As technology is advancing, the industry is getting increasingly competitive. Customers are the making or breaking point of any business. Given the number of alternatives for each product available in the market today, it is incredibly challenging for your product to get noticed. Only a unique and seamless retail experience can engage the customers and help in making sales. Moreover, evolving with your client base is an essential aspect of your business’s success. This is an example of digital transformation in retail industry. However, most retailers are slow to adopt new strategies – being at a significant disadvantage.
It is the world of technology. Digital transformation is the present and the future. The quicker retailers realize it, the better it will be for their business.
What is Digital Transformation?
Digital transformation refers to the idea of using new technologies and strategies to improve employee satisfaction and customer experience. It helps in enhancing brand loyalty and increasing profits.
Digital transformation in the retail and relevant services can prove to be a great transition, significantly improving the customer experience. It can be integrated into the business in many ways, including:
- Omnichannel shopping and delivery
- access to multiple stores from anywhere, anytime
- social media advertisement
- analytics to improve strategies
Why is it the Optimal Time for Digital Transformation in Retail Industry?
There are numerous reasons why retailers should consider digital transformation. To discuss some of the most important ones:
Firstly, one of the biggest reasons for making the digital shift is the current coronavirus pandemic. The post COVID world would be different from what it used to be. Customer demands would change, and the overall economy would be different.
The world has already shifted online. As human interaction is minimized, online communications have increased. This gives a great advantage to retailers to shift to a digital world. Moreover, as more and more people would be on the internet, there will be a greater chance of gaining a customer base and making profits.
Digital presence is important
As discussed earlier, it is the world of the internet. Everything is being done online, and the retail businesses with an online presence are already benefiting more than their non-digital counterparts. According to recent statistics, more than 20 retail businesses have filed or are thinking about filing for bankruptcy during the coronavirus crisis. Therefore, a digital shift is a perfect way of preventing your services from meeting the same fate.
Supply Chain is Vulnerable
The pandemic has affected many retailers who failed to predict the changes in demand, leading to significant losses. They need an accurate way of keeping track of the changes in customer dynamics, making digital transformation necessary.
Customers are online
Customers are most affected by the restrictions implemented due to the pandemic. They are online and relying on the brands to provide them with the best service. Therefore, brands that already have an online presence are more likely to thrive in the current economic depression caused by COVID.
Challenges of Digital Transformation in Retail
Since customers are the most crucial part of any business, digital transformation in retail can not only prove profitable but also increase customer satisfaction. Therefore, new technologies can be used to drive revenue and build innovative models that can help a business grow. Due to the ongoing coronavirus crisis, the world has shifted online. Hence, giving retailers a great advantage to shift towards a digital future.
Although digital transformation will be extremely beneficial for the retail industry, it does come with many challenges. To delve into some of them:
Firstly, shifting to a digital world requires much change. Employees and customers will have to completely abandon their traditional ways of dealings and make a shift towards the computerized world. Retailers are sometimes doubtful about the change and present unwillingness to go through with it.
Secondly, sometimes, digital transformation is too complicated for retailers, especially if they have no prior expertise in the field. The traditional ways are more straightforward and hence, more preferred by the retail team and the customers.
Initiatives and strategies take time to come to their optimal conditions. Once fully functional, they can significantly enhance customer experience and provide an ideal environment for them to interact with your brand. The commitment, however, is not something retailers are ready to sign up for. They want immediate results that are hard to achieve.
The foundations of a business need to be healthy for a complete digital transformation. Further, choosing the correct technology is also very important. Although it is beneficial, many added risks can damage the company’s overall infrastructure.
Key Benefits of Digital Transformation in Retail and Relevant Industries
There are numerous benefits of making a shift to a digital world. To discuss some of them:
Optimizing your business processes and strategies is extremely important in the competitive world today. Even small aspects of your business can play a crucial role in determining its future. Data analytics can help understand the customer dynamics and design strategies that would help retain your client base. Further, it also helps you reshape your policies and marketing campaigns to increase profitability. Through the analytical tools, you can:
- Optimize price
- Predict future performance
- Understand trends
- Predict demand
- Select the best investment opportunities
- Identify customers
Today, artificial intelligence can play a significant role in improving the customer experience. It can be implemented in several areas of your retail business – including inventory management, customer support, and fault prediction, to help your business grow and succeed. AI can provide:
- Great customer support
- Virtual trial rooms
- Behavioral analytics
- Better data collection
Internet of Things
Lastly, IoT devices can improve employee satisfaction and also provide better service as compared to their human counterparts. You can invest in many devices that can make the business processes seamless and practical. Some of them include:
- Delivery robots
- Automated checkouts
- Smart shelves
- Layout optimization for your store
To sum up, digital transformation is undoubtedly a step to a better future. Especially due to the current socio-economic conditions as a result of the coronavirus crisis, a digital shift is an optimal decision for retail businesses.