Imagine if supermarket shelves could talk. Grocery shopping would be like buying your cabbages or cheese from the grocers of old or the local farmers at Sunday markets. You would be chatting about the produce’s provenance, making sure you were buying organic — or not — and perhaps getting a wine pairing suggestion or two. There wouldn’t be the tedium of finding a store manager or squinting at the tiny print on jar labels. It would be a thoroughly educational, and quite efficient, shopping experience.

This could be a reality if an experiment by Italy’s largest supermarket cooperative, Coop Italia, takes off. While the shelves there don’t quite speak, they do put out information about the produce, quite literally at the customer’s fingertips.

Showcased at the Milan Expo last year, the concept used movement sensors adapted from gaming devices to track customers’ positions and movements. Pointing or hovering a hand over a certain product brings up on a screen details of ingredient, origin and even carbon footprint — information that today’s consumers would expect producers and retailers to provide. The sensors also record shopper behaviour such as which aisles or products hold the most interest and what is eventually bought, and help the retailers stock up on time.

This transformative grocery shopping experience, dubbed “supermarket of the future”, was the combined effort of management consultant Accenture and Avanade, a business technology consultant and Accenture’s joint venture with Microsoft that uses Microsoft software and technology, such as the Kinect for the sensors.

Indeed, from supermarkets to airlines, industrial conglomerates and real estate agents, which are just some of Avanade’s clients, businesses are endeavouring to embrace all things “digital”. The goal towards so-called digital transformation is expected to bring about radical improvements to a business’ performance. It could be hype, or it could provide real benefits for productivity and growth.

As Avanade’s chief growth officer Ashish Kumar explains, “Technology advances have come of age”, and this is allowing organisations to use technology in a myriad of new and powerful ways to grow their businesses. Yet, for technology to yield meaningful results, there needs to be a fundamental change in its adoption and use.

“It’s about connecting the data from the customer, including information from social media, analysing it and actually learning [from it], looking at where the opportunities are to improve the product and change things,” Kumar says.

“Digital is about IT being applied in much richer ways to improve business and personal lives,” he adds. “It’s not just about putting together a fancy website,

Why transform again?
To be sure, businesses have for some time made use of technology such as enterprise resource planning and customer relationship management software to improve productivity and customer services. Clothing retailers, for example, have had digital technology such as radio-frequency identification tags on every garment, allowing shop staff to track inventory and replenish racks on time.

“But once everybody has established a similar baseline, where is the competitive edge going to come from?” Kumar asks. “It’s going to come from better knowing your customers; better knowing your profitable customers, profitable products; changing the products; putting the right product in the right store and at the right time. You’ll need to master the technology and integrate it to create this next level of differentiation and competitive advantage.”

Clearly, the applications for digital technology are much more widespread than before. “This notion that people and things are addressable and have data, not just systems of record [such as] computers — this is what’s creating this digital wave.”

And, the availability of cloud computing and storage has made it easier and cheaper for businesses to handle the large volumes of data generated by this level of digitisation. This in turn allows them to better collect, analyse and act on data to make better business decisions.

Certain industries have been early adopters of digital applications. Kumar highlights businesses in the fast-moving consumer goods and pharmaceutical sectors for instance, which have been adept at digital marketing and data management.

Yet, there are still sectors that are more wary about using cloud systems and digitising operations. The disruption that banks are facing from the latest wave of fintech start-ups, for instance, has been well-documented and serves as a cautionary tale for other industries.

“There is a chunk of business that is being taken away from the financial services providers because [they have not caught up],” Kumar says. Peer-to-peer lending, payment and brokerage services are just a few aspects of banking that fintech has broken into. “Banks’ ability to provide the same service in an as easy-touse fashion as some of these new entrants is critical for them to avoid disruption and maintain growth.”

First steps
Organisations have to take digitisation beyond superficial, customer-facing functions to be able to fully harness and exploit its value. “You have to be digital on the inside, which means your people need to be able to put all of these tools to use,” Kumar says.

And importantly, in order to attract and retain today’s employees, a digital workplace culture becomes imperative. “Certainly, the millennials and a number of people live a very digital lifestyle. But when they come to work and the tools and culture do not match their values and way of working, then they will not stay in that organisation if they have a choice.”

Despite the extensive discussions and availability of technology for use, however, organisations still have a long way to go. “The digital transformation happens over time,” Kumar says. “Digital is a journey, and most of our clients are at step one today.

“The first step in digital transformation is applying these technology advances to specific business scopes and improving outcomes. Then it is about applying the [lessons], data and insights to create value — both by personalising and tailoring experiences, and by creating new revenue streams from the data and new business models,” he explains.

At GE Aviation, for example, the massive amounts of data transmitted from its aircraft engines in flight worldwide, as well as safety information collected while being serviced, could be packaged into a service. “There’s a lot of value in that, versus just selling the engine [and servicing it],” Kumar says. “Then [only you’d] have a digital business, because the product itself is digital.

“Once you have used the value from digital to fundamentally change your products, that’s when, I would say, the digital transformation is complete.”

This article appeared in the Enterprise of Issue 727 (May 9) of The Edge Singapore.