Digitally Transforming the Consumer Experience for Retail
As the Internet of All Things (IoT) continues to radicalize the global economic landscapes across sectors, it is essential to understand that its application and implication vary with each industry. While a services-oriented sector will find consumers adapting to this change quickly, consumer behavior in retail is different. The global digital retail transformation is projected to reach USD 1009.8 billion by 2025. However, given the traditional element of physical touch and feel, that marks the essence of retail, it needs a more nuanced transformation to appeal to its consumers. Holistically translating the shopping experience on a digital platform requires more than buy and sell-transactions. Providers are analyzing consumer preferences to innovate, personalize and recreate the shopping experience to gain a competitive edge.
Pillars that are pivoting Digital Transformation for Retail:
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Digital Marketing
Deploying various digital marketing tools, retailers are upping their game by establishing a more significant online presence and recall. Influencing consumer perception and engagement can help foster better connections between consumers and providers
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Omnichannel Platforms
Creating an omnichannel presence is a pre-requisite for all retail sellers, given that the digital shift has swayed the consumers. Besides adding to the convenience, it also drives a seamless and unique shopping experience
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Big Data and Analytics
Leveraging data correctly allows retailers to maintain a 360-degree view of customer activities and translate it into better service offerings. Retailers can also gauge trends better through data analytics and offer customized pricing
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Artificial Intelligence (AI)
The retail sector can use AI and machine learning to redefine operational strategies, enhance product catalogs using metadata, conduct a sentiment analysis for customers and leverage perceptive insights toward better demand forecasting and planning. Singapore-based Trax leverages shelf and ceiling cameras to track and update the stock on the shelves, keeping retailers and CPG companies abreast of the changes
Holistically Transforming Retail
Transforming the brick-and-mortar set-ups to digital grounds of experience, retailers have effectively implemented holistic retail strategies to attract and sustain customers in the past decade. According to a Forrester report, U.S. online retail penetration is expected to increase by 28 percent by 2028. Here are a few benefits of digital transformation in retail, compelling retailers to digitize and innovate:
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Efficacy in Operations
By enabling an integrated view of inventory, purchases, returns and much more, digital technologies can effectively streamline operations through automation, saving time and manual efforts. A leading tech e-commerce store, Newegg Commerce, Inc., has deployed P800 robots in its stores to lift and carry mobile shelves to employee workstations for quick packing and shipping; this has not only improved the picking efficiency but also helped in optimizing the storage space at their stores
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Better Customer Experience
Omnichannel platforms and online communication make the whole experience interactive and hassle-free for customers. Creative content such as surveys/games, etc., also encourage user participation and engagement, allowing providers insight into their preferences and establishing a personal connect
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Reduced Costs
Hardware expenditures can be considerably reduced with technologies such as the cloud. Automation has overtaken most labor-intensive operations, saving a big chunk of operational expenses
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Informed Decision-making
Big data analytics provide insights into buying/selling patterns, consumers’ preferences and more to help providers get the data edge. According to a recent Forrester survey, as many as 69 percent of U.S. citizens do not mind sharing their details to avail of deals. Retailers are making informed decisions and translating these into higher conversions using the advanced analytics
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Competitive Edge
Channelizing machine learning algorithms and with enhanced communication through multiple online platforms, retailers can build better personal connections with their consumers
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Sustainability
From data-driven decision-making to optimized supply chains and energy-efficient operation management, digitization is helping reduce the carbon footprint at various stages, paving the way for sustainable development for the retail sector
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Upselling Opportunities
Application Programming Interfaces (APIs) have enabled the process of recommendation preference-related products, allowing providers to upsell and cross-sell without any extra costs. As Amazon Alexa sales grew by 35 percent in 2023, over a half billion devices that are Alexa-based were purchased in the same year
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Better Marketing
With access to valuable data and insights, creating marketing campaigns is easy for retailers. Targeted campaigns and multi-channel marketing strategies enable providers to sell better and faster. Around 15 percent of digital shoppers reportedly spent money on groceries and supermarkets in 2023, displaying the shift that retail can witness with the right marketing tools and frameworks
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Wider Market Access
Internet has permeated the retail sphere, allowing customers from across the globe to buy what they want with just a click, helping sellers cater to a broader range of audiences. 16 percent of global shoppers made purchases from across borders (ref. a September 2023 survey within 41 countries)
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Benefits of Automation
Automating the most repetitive tasks, digitization has helped retailers save on costs, timelines and manual effort, enabling them to invest more of it towards innovating and better positioning their brand
Future of Digitization in Retail
Integrating digital and physical space in retail has spawned new immersive experiences for customers that are multi-channel, seamless and convenient. While retailers continue to innovate to offer more hyper-personalized experiences, there is also a need to push the boundaries regarding product discovery and security. Future proofing the technology to ensure agile business models is a prerequisite for retailers. According to a Forrester report, around 31 percent of B2C marketing decision-makers need help to maintain data quality. While data plays a significant role in creating holistic digital experiences, providers should also invest in ensuring secure and optimal utilization of this big data, keeping consumer privacy and safety in mind.