How Digital Transformation Actually Means for Retail
Digital transformation can mean many things. In the retail industry, it can mean disruption, new service offerings and improved functioning of existing systems- all using technology. The retail customer is evolving and so is his or her shopping journey. 83% customers want their shopping experience to be personalized. Which means the retailer cannot be far behind and has to evolve and transform as well.
Thanks to early adopters, digital transformation in the retail industry has seen several game-changing innovations that have redefined the entire customer experience.
So, while the broad implications of transforming digitally are self-evident, let’s take a closer look at what digital transformation actually means for the retail industry.
How is Digital Transformation Affecting the Retail Industry?
From self-checkout kiosks, voice-search for products, and customized offerings to unique experiences and finding just what you need — even before you need it, digital transformation is affecting several aspects of the retail industry simultaneously.
It is re-looking and changing every department and piece of work. The supply chain manager, inventory teams and the employees at the cash counters can all be enabled to perform better.
Here’s how digital transformation is transforming the retail industry.
- Making Omnichannel Retail a Reality
Omnichannel retail means providing a unified experience to your customers across channels. It involves meeting your customers wherever they are without missing any touch-points. Brick-mortar stores, mobile shopping, social media, market places to every time customers go online, the channels are plenty and digital transformation is helping organizations achieve this Omnichannel presence through careful planning and use of technologies.
The advantages of providing the Omnichannel experience to customers is undisputed. It is the only way for traditional retailers to remain relevant and maintain their edge over the likes of Amazon that are threatening their very existence.
Having customer data that is well organized and insightful, teams that are well integrated and work together and most importantly the ability of recognizing a customer across channels are important to ensure the success of an organization’s Omnichannel strategy.
- Altering Shopping Habits
A customer first approach where you listen to what your customer desires- and provide them with it, is a good way to embark on the digital transformation journey. However, as you mature in the journey and after you have provided your customer with services they want - be it customization, seamless online experience and faster processes - the stage is set for re-invention.
With digital transformation - data transformation more specifically, you can influence their shopping behavior, find out what is driving their buying decisions and also what stops them from buying something. So long as you get the right insights, altering the shopping habits is only a matter of putting those insights to use with the help of technology. The opportunities are as varied as the challenges!
- Uncovering New Business Models in Retail
Digital transformation in retail is not limited to improving the present. It is a path for the future where new solutions to old problems and new business models can reveal themselves.
New business models that have emerged in recent years are:
Peer to peer sales or Sharing services/products
Partnerships & referrals
Caring for the environment
Business to home (B2H) or home integration
- Re-inventing Physical Retail Stores
A lot is being speculated about the future of physical stores thanks to the wave of digital transformation. While some think it is the end of the road for brick and mortar stores, the reality is not so simple. It’s true that more and more shopping is now happening online, but even today 90% of the shopping happens in physical stores. Having digital touchpoint is crucial, but transforming the physical stores into smart, high-tech outlets is the way ahead. The future of retail is a mix of both online and offline channels - integrated seamlessly.
Smart fitting rooms, self-checkouts, smart carts, RFID enabled tags, well designed aisles, optimal product placements are all ways in which physical stores can stay in the game. Those retailers who have a better online presence can opt to transform their physical stores into smart warehouses. Either way the physical space will undergo re-structuring but will not really be done away with. What’s more, even the purely internet players like Amazon are now opening physical stores to create the omnichannel experience which is becoming essential for retailers to remain competitive.
- Getting Ready for The Future- AI, VR, AR and Everything in Between
If there is one thing digital transformation stands for, it is technology - of the future. Retailers who have the vision to transform their businesses using new technologies will have the ability to respond to changing market trends. The future will be defined and ruled by technology - cloud infrastructure, big data, AI, VR, AR. With the help of these, organizations can:
Respond to customers 24/7 using chatbots
Offer personalized product suggestions
Remember customer preferences
Have an up to date inventory
Predict consumer needs
A right mix of technology supported by a well thought out strategy will help retail organizations to stay competitive and relevant in future.
- Shielding from Recession
How the economy performs, affects every industry. A recession can affect even the top players. There can be several reasons for an economic slowdown. The effect of coronavirus on several industries is already starting to show and only time will tell the long-term impact of this fast spreading infection. For such times, an efficient system that is agile enough to respond to a break in supply chain, shortage of important supplies or a general drop in buying patterns can help tide over a slowdown and other market conditions. Where processes and systems are robust enough, an organization is able to bounce back once the conditions improve.
How Digital Transformation Actually Means for Retail
Undertaking digital transformation in retail is akin to solving a jigsaw puzzle. Every department and aspect of retail needs to be put under the scanner to assess how it’s functioning can be improved.
Inventory management, supply chain, customer experience, product design or store design, find a partner who can guide you through these aspects of retail and provide tested solutions. Ultimately, improving operational efficiency, reducing the time to market products and increasing the number of happy and loyal customers should be the final goal of undertaking any transformational journey.