A majority of global businesses, around five-sixths, have prioritised digital transformation as their primary IT technology objective for the year 2023.
The influence of technological advancements is not evenly distributed across all sectors. Among them, the retail industry has been highly affected by digital transformation. With the pandemic, there has been a significant change in consumer shopping behaviour leading to a rapid adoption of digital technologies.
It is evident that consumer behaviour is not the only factor to be taken into account while digitising the retail industry. The pervasive impact of digitalisation has made it impossible for companies to ignore it. Therefore, it is vital to acknowledge the significant changes that have taken place in transactions, sales platforms, consumer behaviours, and other retail aspects.
Do Other Sectors Share Any Similarities with Retail Industry Regarding Digital Transformation?
Without any doubt, the retail industry has been massively affected by digitisation. The influence of technology can be witnessed in various examples of recent digital disruptions across businesses of all sizes in the retail sector.
According to Gartner, one of the most substantial trends in the digitisation of the retail industry is touchless interactions. This trend provides customers with a contactless and risk-free experience, and its impact on the industry is extensive.
Contactless payment cards have become prevalent and more convenient than traditional payment methods. Similarly, mobile payment systems like Apple Pay have enabled customers to buy products through their smartphones. Furthermore, with self-checkout counters, customers can process transactions without any human assistance.
With the ongoing COVID-19 pandemic, there has been a growing inclination towards touchless interactions in an effort to decrease the risk of contagion through physical contact.
Customised Assistance as per your Requirements
Personalisation has become a critical factor in improving the consumer experience. The widespread use of digital channels has made it easier to customise interactions and provide customers with a sense of value.
Platforms have been created to offer customised assistance to clients. Customer Relationship Management (CRM) software, which stores and arranges customer data, can enhance Business-to-Customer (B2C) interactions. Furthermore, companies are using technology in numerous ways to personalise customer experiences, including:
- Recognising unique consumer groups and categorising their engagement with marketing emails and other relevant data
- Instantly responding to queries using chatbots
- Creating online content that is customised to specific users according to their demographics, geography, and other relevant attributes
- Providing product and service recommendations based on a shopper’s past purchases, interests, and browsing history
It is crucial for companies in the retail sector to adopt digital transformation by incorporating diverse digital platforms, tools, and tactics. Additionally, they need to guarantee that customers can access their products and services through multiple distribution channels, providing a consistent and easy-to-use experience across all channels.
Providing consistent information about inventory across the desktop website or mobile app of a store is crucial. Some businesses offer discounts or other perks to customers who shop through unconventional means to encourage the usage of their new mobile app. For instance, a store might offer a 20% discount on a customer’s first purchase made via the app.
Robotics and Computing Algorithms
The effective implementation of digital transformation in the retail industry is demonstrated by the use of automation, which is largely facilitated by Artificial Intelligence (AI) and its subset, Machine Learning (ML).
In order to rival Amazon’s algorithm for forecasting customer preferences based on past purchases and browsing habits, small businesses are increasingly creating their own recommendation engines. Additionally, algorithms are employed to anticipate consumer demand, which aids in inventory management and supply chain management.
Besides the aforementioned chatbots, you can train these tools to handle more complex customer queries.
Distinguishing Between Augmented and Virtual Reality (VR)
Retailers have been utilising augmented and virtual reality technologies to enhance the customer experience in recent years. Augmented Reality (AR), in particular, allows customers to virtually “try before they buy,” such as using a 3D self-portrait to see how potential new clothes would look on them. As the technology continues to advance, this trend is only expected to grow.
The surge in customer engagement throughout the shopping process has led to a substantial rise in revenue and a decrease in returns, which is advantageous for the company’s financial success.
How Does Digital Transformation Align with the Customer Experience?
With the world becoming more digital, what is the impact on customer service? How does this phenomenon affect customers overall?
Integrating digital technology into the retail industry is set to provide customers with a more immersive and unique shopping experience, resulting in higher customer satisfaction and loyalty.
According to the McKinsey Global Institute, “consumers are generally becoming more connected, less loyal, better informed, and primarily unconcerned with the channel they use.”
It is evident that digital transformation can significantly enhance customer loyalty. Customers who have a memorable and groundbreaking interaction with a brand are more inclined to return for future transactions. Therefore, it is crucial for businesses to explore new means of engaging customers and improving the shopping experience.
The Future of Retail’s Digital Revolution
Due to the constantly evolving digital landscape, organisations must prioritise digital acceleration to stay competitive and satisfy customers’ evolving needs and expectations. To thrive, businesses must promptly incorporate new technologies to keep pace with their competitors.
The future of commerce will feature heightened personalisation and customisation, digital exchanges between businesses and customers, virtual store investments rather than brick-and-mortar sites, and data-driven decision-making. It will be crucial to concentrate marketing and outreach efforts on specific target markets.
The shift to digital is a continual process. In order to thrive, retail businesses must also continue to evolve and enhance themselves.