Innovation, agility, data intelligence, customer centricity, and other factors are all part of the digital transformation of retail, along with process simplification, cost containment, and increased profitability. Technology is used in the digital transformation of retail to give customers linked interaction options.
Retailers must rethink their business strategy to utilize digital technology best if they want to maintain a competitive edge in 2022 and stay up with accelerating innovation.
Trends That Can Drive Your Digital Transformation in Retail
Customers receive exceptional, individualized digital experiences and unique products from omnipresent businesses like Google, Amazon, etc. Retailers also need to offer comparable experiences if they want to survive. As a result, organizations may increase customer retention and happiness by implementing digital transformation in the retail sector.
Trends in retail’s digital transition to be aware of include:
Data Analytics Powered by Machine Learning
To support their operations, organizations produce massive amounts of data. With such vast data repositories, it is crucial to utilize and adequately analyze them to get insightful information. Machine learning may accelerate data processing, enabling merchants to quickly uncover valuable information to boost sales and enhance overall performance.
Retailers may also integrate AI models into their operational systems to make dynamic adjustments to their layout, pricing, logistics, etc.
For instance, Amazon’s recommendation systems are unique compared to other eCommerce merchants. These recommendations from machine learning generate a lot of sales.
Artificial Intelligence (AI)
Today’s customers need 24/7 access to quick, high-quality customer assistance. Retailers may use chatbots with AI to deliver customers rapid, customized communications to meet this need. This is a fantastic strategy to increase sales and cut expenses. Chatbots can also transfer the discussion to human employees if they cannot assist the consumer.
For instance, based on the customer’s involvement, AI-driven chatbots might upsell or cross-sell items. Additionally, they can direct clients to a product that they might find interesting.
Augmented Reality (AR)
Users may add digital features to a live view using a smartphone camera and augmented reality technology. Beyond the gaming industry, this technology has made its way into the retail sector, where it provides customers with a distinctive shopping experience.
For instance, IKEA has used augmented reality to combine its physical and online retail outlets successfully. Customers may virtually arrange a piece of furniture and visualize how it would appear with their existing furniture using the IKEA smartphone app.
Integrated Commerce
Customers make purchases through various channels, including websites, mobile applications, social media, etc. Retailers must always have their brand developed across all these channels to remain lucrative.
Retailers must implement a unified commerce strategy. It is a fully integrated software platform used to manage every system from a single user interface. It used to take a lot of time for retailers to maintain several systems and reconcile data from separate systems used to handle different business components. Integrating data from several sources into a single, unified commerce system is essential for increasing the profitability of the retail industry and the efficiency of its procedures.
Touch-Free Communication
A touchless retail system uses the absolute least amount of human interaction during the whole client purchasing process. Customers are eager to buy at their preferred retail establishments now that storefronts have reopened following the epidemic.
Smart signage, open communication, social distance, and touchless technology are essential components of a positive in-store experience.
Touchless retail transactions includes contactless payment methods, digital catalogs, curbside pickup alternatives, and eCommerce merchants like Amazon and Target.
BOPIS (Buy Online, Pick Up in Store) enhances the shopping experience for customers by preventing unnecessary crowding in stores, avoiding lengthy lines. And providing a hands-free shopping experience by directing customers to the check-out counter to pick up their online purchases.
Automated marketing
Retailers can precisely identify the products that need to be stocked and presented thanks to algorithmic merchandising. Additionally, it enables business managers to comprehend how to market and price various products to increase sales and enhance client happiness.
According to the 2021 Gartner CIO Survey, retailers plan to increase their spending on AI by 35% and on business intelligence by 63%. Merchandising procedures are anticipated to mix with AI-enhanced data technologies in the future. Algorithmic procedures that assist businesses in identifying under-sold goods by seeing trends in customer purchasing are an excellent illustration of this.
IoT
Retailers can enhance the consumer experience, save operating costs, manage inventory, and streamline the supply chain with the help of IoT apps.
For instance, IoT sensors and electronic tags (RFID or NFC chips) can cross-sell items to customers when used in conjunction with smart shelves. These sensors can also make customized suggestions based on past purchases. And last, thanks to unique product tags and monitoring, shops can quickly track lost goods.
How is Customer Experience Being Driven by Digital Transformation?
How is customer service evolving as a result of the digital revolution? What impact do this phenomena have on the general clientele experience? Consumer experiences will be more exciting and tailored as retail undergoes digital change. Additionally, it results in higher customer satisfaction and improved user retention.
According to a McKinsey analysis, customers are growing more connected, disloyal, knowledgeable, and channel agnostic. You surely noticed the “less loyal section,” which indicated that the news for merchants was not all positive. However, digitalization may significantly increase consumer loyalty. They will undoubtedly want to make another purchase from a company if they enjoy a novel, highly engaging experience with it. Therefore, companies must experiment with fresh approaches to captivate people and improve their experience.
What Comes Next for Retail’s Digital Transformation?
The truth is that it now goes beyond digital transformation to include digital acceleration. Retailers must adapt to meet shifting client wants, and expectations as the world become increasingly computerized. To compete with their rivals and prosper, they must adopt the technology of every kind at previously unheard-of rates of speed.
Future trends include increasing levels of personalization and customization, consumer-brand digital interactions, financial investments in digital storefronts rather than physical ones, and data-driven choices. Targeted advertisements and interactions will be required. Digitization is a process, not a finished product. Additionally, retail firms must keep evolving and adapting.