In an attempt to respond to new shopper expectations, bridge physical and online shopping experiences, change the retail experience, improve the way back-office processes are handled, and more, retailers are putting technology to good use.
A number of chains have even opened concept stores to see how customers interact with certain technologies and services before making them available in more stores. It’s safe to assume that the retail industry is among those impacted by digital business transformation to the greatest extent. There are several reasons for this and several ways the industry is transforming, which we’ll explore in the present article.
Reasons for Digital Transformation in the Retail Industry
The main driver of digital transformation in retail is that 90 percent of shoppers use their smartphones in stores. There is a need to combine digital and physical with in-store experiences as an important element. In consumers’ minds, the borders between the digital and the physical have almost disappeared. You can read more about it here.
This process is facilitated by immersive experiences in virtual and augmented reality and the Internet of Things. Challenges on the supply chain level involve lack of sufficient digitalization, and time, speed, and a transparent view are crucial. Another factor includes rising cost pressure and competition from digital and overall customer experience leaders.
There are quite a few ways to reduce costs thanks to new digital possibilities on the level of digitization and supply chain. The opportunities and impact in areas such as new tech, data-driven optimization and marketing, and staff empowerment also drive transformation.
Shoppers are looking for a personalized experience more and more often, and this is not easy to achieve because it is context-dependent, ranging from the need to find and purchase items fast to the exact opposite – an immersive, relaxed shopping experience with digital technologies available in every area and used for music, smart displays, and even things like ambiance.
The study of analytics is key to understanding how your customers think. Information like customer traffic and demographics allows businesses to make more intelligent decisions based on customer details, as well as to personalize the customer experience. For example, Samsung created a pop-up shop that can share data with small and medium-sized businesses in real time. Samsung has always been a tech pioneer, so that doesn’t surprise us.
Digital marketing has become more important than ever for retailers who want to connect with shoppers because customers are glued to internet-enabled devices. Whether it’s virtual storytelling, digital coupons, increased ads, or emails, the race is on to up the digital marketing game. Digital marketing has become the top area for new spending in business according to Gartner’s 2018 CIO Agenda: Retail Industry Insights.
Omnichannel commerce is a multichannel approach to shopping that wants to make the shopping experience more seamless across online and in-person channels. TechRepublic reports that Walmart is jumping the omnichannel bandwagon with its order-by-text service, which allows customers to order items by sending a text message. This is the epitome of convenience.
Neiman Marcus’ Snap Find Shop app is another example. With this app, customers can take a picture of a product in the store and look for it or something similar to it online.
The popularity that voice activation AI has gained in the retail space is undeniable, whether it’s asking Siri to search for an item online or telling your Google Home to buy you things. Voice activation is now beneficial even to retail employees. They can communicate via voice-controlled wearables throughout a store with some new apps.
This is the broader concept of the above example of a way technology is transforming retail. AI is customizing and automating the retail experience in an effort to make shopping easier for the consumer. Deloitte reports that more than 33% of major brand leaders are using AI to better their businesses.
The development of cashier-less stores is one major AI movement. There is a fully-automated grocery store in Seattle, USA called Amazon Go, which has eliminated checkout lines and cashiers completely. Amazon Go plans to open two more stores – in Chicago and San Francisco, reports Tech Republic.
Virtual Reality (VR)
Virtual reality is transforming the business side of the retail experience according to Forbes. VR is helpful for redesigning and visualizing stores and checking how different layouts will look without having to change the store physically. VR is used by some retailers to plan store organization that is most logical and convenient for the consumer’s preferences.
Inventory tracking, shipping details, stock availability, and orders are all moving to the cloud. Retailers can cut the cost of software development and process data at a much faster rate with cloud computing. A pioneer in this direction is Hallmark Cards, who are using the cloud as a service solution that enables employees check inventory, orders, stock availability, and shipping details in real time.
Sensor data is revolutionizing the traditional retail space. Beacons have become the most popular vessel of sensor data. Big companies strategically place small beacon sensors around their venues, which connect to customers’ phones if they have enabled Bluetooth, and the retail app is installed.
With this type of connectivity, a retailer can see how long a customer spends in their store and what they get and offer personalized discounts based on this data.
One example is Sephora, a brand that uses beacons to offer customers promotions and a map of the store.
Augmented reality (AR)
Augmented reality is transforming the shopping experience. It is making it possible for consumers to try on clothes or test products virtually. Sephora has a mobile app that lets users sample makeup in real time.
Last but not least, facial recognition technology can help businesses understand customer preferences better. According to Forbes, this technology can determine customer demographics, track where customers move within stores, and even thwart theft.
These are just some of the ways tech is changing retail. Thank you for reading!