Top 5 Digital Transformation Trends in Retail Industry to Watch Out in 2020

6 minutes read
on 22 January, 2020

The retail industry is today, one of the most vibrant industries pushing for innovation backed with considerable investment in e-commerce, mobile and supply chain technologies. Digital transformation trends in retail are going beyond a single technology, entailing a complete overhaul of the retail ecosystem – from staff and technologies to processes and suppliers.

While the challenges are many, digital transformation in retail promises to be an exciting journey worth taking as the trends show.

5 Technology Innovations Shaping Digital Transformation in Retail

Augmented and Virtual Realities

Augmented reality(AR) refers to computer generated imagery that can be manipulated by the user. As a result of this digital transformation concept, customers can design how their kitchens or living rooms  and even include virtual appliances and fixtures using a touchscreen.

A report from Gartner states that about a 100 million customers are set to engage in shopping experiences involving AR. Though AR has been around for a while it is now gaining maturity with several retailers embracing the trend. Quite a few clothing brands such as Uniqlo, Lacoste and American Apparel have opened virtual showrooms and fitting rooms to allow customers to try on their outfits in virtual spaces. Retailers who deal with bulkier goods such as furniture allow customers to get a visual representation of how an item would look in their homes. Brands like IKEA and Anthropologie now thrive on AR to maintain brand loyalty. As per the study conducted by Retail Perceptions, 71% of the respondents would be more interested in shopping with a retailer that provides AR based try-before-you buy options.

Virtual Reality(VR) creates a simulated environment that makes it different from AR. Instead of viewing a screen in front of them, users are immersed in the scene and interact with 3D worlds. VR is finally coming out of the gaming world and is being used to create virtual reality tours for customers. Making this the medium of their digital transformation are retailers like Alibaba, Ikea, Tesco, Cisco and Adidas. They have created some form of VR tours that take you through store aisles, provide 360 degree product views and gives details like processing and purchase options.

Product Customization 

Digital transformation in retail is helping companies make their customers feel special by way of customization. Product customization combines different forms of on-demand manufacturing technology to meet the need for personalized shopping experiences of customers. Retailers such as Eloquii and Adidas have long since been experimenting with on demand 3D printed apparel. Companies such as On Point Manufacturing have now enabled the production process wherein shoppers can obtain apparels fit and size combinations not commonly found in stores. Their factory at Alabama does exactly this-manufacturing apparel based on unique size patterns. Levi’s offers its customers the option of personalized embroidery on their jeans and denim jackets while NikeId lets shoppers to completely personalize their sneakers for an unique experience. Other brands such as Lot Stock & Barrel and Atelier and Repairs, both clothing retailers are also  thriving on the customization approach.

Apart from clothing brands, there are other retail brands too who have chosen product customization as their digital transformation strategy.  Nutella, a well-known brand for chocolate spread has added customization to their marketing strategy where the customer can add their name to the jar. Nissan, a popular automobile brand has introduced the option for buyers to select engine model, interior and exterior vehicle color, and so on

QR Code

Improving retail customer experience while changing the system overall is the prime focus of digital transformation and the QR code is yet another enabler.

The Quick Response or QR code as it is popularly referred to is a 2 dimensional square shaped barcode that can be scanned to retrieve information by a cell phone. As compared to a standard barcode, they can store much more data, URL links, geo coordinates and texts. 60% retail shoppers make it a point to scan the QR codes to access more product information today.

Walmart’s new mobile app features allows customers to scan QR codes while shopping and skip lines by paying with the app anytime. Amazon another ecommerce giant has now moved from the brick and mortar space to a seamless shopping experience with the help of these QR codes. The QR codes for wine bottles are incorporating wine’s origins and even suggest food pairings through QR codes.

Clothing retailers too have joined the fray by providing information about their Company, alternate sizes and colors options and manufacturing information. Zara is a leading example.

QR codes are improving not just retail goods but experiences and services too thus bringing digital transformation to other aspects.

Digital Labels 

A digital price tag is a simple piece of technology that has almost single handedly transformed the retail logistics space in many ways. The physical labor involved in attaching price tags to individual items and maintaining a list of the stock left is a herculean task. With the emergence of the digital price tags the physical strain on retail teams has come down significantly. The digital shelf labels provide an in-stock status which helps the sales staff steer customers in the right direction or give further advice based on the need.

Leading departmental store, Noordwijk, employs digital labels through the men’s and ladies fashion sections in order to drive sales and enhance profits. The labels give information about the price, any offers/discounts at the current time, happy hour, flash sales and stock position.

Amazon and Best Buy have centered themselves around the utilization of  digital labels. The goal here in both cases is to borrow the online experience and create the ultimate shopping experience in-store.

US grocery chain Kroger, has introduced digital labels across several of their stores thereby making it convenient to digitally display price and nutritional information instantly and remotely.

Voice Based and Visual Search 

Voice based search has taken off in recent years, especially as a function on app-enabled smart phones. The in-voice activated systems have gained momentum by companies like Amazon and Google, leaders of digital transformation with their Alexa and Google Home products. Sonos and Apple are driving innovation in this field too. Retailers such as Dunkin Donuts, 1-800 Flowers, Dominos and Starbucks have created Skills for Amazon’s Alexa that let consumers order items on Echo and other Amazon based devices. Voice based technology has received an impetus since consumers can shop while doing household chores, driving or on the go too.

Visual search on the other hand is a retail trend that allows shoppers to find and buy a product just by snapping a photo of the product. Google, Target, IKEA, Tommy Hilfiger, Forever 21, Property Guru and ASOS are some of the companies that use visual search technology.

With a customer first approach, digital transformation in retail has risen the shopping experience of customers in unfathomable ways. The motivational factors for customers remain the same, goods at a reasonable price, available as soon as possible and for many even delivery to their doorstep. Digital transformation solutions in retail are constantly improving all these factors to make shopping a more appealing experience than ever before. The lines between digital and physical retail experience will soon be history thanks to digital transformation happening across the retail industry.