Digital technologies have disrupted many traditional business models by transforming or creating an entirely new business model. Uber, Airbnb, Skype, Alibaba, etc. They are some of the best examples of companies paving the way for new digital business models thanks to digital transformation. If we take a look at the retail industry, which is not yet fully digitized, we can predict that many will adopt digitization in the future. Thus, the digital trend will transform the industry or improve it (of course in favor of the customer, as was the reason for the above examples).With advances in technology, the availability of real-time data, and analytics, the retail industry will evolve to adapt to consumer preferences. Unlike in the old days, the consumer has access to information about the product or service and various purchase options. Online shopping has an improved user experience with greater personalization. According to IDC research, by 2020 at least 55% of all organizations will become digital with new business models and digitally sold products and services.To remain competitive in this rapidly changing industry, retailers need to take advantage of the latest digital technologies. They must transform to meet changing consumer behavior. They must use digital technology to transform their business and create a new business model by putting the customer at the center of attention.
What is digital transformation?
Digital transformation uses digital technologies to create new or change existing business processes, cultures, and customer experiences to meet changing business and market needs. This reimagining of business in the digital age is called digital transformation. In retail, there is nothing more than a shift from a product-centric approach to a customer-centric approach with an emphasis on good user experience.
What are the challenges on the path of digital transformation?
With the incredible growth of e-commerce, in-store purchases have declined. A good majority of consumers still prefer to visit physical stores, as they want to see, touch and try the product before making a purchase. They can gather product information online and make a purchase online or try a product and order online. This shows that consumers prefer a combination of the two. Retailers who try to bridge the gap between online and offline and go physical have a better chance of winning a customer. Retailers need to leverage the latest technologies to create a cross-functional customer experience that allows them to extend personalized offers across channels.Even if sellers offer premium products, the customer is only impressed if they provide a premium experience. Although price offers and promotions form the foundation of the customer experience, the critical factor is hyper-personalization. Retailers who can predict customer behavior, anticipate their needs and extend customized offerings at the right time create a highly loyal customers.
Key elements of digital transformation
Experience in the store
Delivering better customer engagement and rich in-store experiences enable retailers to connect with customers across all touch points and influence purchases. They can use beacons, IoT devices and smart shelves to engage shoppers with in-store navigation, real-time product pricing and offers.
Optimized consumer purchase journey
Optimizing the end-to-end experience throughout the customer lifecycle plays a key role in mitigating compensation and ensuring customer loyalty. Retailers need to use data analytics technologies to understand customer behavior and preferences to make personalized offers or product recommendations at each stage of the customer lifecycle.
Advanced payment solutions
Frictionless payments or digital payment terminals enable consumers to move from cashless to contactless, significantly reducing transaction times.
Advances in artificial intelligence and machine learning technologies have transformed customer care interactions by automating routine services that do not require human intervention. Using a digital bot powered by AI and ML technologies enables merchants to answer standard questions, manage returns, help customers effectively with product inquiries, etc. And thereby improving the user experience.
Digital transformation is key to retailers’ success
Hyper-personalized user experience is high in this digital economy. To win over the modern shopper, retailers must create a superior shopping experience that sets them apart from the competition. They need to establish an exceptional experience regardless of the channels to acquire retail customers.