Digital Transformation in Retail: Transform or Perish
Digital technologies have disrupted many traditional business models, by transforming or creating a whole new business model. Uber, Airbnb, Skype, Alibaba, etc. are some of the best examples for the early disrupters who paved the way for new digital business models, thanks to digital disruption/ transformation. However, if we take the retail industry, it is not yet fully digitized, except for some early adopters. In the coming years, many key players would be embracing digitization and the trend will reshape the industry.
With advancements in technologies, availability of real-time data and analytics, the retail industry will be transformed to meet consumer preferences as they evolve. Unlike the old days, the consumer has access to the product or service information and different purchase options. Online purchases have elevated the customer experience with more personalization. According to IDC Research, by 2020, at least 55% of all organizations will become digital with new business models and digitally enabled products and services.
To remain competitive in this rapidly changing industry, retailers must leverage the latest digital technologies and transform themselves to meet the changing consumer behavior. They must leverage digital transformation technologies and create a new business model by placing the customer in the anchor position.
What is Digital Transformation?
According to SalesForce, digital transformation is using digital technologies to create new — or modify existing — business processes, culture, and customer experience to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation. In retail, it is nothing but moving from a product-centric approach to a customer-centric approach by extending hyper-personalized customer experience.
What are the Challenges Retailers Face in their Digital Transformation Journey?
Multi-channel buying experiences:
With the staggering growth in ecommerce, in-store purchases have come down. A good majority of consumers still prefer retail shops as they want to see, touch, feel, and try the product before they make a purchase. They may gather product information online and make an offline purchase or try the product and order online. This shows that consumers prefer a combination of both. Retailers who try to bridge the gap between online and offline and go ‘phygital’, stand a better chance to win the customer. Retailers must leverage the latest technologies to create an omnichannel customer experience, which enables them to extend personalized offers across channels.
Demand for seamless, superior customer experience:
A seamless customer experience allows both online and offline stores to complement each other rather than compete to keep customers coming back for more. Customers expect in-store retailers to keep track of their online purchases and treat them as loyal customers when they visit the store. Retailers must use advanced analytics for capturing customer data and produce meaningful insights to create an integrated customer experience.
Customer loyalty is driven by experience:
Customer experience fuels customer loyalty than just product features. Even if the retailers offer superior products, the customer is delighted only if they are provided with a superior experience. Though pricing offers and promotions are building blocks of customer experience, hyper-personalization is the critical factor. Retailers who can predict customer behavior, anticipate their needs, and extend personalized offers exclusively for them via their preferred channel creates a profoundly loyal customer.
Key Elements of Digital Transformation Strategies in the Retail Industry
Ensuring better customer engagement and rich in-store experiences enable retailers to connect with customers through all touch points and influence buying behavior. They can leverage beacons, IoT devices, and smart shelves to delight customers with in-store navigation, real-time product pricing, and offers.
Optimize consumer journey
Optimizing end-to-end customer experience across the customer lifecycle journey plays a crucial role in mitigating customer churn and ensuring customer loyalty. Retailers must leverage data analytics technologies to understand customer behavior and preferences to provide tailor-made personalized offers or product recommendations in each stage of the customer lifecycle journey.
Advanced payment solutions
Frictionless payments or digital payment terminals enable consumers to move from cashless to cardless, significantly reducing transaction times.
Advancement in artificial intelligence and machine learning technologies has changed customer care interaction by automating routine services which don’t require human intervention. Using a digital bot powered by AI & ML technologies enable retailers to answer standard questions, handle returns, help customers with product specification queries, etc. efficiently and thus improving the customer experience.
Digital transformation is key to success for retailers, perform or perish
Hyper-personalized customer experience stands tall in this digital economy. To win the modern customer, retailers must create a superior shopping experience that sets them apart from the competition. They must establish an exceptional omnichannel experience irrespective of the channels to win retail customers.
Experion partnered with one of the leading retail chains in Australia for transforming their legacy systems to match the changing business scenario. Our solution enabled them to reduce the legacy maintenance costs, and it leads to a 30% increase in customer response time.
Originally Published at Experion Technologies Blog