Trends in Retail Digital Transformation
Although changes are inevitable, we can clearly observe that the Covid-19 pandemic accelerates them diametrically. And it is not an entirely bad thing. Of course, the pandemic itself is, but digital transformation can bring multiple benefits to both consumers and businesses. In terms of digital retail, new trends are booming rapidly and influencing this industry’s development direction. For this reason, many companies, to stay afloat in this environment, had to rethink their business model and suit it to the requirements of the modern market. Those who have not adapted yet to keep pace with industry development and remain profitable must take digital transformation seriously. We present the most important trends and changes to be prepared for in 2021 and beyond.
What is digital retail?
The concept of retail itself is probably apparent to you. It is basically selling consumer goods or services to customers through various distribution channels to make a profit. Retailers meet the demand identified along the supply chain. Sometimes it is done to obtain final goods, including necessities such as food, and sometimes it is done for recreational purposes (they do not always result in a purchase). Digital retail is, therefore, a sale in which some or all of the process is supported by technology. So it can refer to e-commerce and all marketplaces, online stores, or so, and all innovations introduced to traditional brick-and-mortar stores, such as touchless shopping, voice assistants, intelligent store shelves, IoT devices etc. It also applies to the supply chain in the retail sector and innovations introduced in this sector, such as inventory tracking and management tools, autonomous delivery and more.
What role do digital tools play in retailing strategy?
Contemporary retail is one of the fastest-growing and most dynamic industries. It is also an environment where companies face constant competition and exercise to satisfy consumers whose behavior is constantly changing. Therefore, to a large extent, the challenges of retailers are to stand out from other competitors, for which large marketing budgets are usually needed. In addition, retail requires the supervision of many processes and procedures that consumers may not even consider daily. Orders require processing, and the end-to-end process of their implementation is often complex. Hence, there is also the supply chain, often from the production line itself to delivering goods to the customer’s door. No wonder modern technologies are starting to enter the retail industry with giant strides. Digital transformation and tools can be a solution to streamline and automate business processes, translating into a better customer experience. Thanks to various IT systems, artificial intelligence and the Internet of Things, observing inventory, production line processes, and delivery status are more convenient and allow you to eliminate errors, in-depth analysis, and save resources.
Moreover, notice that the presence of an online business is significant in today’s reality. Without this, the company cannot generate sufficient income. It is due to the current requirements of consumers who increasingly shop online. Digital tools are therefore becoming an increasingly inseparable part of retail.
What is digital transformation in retail?
The process of digital transformation in the retail industry covers all phases of retail operations. So it will be about sales and purchasing, as well as marketing, delivery and consumption. Strategies for carrying out digital transformation vary. Some businesses choose to go online completely; others combine traditional brick-and-mortar stores with online sales. Nevertheless, the digital transformation process requires adopting appropriate digital technologies to transform services, replace manual processes with digital methods, or replace older digital technology with newer digital technology. Such solutions bring higher efficiency, savings, optimization and many other benefits. Digital transformation is happening at a different pace in different areas of retail. According to the Digital Transformation Trends survey, financial applications lead the way in this field. Conversely, areas where less than half of the businesses have undergone a complete digital transformation or are at an advanced stage, include health and welfare, workplace innovation and manufacturing.
Three key trends in digital transformation in retail to watch
This trend is the aftermath of the noticed potential of social media. In addition, buyers increasingly rely on reviews and opinions from other buyers when buying online. Social shopping is about engaging other people in shopping. Communities and shopping channels connect people with similar interests. They try to use technology to mimic the social interactions that occur in physical shopping malls and stores. With the development of mobile devices, social shopping now extends beyond the online world and into the offline shopping world.
Advanced retail mobile apps
While retail mobile applications are not that new, consumers are demanding more and more functionality from them. The pandemic also had a significant impact on the development of mobile commerce. The pace of change is growing, which is why companies are turning to modern technologies. Here at the helm are AR, voice assistants, visual search, and chatbots. Augmented Reality helps you combine the actual shopping experience in a physical store without leaving your home. More and more companies implement virtual fitting rooms, allowing customers to try on virtual clothes, shoes, makeup, nail polish, and even see what a specific piece of furniture or decoration will look like in the consumer’s home. It encourages more and more customers to buy, who could have been sceptical about their purchases without seeing the goods.
A significant trend, which is helpful in the era of constant lack of time and people with disabilities, uses a voice assistant for shopping. Shopping with voice support helps you plan and do them during work or everyday duties. Consumers highly appreciate the convenience of such a solution and go through the entire purchasing process by voice. It is the direction of natural development for many retail mobile applications.
Visual search is an exciting innovation. The technology has been around for a while but has only recently become a retail tool. Aliexpress is at the forefront, which introduced it to its platform. Visual search allows users to easily find products photographed or visualised differently, translating into a higher conversion. The development of visual search in shopping also affects sales through image-based platforms such as Instagram and Pinterest.
The pandemic has led shoppers to avoid malls and supermarkets, and instead, they choose to visit online stores or apps of their favorite brands. Home grocery deliveries and contactless collection, already present on the market, have become many people’s everyday lives. As a result, many stores had to adapt to this trend for the benefit of consumers. Online ordering and payments are part of the daily routine. Brick and mortar shops also tried to respond to customer needs by introducing self-service checkouts, pay-and-go scanning, and in-app buying with a pick-up in the store.
How is digital transformation revolutionizing the retail industry?
The retail sector is undoubtedly going through a global revolution. Thanks to the capabilities of digital devices and the online counterparts of their favorite stores, consumers make faster and more informed purchasing decisions. On the other hand, retail businesses notice the potential and vast possibilities of obtaining relevant information needed to make purchasing decisions and better-suggesting products to customers, greater personalization and a better experience. Advanced technologies help eliminate numerous limitations in its services and expand business opportunities. Technological advances and the use of digital marketing have had a massive impact on the industry. Companies have better contact with customers, and it is easier for them to meet their tastes and respond to requirements. Purchasing processes have become more customer-oriented.
How did COVID19 affect the retail industry?
We have already raised many issues related to changes in consumer behavior caused by the pandemic and how the retail industry responded to it. First and foremost, consumers want safety and comfort. Even though we are on the right track to get out of lockdowns, many implemented changes and innovations will remain. Even after the pandemic is over, consumers will continue to prefer online shopping. Businesses that do not yet offer this have much less chance of winning customers.
Another thing is the growing advantage of smartphones over stationary devices. Convenience is critical – more and more consumers appreciate the convenience and pleasure of mobile shopping, and mobile payments are a must-have. Cybersecurity and data privacy protection also stay an essential issues. Developing a consumer data protection strategy is critical to building brand trust. Retailers aware of this matter inform users about what data they collect and employ cybersecurity specialists.
Future of retail transformation
The value provided to consumers will remain relevant. Regardless of the products or services offered, customers want to be sure they are getting high quality. More and more modern innovations shape the future of retail. 5G and its capabilities for faster, better data transmission are gaining attention. Soon IoT systems and robots will become everyday life, the extended battery life of which will allow for more prolonged operation thanks to low energy consumption. The popularity of cryptocurrencies makes them enter the retail market. Online payments have evolved into integrated, often Blockchain-based, which has led to digital wallets like Minerva. They also support traditional currencies where payments are often triggered with Touch ID or facial recognition. Overall, the future of retail looks very impressive. It is good to closely observe trends and adapt to changes to stay relevant in this market.