Digital transformation is changing the retail industry. Businesses are experiencing many changes now that so many consumers have digital devices at their disposal. How are retailers evolving with digital technology, and what does it mean for them and their shoppers?
What Digital Transformation Means for Retailers
Technological advances allow retailers to make headway in increasing margins and streamlining new processes. Digital transformation provides a customer-centric approach, innovation, agility and data intelligence.
Technological updates are expanding, and retailers have to focus on these new advances by restructuring how their businesses operate. Inventory planning, pricing structures, customer expectations, supply chain management and employee engagement are some ways retailers expect to restrategise and increase their revenues.
Digital Transformation Matters In the Retail Industry
Companies are fostering growth in the development of digital integration. Retailers are hiring top-talent employees to bring products to the market for faster productivity through collaborative tools and digital technologies.
One example shows that the cosmetics industry is constantly evolving for faster communication and to prevent delays on orders. The beauty supply chain is leading the way with EDI (electronic data interchange). EDI technology automates exchanges between invoices and other documents for more efficient transaction processing.
Companies are also using best practices in the face of digital transformation by reorganising their departments and forming cross-functional teams. These dedications ensure retailers can focus more on the best ways to serve customers. Retailers are looking to change the in-store experience since 40% of consumers want more sales associates to increase their knowledge of product offerings.
5 Ways Digital Transformation Is Improving Retail Sales
Retailers are fomenting a culture by adopting innovation and redefining their decision-making processes through new customer insights and data technology. This adaptation improves organisations’ engagement with customers, which provides more value for their business.
1. Enhancing Shopper Experience
Digital transformation is influencing the way shoppers experience the retail industry. More consumers are using digital devices to shop on the internet. In the past year, 65% of worldwide internet users have purchased a product online. To increase productivity efficiency, employees can offer higher quality services with the use of digital tools. While employees can better serve more customers, these tools provide a pleasing experience for the customer buyer journey.
2. Operational Improvements
Cloud technologies are providing a way for retailers to improve their operations. They allow retail workers to respond more quickly to customers, which advances overall support. Real-time data is readily available to assist with product supply and demand predictions to ensure stock is in place ahead of time.
3. Increasing Communication
Chatbots, social media, websites and mobile apps provide retailers with a better way to communicate with their customers.
Artificial intelligence (AI) automates the customer shopping process in physical stores by allowing them to check out without a cashier. It’s also automating the process for consumers who shop online through websites and mobile apps as well. AI assists retailers with enhancing the customer experience by tracking inventory, locating products, memorising customer preferences with enhanced personalisations and replenishments in stock.
5. Increasing Revenue
Digital transformation is creating a chance for retailers to reach more customers, and the availability of this allows them to generate more revenue.
4 Digital Trends Improving the Retail Industry
As digital transformation benefits retailers in several ways, technologies are still in the process of evolving. Here are a few digital trends to keep an eye out for:
1. Augmented Reality (AR)
AR technology is available for customers to see how products look from home digitally. One excellent example is Target’s mobile website. A few years ago, Target launched a functionality called “See It in Your Space.” This technology allows customers to view furniture in their homes from a 3D perspective.
Amazon has also partnered with L’Oreal to offer AR for beauty shoppers. Through the Amazon store’s app, customers can view several lipstick shades to see which colours look best on them. While lipstick shades are the only option to try on at the moment, more beauty products will be available in the future.
2. Mobile Apps
Mobile apps allow customers to connect with retailers in more ways. With the touch of a button from their smartphones, people can read product reviews, look for updates and contact customer support when needed.
3. Internet of Things (IoT)
IoT enables retailers to track and collect data more efficiently with point-of-sale, supply chain planning and inventory management. It’s also available for retailers to offer real-time product promotions through behaviour insights. Conversion rates are also increasing with the practice of upselling and cross-selling through consumer data and insights on purchase history.
4. Virtual Reality (VR)
VR technology can enhance how customers shop. This technology will be more readily available to allow people to shop for houses, cars and more without leaving their homes.
Digitalisation Is Changing the Retail Sector
Digital transformation is benefiting consumers and retailers alike. As technology advances, businesses should strategise new ways to implement it. Retailers need to conform to consumer demands to drive competitive advantages.