The pandemic has forced the retail industry to transform and rethink its models digitally.
Retailers are thinking about how they should respond to this immediate change, looking into using technologies and finding innovative ways to build up new business models that drive more revenue. For this, knowing the benefits and trends of digital transformation in the retail industry is crucial.
To get started with your transformation journey, you need to pay attention to some key insights that experts have identified in retail during the past year. What are they? This article examines 4 common challenges and 4 emerging trends, so dive in to explore them at your own pace.
Digital transformation in modern retail
Digital change is disrupting and revolutionizing almost all fields and industries, including education, healthcare, finance, media, and banking. Today, every business strives to improve and bring up to date their services and products, following the satisfaction of their customers and answering their needs. And when it comes to retail, digital transformation comes as a natural response to today’s needs and requirements, especially in a post-pandemic world.
Going digital requires a knowledge of the best new technologies and practices that would help drive innovation and revenue. At the same time, emerging technologies have a great impact on your business’ workflow and culture.
In today’s disruptive environment, retailers need to start building adaptable business models to scale. And 2021 is essential for creating and maintaining agility and flexibility while keeping an open mind to any changes in consumer behavior and enhancing trust and loyalty through improved customer experiences.
4 common challenges
Change management
Every change and transformation attempts to threaten and disrupt the traditional way of thinking and operating. That’s why, an organization that deals with pain points differently according to each department, will face a number of hurdles. Challenges arise when there needs to be a change in roles and to implement new working practices.
Commitment
To make a real transformation, you need to commit to going beyond simple initiatives that end up being a new website, for example, or a new mobile application. Moreover, commitment includes the assurance that leaders want this transformation, there are enough resources in place, and all teams can engage and follow the transformational journey.
Complexity
In every new project that includes complex tasks, you will need to choose the best partners to get the support you require for digital transformation. Complexity can be a hurdle when establishing strategies for customers, stakeholders, and employees as well.
Technology
At the foundation of digital transformation is, ultimately, technology. But searching for and selecting the right technologies, whether for products, services, or customers, is oftentimes difficult. Retailers should evaluate the risks and understand what new technologies are the most suitable for their organization and business goals.
4 emerging trends
These challenges are the first step in embarking on a digital journey and give you a better understanding of what could drive growth in the future, as well as what you should avoid. So, once self-assessment is done, and you’ve identified all the things that need changes and the areas you need to focus on becoming digital, the next step is to build your future-proof strategy.
Before you define that strategy, ask yourself what are the trends that could help and facilitate your digital journey.
1.Touchless interactions
Touchless experiences describe interactions that are physical-contact-free during a shopping process. These interactions are safe and comply with today’s requirements of social distancing due to coronavirus. Moreover, customers expect retailers to have all the safety measures in place, at all times.
Contactless payments, scan and go, virtual experiences – these are growing trends among retailers and customers in the past year. This also brings into focus a new level of personalization, making consumers feel safe and strengthening trust and loyalty, as well as overall satisfaction.
2.Data Analytics
The advantages of data analytics are not new and are a developing trend in the retail industry, helping businesses with:
- Predicting demand and future performance
- Forecasting trends and identifying customers
- Optimizing costs and driving higher return on investment
The retail market is evolving and becoming more competitive every year, and the need for optimizing processes is growing as well, to accommodate customers’ expectations. Today, data analytics is implemented at all stages of the retail process, helping to forecast sales and predicting demand. It’s also used to identify new opportunities quickly and effectively, as well as to create the best targeted marketing.
3.Internet of Things
Implementation of IoT devices accelerates the transformation of retail, boosting sales, creating personalized experiences, and growing customer loyalty. Traditional retail has changed significantly since the Internet of Things first made its mark on the industry, and now it can help businesses further through innovations such as:
- Robots—deliver items without the need for employees
- Smart shelves—automate tracking and checking items, and identify thefts
- Automated checkouts—deduct money from the customer’s digital payment app automatically and reduce the need for staff
4.Collaborative ecosystems and values-driven retail
The coronavirus pandemic caused, among other things, unprecedented changes in customer behavior as well as in shopping patterns. Traditional business models might not keep up with these changes, but here is where collaborative ecosystems come into play. New models might require partnerships with other businesses, marketplaces, or innovative platforms and partners, to enable transformation and business continuity.
As for today’s customers, they expect retailers to conduct businesses with integrity, honesty, and transparency. The need for products and services based on the consumer’s values is increasing, so companies need to reevaluate their own values.
Conclusion
The best way to navigate your digital transformation is to pay extra attention to what could bring you challenges, what’s new on the market, and how to build an effective strategy that meets the latest demands of your customers. Creating valuable and customer-centric partnerships is also part of a successful transformational journey, as well as thinking beyond short-term improvements. 2021 in retail is about reducing costs, streamlining workflows, and increasing efficiency.
