As a result, the report, “Digital Vortex: How Digital Disruption is Redefining Retail,” stated some leading retailers could become laggards or even disappear altogether in the next three to five years.
“Most of the leaders we spoke to predicted that four of the top 10 retailers would no longer be around within as little as three years or at least displaced from the top 10,” said Shaun Kirby, CTO of Cisco. “We’ve found that retail is one of the top three industries most vulnerable to digital disruption, after technology products and services and media and entertainment.”
According to the report, 47% of retail executives said they believe that digital disruption “somewhat” or “significantly” increases their risk of going out of business. Clearly, retail leadership needs an attitude change to survive, Kirby said. Despite the high stakes involved, 30% of retail executives said they are taking a wait-and-see approach in hopes of emulating successful competitors. Only 24% said they have a plan and are willing to disrupt themselves in order to compete.
Digitally enabled startups could be the biggest source of competition for retailers, the report demonstrated. So how can retailers survive?
“There are essentially three steps that we’re recommending. First, understand where you are today on your digital journey,” Kirby told CMO.com. “The second step then is to identify the use cases that provide the most value to your business ... and then the last step is to identify the gaps in the capabilities you have today. We see an impending disruption here, which is a threat for those who are not going to be early adopters, but also a huge opportunity for those who do adopt early.”