Retail Digital Transformation: Key Trends and Innovation Retailers Should Know
A digital transformation strategy is a plan of action that describes how a retail company needs to strategically reposition itself in the digital economy. As time goes on, customer habits change, and this causes retail businesses to alter the way they operate as well. They innovate, leverage emerging technology, and change retail business and operating models.
The advent of digital technologies for collecting, storing, assessing, and distributing information has generated new dynamics in the digital transformation of retail businesses. At the same time, they have created fresh opportunities for vendors serving the market. This is one of the reasons why the global digital transformation market in retail is set to reach $388.51 billion by 2026. It was last valued at $143.55 billion in 2020.
In order to implement digital transformation effectively, a solid retail digital strategy is required. With this in mind, there are a number of benefits your retail business will be able to leverage, including the following:
What is digital transformation in the retail industry?
Digital transformation is the concept that a retail company should use new technologies and business models to provide greater consumer value and motivate employees to be more productive.
The benefits of digital transformation in retail
The benefits of digital transformation in retail are extensive:
1. Increase your productivity levels
Putting together a digital transformation strategy that involves the use of online tools, artificial intelligence, and other digital technologies, ensures processes can be enhanced or streamlined to lower workarounds.
Digital technologies help in smoothing workflows and automating routine work. Manual effort is reduced, meaning fewer errors and higher productivity levels. Tasks are completed quicker, which means that your team will have more time to focus on work of a higher value.
2. Boost agility
With enhanced productivity and the use of automation, greater agility is achieved. By putting together a digital strategy, retail businesses can truly become agile with operational areas and projects.
Addressing the utilisation of digital technologies that are responsible for the heavy lifting during your processes will make sure that all of the different teams and departments in your retail business become agile. This will speed up decision-making, reporting, information, and deliverables.
3. Leverage more opportunities
Opportunities are abundant, but competitors are too. It is in creating a digital transformation roadmap to determine and address challenges and change in your retail company that you can be better positioned to make the most of opportunities.
Approximately 85 per cent of company executives have stated that new retail business opportunities have arisen due to their digital transformation efforts.
Re-thinking your existing strategies will help you to unearth opportunities and ideas that may not have been feasible before, as well as the tools that help make them a reality.
4. Improve customer service
No one likes to deal with unsatisfied customers. By giving workers the tools to respond quickly and by automating elements throughout the consumer journey, both the customer and employee experience will improve.
What’s more, by streamlining consumer interactions, the service is going to feel a lot more consistent.
5. Higher levels of consumer engagement and satisfaction
Today, the vast majority of millennials interact online, and they make up a considerable demographic. Adopting a digital transformation strategy means you can meet their changing expectations and needs. This places your retail company where customers are, for example, engaging with them using chatbots, self-service platforms, and on social media.
6. Collaborate seamlessly
A lot of companies have increased their investment in cloud collaboration platforms, transforming the way their workers communicate and share information.
Document collaboration platforms deliver improved transparency. Employees are able to work simultaneously on documents, easily tracking changes for better version control. This is an important part of putting together a digital strategy for retail business improvement.
7. Enjoy greater profits
A digital transformation strategy provides a roadmap to dealing with changing consumer expectations, the speed of change, uncertainty, and leveraging the correct technologies to boost profitability.
Approximately 43 per cent of retail businesses that are deemed of high digital maturity have reported much higher net profit margins when compared with industry averages.
What are the key retail digital transformation trends?
- Digital commerce - Digital transformation helps you to leverage digital commerce, which brings many benefits. You can personalise your service while also quickly reacting to changing demand.
- AR technology - As physical and digital experiences blur, customers will use AR technology to shop in-store, online, or both. We’re already seeing the significance of AR in the latest luxury retail marketing trends. AR can help you to unlock new value propositions, for example, try-in and try-on.
- Seamless integrations - Seamless integrations help you to dig out data-driven insights so you can understand all elements of the retail journey, from managing inventory to keeping staff productivity levels high. You can enjoy better transparency while also delivering personalised consumer data, such as order history and suggestions.
What are the challenges in digital transformation in the retail sector?
Change is always met with scepticism, and this is something that is naturally a challenge. Businesses also face pushback due to the finances that are required to enact digital transformation.
Another one of the retail digital transformation challenges most encounter is a lack of expertise. Leaders need to be honest in terms of their technical expertise and capabilities for retail business transformation to be a success.
Are you ready to embrace digital change in retail?
As you can see, there are a number of benefits that are associated with digital transformation in the retail industry. In order to make the most of these benefits, it makes sense to work with an experienced and knowledgeable IT services provider who will be able to assist you. They will ensure that your retail business is prepared for digital transformation.
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