What does Digital transformation mean for the Retail Vertical?
It has been a difficult few months for organizations in the retail industry in various nations as the COVID-19 outbreak affected client volumes. Due to the epidemic, retail businesses have had to adjust their business practices and digitally transform. Retailers are grappling with the issue of how to react to the sudden shift. They must figure out how to set up a new business model and generate more income through technology.
Customer control is absolute, and they will only be compelled to shop with you if you deliver a personalized, one-of-a-kind experience. The problem with most retailers is that they are sluggish to adopt new technologies that enable them to change - they have to evolve with their customers, not against them. Retailers could be deterred from offering them if they don't, as they may be perceived as unlikeable or boring.
The term "digital transformation" in the retail industry refers to technological advancements, new services, and improvements in system functionality.
A substantial role is played by digitalization. Corporate strategy is expanded, the culture is changed, and customer experience is improved.
Customers' journeys are changing, and retailers must adapt accordingly. Retailers must move away from focusing on a single technology and towards personalized buying in order to establish new and innovative business models.
What does it mean?
The retail industry must go beyond minor improvements to develop a connected relationship through technology. It is all about improving the customer experience, lowering costs, and increasing the efficiency of transactions, in addition to agility, innovation, data intelligence, and new value propositions.
It is now more important than ever for retailers to evaluate every aspect of their businesses. Innovative business models across all areas of retail must be developed to boost sales, including sourcing, pricing, inventory planning, employee training, and customer experience.
To increase consumer satisfaction, organizations adopt digital technologies to improve their services and facilities. In evaluating digital transformation options, retailers evaluate how emerging technologies might be used to boost revenue and create novel business models.
With the advent of new digital tools and technology, the company will have a greater understanding of its workflow as well as its offerings.
Providing customers with the products and services they desire can improve customer retention and satisfaction through digital transformation in retail.
Why Digital Transformation is Important in the Retail Industry
These are the reasons,
The surge in online shopping
The use of smartphones has grown across all aspects of human life, not only for communication purposes but for a plethora of other purposes as well. Mobile phones allow them to make purchases as well as access other services they require. Digital wallets make it easy for them to buy things online.
Retailers must leverage this element by bringing their businesses online to expand their market. Invest in data, build your presence and refine your customer demand models as ways for businesses to use digital channels. Furthermore, executives can correlate outbreak models with supply chain requirements, allowing employees to work remotely while staying productive.
Supply Chain & Fulfilment transparency
Many retailers were unable to meet the demand for their products because of the pandemic, which disrupted supply chains around the globe. The consequence is that retailers will have to be more transparent about their inventories and set up their online and offline customer experiences more carefully.
The execution of order fulfilment enables excellence across the retailer's physical and online assets through real-time inventory analysis and reconfiguration of personnel, processes, and inventory. This results in inventory optimization, unified commerce experiences, and increased customer satisfaction, all of which contribute to profitability.
Consumers have become increasingly receptive to unified commerce experiences thanks to a substantial increase in e-commerce. Several retailers have already renovated physical facilities to reduce their footprints while improving on-site fulfilment and curbside services. As a result, customers will be able to receive their orders faster after the pandemic and do more internet shopping.
Customer Experience & Engagement
A happy customer base is vital to growing a retail business' profits, and everything the industry does is focused on ensuring customer engagement. Providing products, services, and experiences that reflect the beliefs of the customer is what customers expect from retailers.
Effective collaboration across departments and channels is important to meeting value-based demands, along with the establishment and maintenance of strong partnerships with external stakeholders. To ensure they are meeting the evolving expectations of their customers, retailers need to maintain ongoing awareness and adapt their sourcing and governance rules accordingly.
With technological advancements such as mobile computing and data analytics, retailers can now engage with their customers and understand them better than ever before.
When you implement CRM, the data it generates enables you to make more strategic, focused marketing and business decisions that will improve customer satisfaction and profitability.
Employees and Operations
Enhancing operations ensure rapid, data-driven decisions, streamlined workflows, and better operational visibility across channels. In the era of e-commerce, businesses have to operate across multiple channels. Integration is crucial. You can only provide your customers with a seamless omnichannel experience if your operation is consistent, and that comes from your employees.
Retail store associates are key competitive differentiators since they provide a great customer experience. For this reason, retailers must invest heavily in frontline workers.
Empowering your employees is all about giving them the necessary knowledge, skills, and resources so that they can successfully carry out their jobs.
Through a single, intuitive management interface, employees can access information about their customers, including demographics and behaviours, which they can use for upselling, making informed recommendations, and more.
Providing exceptional customer service, reducing costs, and fulfilling work obligations with flexibility have now become more important than ever. Investments in digital workplaces in retail, particularly those operating in physical locations, have been found to improve sales and profitability, providing a significant competitive advantage over time.
Tools for Digital Transformation
Predictive & Analytics
Since the retail sector is becoming increasingly competitive by the day, nothing is more important than optimizing corporate operations to meet client expectations. From tracking new products to projecting sales and forecasting future demand, data analytics are now used at every level of the retail industry.
Better understanding and analyzing the behaviour of customers, machine learning is essential to establishing a relationship between Retailers and their Customers.
With machine learning, retailers can understand the buying patterns and behaviours of their consumers, adjust promotions and special offers, alter product recommendations, adjust prices on the fly, and anticipate sales based on past trends and consumer preferences.
Data analytics can be utilized to optimize offer and product placement using the heat-mapping of customers. Analytics allows companies to quickly and effectively identify customers who are interested in specific products based on previous purchases, resulting in Hyper-personalization.
Customers want relevant, personalized, and tailored offerings that meet their specific needs. They're always teasing us about the kinds of goods they like and how much they're willing to pay for them. Through focused marketing efforts, it helps businesses determine the best way to approach these customers.
Artificial Intelligence (AI) & RPA
Retail companies are using Artificial Intelligence in innovative ways, from building to interacting with customers post-sale. Bringing these technologies together can solve a lot of problems that retailers face. Artificial intelligence and RPA solutions have been developed primarily to reduce the amount of human error and maximize business efficiency.
The solution lies in a well-balanced mix of RPA and AI. As intelligent bots with machine learning skills and mental abilities have been introduced, RPA has begun to resemble humans in certain ways.
Data-driven retail experiences and rising customer expectations are driving the dynamic retail industry of today. At scale, it is difficult for retailers to provide a useful and personalized shopping experience.
Here are a few examples
Should be available 24 hours per day, every day of the week, and as convenient and easy as possible. Artificial intelligence (AI) is a vital new technique to provide the 24/7 customer service customers expect and facilitating online buying to pushing products based on user behaviour and purchasing history
Artificial intelligence improves demand forecasts in retail. By mining insights from the marketplace, customer, and competitor data, artificial intelligence-based business intelligence systems identify industry trends and make proactive changes to a company's marketing, merchandising, and business strategies. The ramifications for supply chain, price, and promotion planning are significant.
Personalization & Customer Insights
Intelligent retail environments can recognize customers, change in-store product displays, pricing, and services to reflect customer profiles, loyalty accounts, and unlocked rewards and promotions, resulting in a personalized shopping experience for each customer, at scale. In addition to using artificial intelligence (AI) and complex algorithms, stores are using demographic data, social media activity, and purchase history to determine what a given customer will be interested in. This information can be used to improve the shopping experience and provide more customized service, both online and in stores.
Is a new type of e-commerce that enables companies and customers to communicate with AI assistants and interactive representatives to learn about products, make purchases, and receive customer service. As a bonus, it provides brands with the opportunity to deliver individualized advice to customers in real-time, delighting them and making them feel more connected to the brand. Businesses can customize and improve each component of interactions for the best result, allowing them to sell more.
Customers enjoy their experience, even more, when they select the right products regardless of the channel they use to connect because they select the right products.
Currently, retail businesses are undergoing a rapid shift due to the Internet of Things. Sales can be increased, loyalty can be improved, shopping experiences can be personalized, and inventory management can be improved.
Some of the use case
In retail, most of the time and energy is spent on tracking items to ensure they aren't out of stock and in the right place. IoT could be used to automate both of these processes while also detecting robberies with the idea of smart shelves. Intelligent shelves have RFID tags, weight sensors, and readers installed to scan products on both shelves. Smart shelves can detect when there are not enough items on shelves or when things are not arranged properly on shelves.
Electronic Shelf Labels
In retail, most of the time and energy is spent on tracking items to ensure they aren't out of stock and in the right place A flexible, scalable shelf-labelling solution offers merchants a flexible, cost-effective way to be competitive in today's market while also enhancing the in-store experience for customers.
Dynamic pricing and product information can be displayed at the shelf edge using electronic shelf labels, thereby eliminating retailer challenges such as price compliance, automatic price changes, and eliminating paper labels and associated costs.
Automated Checkouts: Your customers probably complain about the long lines they have to wait in. Utilizing the Internet of Things, it may be possible to build a system for scanning tags on items as consumers leave the store. If IoT-enabled checkout is available, items would be automatically tallied up and money would be removed from customers' digital wallets. The IoT devices you use will make your customers happier, and they will return to your store again and again.
Personalized and engaging shopping experiences can be provided by digital signage. In-store digital screens and digital-out-of-home apps can help retailers impress customers and increase sales. The use of digital signage solutions allows marketers to cut costs associated with traditional print advertising and increase client engagement.
Let’s wrap up
Those retailers who want to remain competitive in the future must adopt digital tools as soon as possible. Retailers who can meet the needs of consumers today will be able to attract (and keep) their attention.
For retail organizations that want to remain competitive, digital transformation is more important than ever. Consumers increasingly prefer online shopping and other online purchase options. By incorporating technology into your business, you can boost sales, reduce costs, and improve efficiency.
Planning to digitize your retail business? Don't know how to get started? Saving time and money is something we can help you with. We will develop the best digital transformation strategies suited to your retail business based on your needs.
Connect with us so we can assist you in defining your strategy and ensure your transition is seamless.