Why the Digital Skills Indicator (DSI) Determines the Success of Digitalisation in Retail and why Digital Skills are gaining importance.
Some readers may remember my article from last November on cognitive impairments. Today, I would like to build on this and show the role that digital skills in retail play in successful digital transformation.
Independent of the question of traditional disabilities, three further fundamental questions arise:
- What proportion of citizens in European countries have sufficient digital skills?
- How can “digital skills” be measured and compared in a meaningful way?
- What do digital skills mean for the retail sector – and for its customers?
Digital skills in Europe: only 60% meet the minimum requirements
A look at the latest European DSI figures from 2025 paints a sobering picture:
On average, only around 60% of the EU population aged 16 to 74 possess at least basic digital skills.
At the same time, the EU has set itself an ambitious target under the Digital Decade initiative:
By 2030, at least 80% of the population should have basic digital skills.
At present, we are still a long way from achieving this goal. Particularly striking are the large differences between individual countries. While nations such as the Netherlands, Ireland, Denmark, Finland or Norway are close to – or even above – the 80% mark, Germany remains below the EU average. Given Germany’s self-image as a leading industrial nation, this is at least a cause for reflection.
What are digital skills? Understanding the Digital Skills Indicator (DSI)
In Europe, digital skills are measured using the Digital Skills Indicator (DSI).
This is a composite indicator based on the European DigComp reference framework, covering activities across five competence areas:
- Information and data literacy
(e.g. searching for, evaluating and managing information) - Communication and collaboration
(e.g. email, digital interaction, use of public online services) - Digital content creation
(e.g. texts, spreadsheets, presentations, editing digital media) - Safety
(e.g. data protection, safeguarding personal data, secure use of digital technologies) - Problem solving
(e.g. adjusting settings, installing software, using digital services)
The DSI does not measure theoretical knowledge. Instead, it uses practical digital activities as a proxy for actual skills.
To be classified as having at least basic digital skills, a person must successfully perform at least one activity in each of the five areas.
The Digital Skills Indicator: methodology, history and relevance
In principle, the Digital Skills Indicator has been in use since 2003.
However, its methodology and definitions have been revised several times and were harmonised across Europe in 2021 (DSI 2.0).
Since then, comparable data has been available every two years, supported by a robust methodology. Today, the DSI is used, among other things, for:
- the EU digital strategy,
- the Digital Economy and Society Index (DESI), and
- monitoring progress in digital transformation.
The good news is that the EU average has increased noticeably in recent years:
- 2021: 53.9%
- 2023: 55.6%
- 2025: 60.4%
We are moving in the right direction – but not fast enough.
Digital transformation without digital skills?
Against the backdrop of ongoing digitalisation, a fundamental question arises:
How can digital transformation succeed if a significant part of the population lacks the necessary minimum digital skills?
This question does not affect only specific industries or age groups.
Every year, millions of people are required to work with digital systems on a daily basis – in offices, retail, industry and the service sector.
Without digital skills, this will be neither efficient nor inclusive.
Importantly, this is not about whether someone can upload videos to TikTok or consume content on YouTube.
The DSI measures the skills required to work productively, safely and confidently in digital organisations and to use digital services effectively.
What does a lack of digital skills mean for retail?
For retailers, the key issue is less why digital skills are lower than expected in certain countries.
A much more important question is this:
How can digital customer journeys be designed so that customers with limited or insufficient digital skills are not excluded?
This is where the link to my earlier article on cognitive impairments becomes clear.
What applies to people with cognitive limitations also applies, in many respects, to people with low digital skills.
From a retail perspective, this leads to clear tasks:
- reducing digital entry barriers and obstacles
- simplifying and clarifying the structure of shopping apps
- creating more intuitive and consistent user interfaces for self-checkout systems
- designing online shop GUIs that are reduced, consistent and easy to understand
Digital customer journeys must be usable, understandable and attractive even without high digital skills.
Conclusion: Digital skills as a prerequisite for successful digitalisation
If the DSI figures are taken seriously, around 40% of the EU population aged 16 to 74 do not possess sufficient basic digital skills.
This is a share that cannot be ignored – especially in the context of an increasingly digitalised retail landscape. Without sufficient digital skills in retail, digital transformation remains fragmented.
Too provocative? Perhaps.
But that is precisely why we should be talking about it. I look forward to the exchange – and to a fact-based, objective discussion.