4 Key Factors Driving the Digital Transformation in Retail
This transformation is real. The speed at which retail as an experience is advancing is faster than what most analysts predicted a couple of years ago. Somewhere between carrying a scribbled grocery list to a store and the e-stores showing us what should be added to our carts, we grew up. Today, both customers and retailers probably have more if not equal expectations from each other than from the products they buy and sell. And why not when digital transformation has taken retail to the next level.
Executives say the top benefits of digital transformation are improved operational efficiency (40%), faster time to market (36%), and the ability to meet customer expectations (35%).
Advancements in technology are majorly enabling digital transformation in the world of retail, and this evolution is powerful since commerce is consistent as well as an inevitable part of our lives. Every brand’s future depends on being able to leverage these developments and successfully cross-collaborate across various channels and functions to meet the market requirements.
Factors that Re-Imagine Digital Transformation in Retail What can retailers do to be ahead of the game? To begin with, look beyond the regular eCommerce tactics and restructure your strategies to disrupt the industry. Listed below are some of the approaches that redefine every part of the business, including sourcing and pricing, inventory tracking, automation, and customer experience management.
The Omnichannel Strategy The worlds of commerce, eCommerce, and m-commerce have consolidated, and everything has become omnichannel. It’s no longer about the store or the desktop or the smartphone, but all of them. For instance, a customer may be inside a retail store but accessing offers and information available on its website or app. This paradigm shift has been more prominent for the last couple of years.
A study by PWC reveals that by 2020, the demand for omnichannel customer experience will be amplified by the need for nearly perfect execution.
eCommerce was an emerging trend for many years, however, the offline and online entities have now come together in such a way that an omnichannel strategy has become inevitable for survival. Retailers now need to ideate and execute a shopping experience for their customers that includes every possible channel (offline and online), irrespective of where the customer finally buys.
Machine Learning and Predictive Analysis Machine learning has largely enabled personalized shopping for customers since it allows mapping the patters of the buyers. This opens a lot of possibilities such as product recommendations for customers, altering the prices based on their interests, promoting products that they might need, and timing products based on specific
events and occasions. Whether customers shop online or offline, more often than not, they do not know they want it unless they see it.
A report by Statista shows 45% of respondents deploying machine learning for customer engagement in their organizations.
Also, as against human-powered processes, machine learning can help scale a business faster as well as make informed decisions considering it collects and analyzes data at a great speed. Machine learning subsequently helps build the buyer-retailer relationship and turn them into loyal customers.
Augmented Reality Heard about Ikea’s AR app that lets buyers visualize how a piece of furniture will fit and look in their home when they shop for it online? More such pioneering brands are already taping the power of augmented reality to smartly simplify shopping. Bringing together physical interaction and online shopping, AR helps enhance the customer experience like never before. In the stores, it reduced staff assistance as well as inventory.
Gartner says that over 100 million consumers are already shopping in AR online and in-store in 2020.
With the help of AR glasses, headsets, and smartphone functionalities, retailers are extending an experience as well as ensuring efficiency in promoting and selling the products. One of the most notable benefits of using AR is that it can significantly help in reducing the number of return items from shoppers.
Business Efficiency with IoT The Internet of Things (IoT) is changing retail in many ways, including blurring the line between offline and online shopping experiences. With numerous sensors such as card readers, cameras, scanners, contactless NFC tags, and in-store promotion systems, it is easy to gather data and increase business.
McKinsey estimates that the Internet of Things has a total potential economic impact of $3.9 trillion to $11.1 trillion per year in 2025.
Some of the advantages include real-time product promotions based on buyer behavior, insights on the movement of both products and customers, and availability of store specific data for sale comparison. IoT market is projected to grow from an installed base of 15.4 billion devices in 2015 to 30.7 billion devices in 2020 and 75.4 billion in 2025.
The Way Ahead
Digital transformation has to be all-encompassing. If you are only focused on making it big online, there is a disadvantage there. Remember to equally innovate in the physical and digital spaces and offer your customers the best of both worlds, no matter where they shop. It is also important to understand your customer’s behavior patterns in this consumer-centric industry. Offering them an unparalleled shopping experience that converts them into loyal customers is the yardstick of your digital strategy’s success. Most companies are employing technology in smart ways to meet their goals. A survey conducted last year showed that 44% of companies have already started a digital-first approach to operations and customer engagement. What’s your strategy to trade in this digitally dynamic retail world? Source - https://www.netsolutions.com/insights/digital-transformation-in-retail/