Disruption is snowballing across the retail industry, forcing retailers to create adaptable business models to scale using digital transformation. There's no doubt about the critical role that is played by digital transformation in modern retail. However, the challenge for companies is to figure out how to fully utilize the values offered by this game-changing transformation.
The crisis has made it clear that there's a major importance of digital transformation in retail. The Gartner 2021 CIO Survey says that two-thirds of retail CIOs think their relationships with their CEOs have been improved since last year, as CIOs have helped in anchoring their businesses through substantial disruption.This time, leveraging on the benefits of digital transformation in retail will be crucial to developing and maintaining the adaptability that has a huge demand today.
This blog will explore more on the growing role of digitization in the retail industry.
Many retailers shifted rapidly to the digital world over a few years and now find themselves working with outdated software and tools. These challenges are forcing today's modern retailers to emphasize discovering advanced features such as - AI, IoT, data analytics, and cyber security. Let's take a quick look at them - Is there 5 or is it 3? CX, Data, Cybersecurity?
CX: Retailers Look to Balance Customer Focus and Financial Objectives
While providing better customer satisfaction and CX is a primary focus for retailers this year, they release their tight grip over financial measures. While revenue targets and decreasing operational costs were still a priority in 2021, many retailers shifted their focus to customer experience and engagement, assuming this would support growth and efficiency measures.
Data, Analytics, AI, and IoT Can Help Bolster Competitive Advantage
Retailers strive to find better ways forIoT, data analytics, and AI to create direct channels between their brands and customers when it comes to digital transformation in retail. These promising technologies have a lot to offer in terms of serving customers better while creating value consistently. With cost pressures becoming higher, it is essential to have operational processes optimized. Here, IoT can help significantly being a process enabler and a cost saver.
Retail data analytics enables retailers to turn to their data rather than going with their instinct to make things right. Leveraging a combination of AI- and retail business analytics, teams can now learn more about customer behavior to modify the sales funnel and branding accordingly.
Cybersecurity: It is a Key Business Objective
Against this fast-changing retail landscape, brands are finding themselves to be unprepared for escalating cyber-attacks. Earlier, the industry has framed IT security as "checkbox compliance" with Payment Card Industry (PCI). Now, rapidly changing customer sentiment towards security breaches demand a stronger emphasis on safety.
There's a new focus to comply with HIPAA, PCI, SOX, and other privacy rules to make data protection critical. Brands can no longer afford to ignore the cyber threats and are slowly embracing new retail security and businesses approaches.
Benefits Of Digital Transformation in Retail Sector
There's fierce competition in the industry, and digital transformation in retail can provide both unique opportunities and challenges. Retail brands that look for better efficiencies and ROA (return on assets) can prosper even in disruption. Here, the benefits of digital transformation in retail are impossible to ignore. Let’s take a deep dive and know more about them -
Innovation Is the Key to Competitiveness
Necessity is the mother of invention. It is a pattern repeated throughout history - a massive disruption creates a market shift in behavior that innovation uses for launching new services and products. Consumers now can search, buy, and receive products in numerous ways. Shopping is no longer a chore; it gets done in a few clicks nowadays, making it a journey of discovery.
The 'one-size-fits-all' mantra is no longer an applicable survival strategy. Because it gets difficult for a customer to emotionally connect with store experiences that serve the unique needs of all consumers. The future of retail is channel-less. It is a significant ecosystem of physical and digital spaces extending beyond showcasing and selling services or products.
Buying has become an amalgamation of several elements, such as social interactions, learning experiences, and functional consumption.Constant innovation to improve customer experience and drive efficiency is key to a healthy and competitive retail organization, and digital transformation (DX) is increasingly driving that innovation.
It can get quite challenging to operate in a world where consumer behaviors and supply chains are turbulent and derailed. As the need for DX continues to accelerate, retailers are focusing on specific tools and technologies for operational improvement and customer-focused experiences to stay ahead of the curve.
For example, Endless Aisle is one of the major benefits of digital transformation in retail. This concepthas emerged as mobile, online, and in-store quickly blended. Endless Aisle is a virtual shelf that enables consumers to virtually browse or buy a range of products that are either unavailable in-store or out-of-stock and therefore can be shipped to their house or nearby store for pick up.
To improve operations within the company, cloud technologies can be helpful. Additionally, it will enable retail employees to respond to customer queries a lot faster which will improve customer experience.Moreover, the supply of real-time data helps in forecasting demand ahead of time and stock goods in advance.Icreon is providing solutions focused on digital and omnichannel growth for retailers in every area.
Digital transformation in retailhas a great impact on customer experiences and makes them better. There are several technical toolsavailable, and they canguide to increase the productivity of the retail employees and make services more optimal.While digital transformation is customer-focused, it also works to make your business better and stay ahead of the crowd.
Additionally, to accommodate evolving customer behavior and needs, a 360-degree customer profile can provide a single view of the consumer that enables all brand elements - starting from customer support to analytics to finance to marketing. This is especially useful for allowing the addition of new dimensions, data sources, and role-specific views.