Digital transformation in the retail industry is one of the fastest moving examples of technology-driven business change.
In this article, we’re going to look at what is driving digital transformation in the retail industry, the risks associated with not transforming successfully, and 3 top digital trends for retailers to consider.
What is driving digital transformation in the retail industry?
i-scoop recently identified the main catalysts for digital transformation in the retail industry as being:
- The evolving expectations from the so-called digital or omni-channel shopper.
- The need to blur digital and physical experiences with in-store experiences, reflecting the disappearance of the borders between digital and physical already existing in the mind of the consumer.
- Challenges on the level of the supply chain, which are really crucial and generally speaking far from well digitalized.
- Competition from digital and overall customer experience champions and increasing cost pressure.
- The impact and opportunities in areas such as data-driven optimization and marketing, empowerment of staff and new technologies.
- An appetite from shoppers to have a personalized experience, which is pretty hard to achieve as it depends on the context and can range from the need to find and buy things fast to the exact opposite: have a relaxed and immersive shopping experience with digital technologies available all over the place and used for anything from smart displays to even music and ambiance.
The risk for retail businesses that don’t digitally transform
The retail industry is in a state of rapid and constant flux. According to Eli Finkelshteyn, CEO and co-founder of Constructor, “technology is at the forefront of much of that transformation.”
Finkelshteyn says, “many of today’s shoppers are digital natives and have high expectations for their digital experiences.
“On the positive side, they’re increasingly showing that they’re willing to pay more for a better customer experience.”Information Age
In fact, 39% of respondents decided to shop elsewhere after having a negative digital experience. Even worse, 38% told their family and friends about it. We all know how powerful a negative review can be.
UK readers in particular will remember how the once mighty have fallen, when they think back to brands such as Woolworths, ToysRUs and HMV, which have all gone out of business or declared bankruptcy.
You don’t want to fall prey to the same fate, now do you?
Top 3 trends for digital transformation in the retail industry
1. VR training
Walmart has been leading the pack in terms of digital transformation in the retail industry. One example of this is their progressive, technology-focused training practices.
The multi-billion dollar corporation has installed VR headsets in its employee “academies” with the aim of training their one million in-store employees. 45 VR programs were created to train Walmart staff in everything from slicing deli meats to re-stocking shelves.
“Virtual reality offers a unique opportunity to simulate real-life professional situations to a degree where the brain and the body respond as though they’re the real world.”Colin James Method
This allows you to fully prepare prior to the main event, meaning retail assistants can deliver impeccable customer service, while buyers and professionals can deliver polished presentations.
2. AI customer service
Chatbots are the most obvious example of digital transformation in the retail industry. Robot-assisted customer assistance or cognitive computing will continue to grow as we come to the end of this decade.
The retailers that do it well will move to the head of the pack.
Technology like AR and VR is great to draw customers into the store — but at the end of the day, customers want quick and easy shopping experiences, and they want to feel valued.
3. Cardless checkout
More and more customers expect to be able to make purchases without actually having their wallet in hand.
Throughout the rest of 2019 and beyond, we should be seeing more improvements in cardless retail.
It’s often thought of as one of the “unsung heroes” of digital transformation trends in the retail industry. But cardless payments, it goes without saying, will be the way of the future.
Final words of advice
Retail organizations must identify their problems, and use technology to solve them — not get caught up in a host of shiny, irrelevant technologies.
Consumers are moving fast, which means that retailers need to think long-term and realize that digital transformation is an ongoing thing. It’s important to embrace change, while remaining flexible and agile.
Retailers should build a culture where they are willing to “fail fast”, meaning they try something new, then either win or fail in quick succession before moving on. Only those that can transform quickly and experience immediate benefits will survive.