Digital Transformation in the Retail Industry: Benefits, Trends, and Prospects

Digital services variety, number, and opportunities are expanding exponentially, and many of them shape consumer preferences and change requirements to retail. The necessary technologies and platforms capable of satisfying almost all business needs in this area are currently represented on the market.

The speed of technological development and changes in consumer behavior is constantly growing. Consequently, the ability of businesses to change rapidly is a key factor in their successful development.

Retailers start to increasingly comprehend that the ongoing changes are inevitable and that the innovations should be introduced systemically.

Nowadays, the one who is not afraid to invest in new technologies becomes a winner.

How Digitalization Is Transforming Retail:  Advanced Technologies and Benefits for the Industry

Digital transformation in the retail industry takes place in three key areas: business models, customer service, and business processes. Business owners, management staff, and specialists realize it is no longer possible to maintain the position in the market in an increasingly competitive environment without using modern technologies.

The current trends that will shape the retail in the nearest future are as follows:

1. Product customization. It implies moving from the same product for everyone to individually designed products.
2. Marketing customization. It forms offers based on a multilateral analysis of personal preferences.
3. Big Data in retail is used not just for recommendation services. This innovation also allows forming product assortment, placing products on shelves, and monitoring product availability more efficiently. Besides, retailers can use Big Data to determine product prices better.
4. Joint consumption. It provides the possibility to access any product as a service.
5. Real-time shopping. This feature allows consumers to order and retailers to deliver products very quickly.
6. Virtual and augmented reality in retail can improve user experience and take customer interaction to a whole new level. These techs change the consumer interaction principles and allow getting even more customer data.
7. A higher automation level of complex processes and multi-channel interaction with customers.
8. Automation in retail stores and human factor gradual elimination transform the retail of the future into a technological industry.
9. People prefer a seamless brand experience. In the time of digital transformation, this trend is becoming more pronounced. Such digital trends as visual product search and social shopping are rapidly gaining popularity.

Every retailer, like any other business owner, strives to achieve two main goals — to increase profits and reduce costs. Consequently, most retailers pay maximum attention primarily to consumer interaction, as this very direction has a direct impact on profit growth.

Present-day shoppers are dynamic and mobile. They want not only fast delivery and easy payment for their purchases but also look for personalized offers. Consumers appreciate it when you offer them the right product at the right time while using a convenient communication channel.

However, digital transformation is not just about technology. Even though the right tools are crucial, the appropriate expertise and competent partners are also important.

To become successful, businesses must learn how to efficiently balance four key elements in their activity: people, action, collaboration, and technology.

Difficulties in implementing digital solutions in retail

Any changes in the company are always perceived with caution, and employees often worry they will eventually be replaced by robots. The management staff has to explain to them that all changes take place not to downsize the company but to improve working conditions.

Why are many retailers still reluctant to implement digital technologies? The main reasons for this attitude are as follows:

• Low awareness. Potential customers know little about technology, and businesses do not prioritize digitalization.
• Lack of specific expertise for introducing corporate innovations.
• Lack of resources to implement digital transformation. The project implementation can draw considerable costs. Moreover, businesses will need even more costs to implement and further operate relevant solutions.
• A corporate culture fails to stimulate innovation.
• Companies excessively focus on operational tasks.
• Businesses operate trying to avoid risks but not to create additional value.
• Problems with strategic planning. This situation is typical for a large number of companies. Many of them lack a clear plan for the coming years, including those related to digital solutions implementation.

The main reason, however, is that most retailers are still in the awareness stage and do not fully comprehend the possible benefits of digital transformation. If this topic interests you in more detail, we recommend you to read this article on our blog.

Implemented modern digital solutions in the retail sector allow businesses to optimize their processes and obtain more necessary information. They can also make more sustainable, informed decisions and successfully compete in the market.

We assist companies in getting through all stages of the digital transformation process and in mastering innovation management skills. If your business needs help in implementing such a project, we will use our experience in digital transformation in various industries and become a reliable technology partner for you.

Contact us, and let us dwell on the details!