implement innovation strategies. Inventory management and the evolving role of physical stores in fulfilment and customer engagement becomes key to support seamless customer experience and implement the commerce everywhere business model.

 

You can read more at How to Win Retail’s Next Normal: Highlights from the IDC European Retail Executive Digital Forum 2020, and, if you missed the event, you can watch the replay.

We are always happy to talk with you about the future of Retail! Please feel free to reach out to me at fbattaini@idc.com., or head over to https://uk.idc.com and drop your details in the form on the top right.


ERP in business ecosystems

What is the Future Role of ERP in Digital Business Ecosystems?

Stefanie Naujoks (Research Director, Manufacturing Insights Europe)

While ERP (Enterprise Resource Planning) applications typically enable manufacturers to plan internal resources efficiently, the role of ERP in future business ecosystems will have to accommodate some additional requirements.

IDC Manufacturing Insights sees a shift from internal process optimization to the digital transformation of business-to-business (B2B) processes in the broader manufacturing ecosystem.

Source: IDC, 2020

In a recently published report, we described the future role of ERP applications in digital business ecosystems, the drivers for the need to transform ERP applications toward ecosystem-enabling ERP applications, and an overview of key capabilities that are relevant for ecosystem-enabling ERP applications.

Key Takeaways From the Report

ERP solutions will play a key role in supporting ecosystem-related B2B operations, but will have to accommodate some additional requirements. What will be the key capabilities, how can ERP improve B2B operations, and what will drive the need to transform into ecosystem-enabling ERP applications?

  • Cloud-based applications, open APIs, microservices architecture, advanced analytics, and artificial intelligence (AI) will be key capabilities of ecosystem-enabling ERP applications.
  • Drivers for ecosystem-enabling ERP applications are increasing demand for more integrated ecosystem collaboration such as utilizing industry-specific B2B marketplaces, better integration with customers, and closer customer engagements. Drivers will also relate to the rise of digital commerce and new ecosystem-facing business models that necessitate appropriate ERP capabilities.

 

If you are a tech buyer, you should take this into consideration:

  • Tech buyers should focus on ERP vendors that can augment B2B processes and innovation across the digital business ecosystem with technologies that help to improve the efficiency of B2B operations and automate B2B workflows. Such technologies might be related to utilizing APIs and technologies such as artificial intelligence (AI) and machine learning (ML) capabilities.
  • Industry domain know-how is key. Work with ERP vendors that understand your specific domain and ecosystem challenges.
  • Start to establish an architecture that utilizes cloud-based platforms and APIs to integrate ecosystem stakeholders. If there are existing platforms in place, integrate them into one data platform to establish a holistic ecosystem view.
  • Increased ecosystem collaboration in your business strategy necessitates that your long-term vision should include an ecosystem model (digital twin) based on real-time data from all enterprise systems (e.g., ERP, CRM, MES) and other applications (e.g., solutions for payment transactions, marketplace). This will be key to testing new business models, managing ecosystem stakeholders, and predicting ecosystem behaviour. For complex systems and business behavior predictions, utilize AI/ML tools. While this is a more complex endeavor, it will play a major role in the future of ecosystem collaborations.

 

The full report — Ecosystem-Enabling ERP: The Future Role of ERP in Digital Business Ecosystems — is available for all clients of our Worldwide Manufacturing Business Ecosystem Strategies research program.

If you want to share your thoughts around this, please feel free to contact Stefanie Naujoks, or head over to https://uk.idc.com and drop your details in the form on the top right.