August 12, 2022
In today’s retail environment, competition is fiercer than ever. It’s all about the customers today, and only a personalized, unique retail experience will capture their attention. In spite of this, many retailers are slow to adopt new technologies that enable them to adapt to the customer’s changing needs – they must evolve with the customer, as the customer won’t change for them. Without doing so, they will be seen as irrelevant, which will mitigate their impact.
What can retailers do to differentiate them from the competition, and deliver the kind of exceptional experience that customers expect? Well, the answer is Digital Transformation.
Digital technology has created new dynamics in the digital transformation of the retail market for the collection, storage, analysis, and distribution of information. By 2026, the Global Digital Transformation Market in Retail is expected to reach USD 388.51 billion and grow at a CAGR of 18.2% over the forecast period (2021-2026). With the accelerating pace of digital transformation, the retail industry faces plenty of benefits as well as some key challenges.
Taking advantage of new technology now involves much more than simply creating an online store. So, we’ve compiled key research and insights to show you why digital transformation is important for retailers to stand out from the competition.
1) Transforming in-store Experience: A store is no longer just a sales channel. In essence, they are extended arms of the digital touch-points of an enterprise. Thus, organizations strive to integrate innovative digital experiences to ensure a connected and engaging in-store experience. With the convergence of multiple technologies, retailers can deliver tailored experiences to customers’ in-store.
2) Streamline Operations: A key pillar of retail digital transformation is optimizing operations, which highlights faster, data-driven decisions, more efficient workflows, and a greater level of functional visibility. If you want to give your customers an uninterrupted cross-channel experience, stability is crucial. This is where ERP comes in. Integrated ERP systems give businesses a comprehensive view of multi-channel functions, including supply chain, customer service, and transactions, as well as purchases and returns.
3) Customer Service: In the digital age, customer behavior is more critical than changes in technology. In order to resolve issues, different customers prefer to use multiple touchpoints, expecting an integrated and seamless experience. To enhance customer experience, traditional and digital channels must complement each other in the new age of commerce. Consequently, retailers are becoming proactive, adopting an Omni-channel strategy using digital transformation to provide customers with multiple ways to interact with them, integrating social media, online, and mobile, among others.
4) Reimagine Products: Maintaining the pace of innovation requires proactively integrating new technological developments into your offerings. Additionally, it requires adequate software and tools. To get the best Return on Investment (ROI), you should focus on software and systems that emphasize predictive analysis. Today, with the advent of digital transformation technology, some systems combine statistics obtained from ERP, CRM, and BI with machine learning, and others utilize digital intelligence to identify new sources of revenue and growth.
5) Supply Chain: Flexibility and transparency are essential to every organization’s supply chain. However, most companies lack visibility at critical supply chain points, leading to considerable overselling and underselling. Using technology, we can obtain an accurate and timely picture of our stock across all nodes, improving efficiency, minimizing costs, and mitigating risk. Transforming the supply chain through digital transformation creates unique opportunities for value delivery. As a result of enhanced collaboration and extensive information availability, a digital supply chain ensures improved agility, reliability, and effectiveness.
6) Establish Stronger Connections: Using digital channels, such as social media, opens up all sorts of possibilities for getting to know your customers. Data collection and analysis of customer behavior allow you to identify consumer purchasing power movements. With these insights, you can run more targeted marketing campaigns and tailor your offerings to your customers’ preferences. As a result, the cost of acquiring new customers’ declines and the brand connection becomes stronger.
7) Automated Processes: With the help of digital technology, you can automate your order fulfillment process, resulting in lower overhead costs and better margins for all your sales. Automation streamlines your business operations and frees up time. When your team spends less time on manual tasks, they can focus on providing excellent customer service.
8) Using Data to Increase Brand Engagement and Sales: Consumers can engage with brands in a variety of ways, and each provides the opportunity to deliver personalized communications. Research shows that 37% of online shoppers want to receive personalized offers based on their spending preferences, while 31% want personalized content or advice. To gain a clearer picture of their customers’ preferences, retailers need to break down data silos within their organizations. Using point-of-sale, website traffic, email engagement, and media impressions, retailers can create targeted campaigns, personalized offers, and customer-centric products and services, leading to higher brand engagement and sales.
9) Greater Insight into Buyer Preferences: The more data you collect, the better the customer experience will be. With artificial intelligence (AI) and machine learning, you can better understand what your customers are viewing, buying together, and other vital information. Then you can use this information to increase conversion rates.
10) Access to a Wider Target Market: A digitally advanced business can take advantage of shoppers, gaining access to a broader market. With mobile devices, customers can access your store anywhere. Through APIs, you can create personalized recommendations, fulfill orders through delivery partners, and provide online ordering, in-store pickup, among other services.
Digital transformation in retail sounds exciting but how do you get started? As a retailer, you need to meet the changing needs of your customers: you can’t force the customer to follow your path; you need to follow theirs. And the easiest and most cost-effective way to drive digital transformation journey and keep up with the trends in retail industry is by joining hands with a partner.
Are you ready to experience the benefits of retail digital transformation? ZoftSolutions is a leading digital transformation company in Canada that assists enterprises and technology providers with seamless digital transformation, business efficiency, and actionable insights.