If you are like many retailers, you may secretly think you’re doing it wrong. You may think that other companies are more digitally transformed than you are – more automated, use Big Data in a more sophisticated way, better at real-time targeting, further along in breaking down digital silos, more omni-channel…

That’s because most of the case studies out there demonstrating digital strategies are showcasing the few companies who are doing it best.  Using that yardstick, it’s easy to feel like you are coming up short.  In fact, many if not most, retailers are in the very early stages of digital transformation, trying to figure out which digital initiatives to invest in, and which, among the many directions they could take, will deliver the biggest payback.

To help understand the best place to start, you must first determine where your organization is on the digital transformation continuum.  Because you can’t know how to grow unless you know where you are today. So it means looking in the mirror and being honest about your own level of maturity.  It can be sobering, but it will be beneficial.

Here’s a process to help assess where you are in the digital maturity continuum.

The first level of digital maturity, Level 1, is where the enterprise uses data to run the business, period. Data is spread across various silos:

  • the marketing department has demographic data
  • the sales department has prior sales data
  • the customer support department has call data, and
  • no one has the big picture.

The Level 1 retailer’s marketing efforts will only be so effective, because promotions and advertising fail to account for other pertinent data like prior sales or product experiences.

You’re a Level 1 retailer if:

  • Your marketing efforts aren’t personalized
  • You don’t know what your customers’ multi-channel experience is
  • Your data lives in silos
  • Your people, processes, and governance aren’t set up to enable digital transformation
  • You are using only some aspects of social, mobile, analytics, and cloud technologies

So let’s say you’re there, how do you move to the next level?  The answer is, by using data to manage your business.  A Level 2 retailer consolidates the customer data from across all the silos and gains a single, unified view of its customers. This Level 2 retailer can now run campaigns, deliver promotions, and target offers to align with each customer’s preferences. This will result in higher response and close rates for the retailer’s marketing efforts.

The next level up, Level 3 retailers, use data to drive innovation. In addition to using data to market better, they use data to build better products that more closely meet customer preferences. They deliver the right products through the right channels, at the right time, and at the right price, and achieve even higher revenues and close rates.

For example, it’s good to know Mike Jones likes cars. It’s great to know Mike Jones likes small cars. It’s potentially profitable to know Mike Jones likes small, red, eco-friendly cars, which he learns about through three specific websites, that he has visited four dealerships, and he’s opened up a home line of credit in the past 30 days.

Level 4 is the ultimate level of maturity. Level 4 retailers clearly view and use data as a competitive differentiator. For example, the Level 4 retailer exploits brick and mortar stores to provide unique digital experiences. Using technology like Bluetooth and beacons, a Level 4 retailer has the ability to assess customers’ shopping interests as they walk through the store. The impact of this is that the retailer can now make a real-time compelling offer to close the sale.

Digital maturity offers significant rewards. The questions to ask yourself are, “How mature is your organization?” and  “What are the next steps you can take to move up the maturity ladder?”

Published in collaboration with Tata Consultancy Services

Author: Kathleen Holm is Marketing Director of the TCS Digital Software & Solutions Group.

Image: Facebook employees work in the design studio at the company’s headquarters in Menlo Park, California.