How Digitization Grows in the Retail Industry?
Customer experience that is personalised and exciting with the help of technology disruptions has allowed the retail industry to adjust to the abrupt changes in the marketplace.
The brick-and-mortar concept that was once a common purchasing among consumers has evolved rapidly over time to hybrid experiences. With the growth of the mobile market, e-commerce and the introduction of new technology and business models for the consumer is crucial to propel the digital age. The race is on towards digital intimacy in order to remain ahead in the rapidly changing retail industry. In this world of constant customer interaction the trend of shifting from traditional store formats towards digital platforms is greatly expanding the scope of interactions, increasing sales and engagement. Digital merchandising and demand sensing constant replenishments, and manufacturers’ online operating platforms are helping to accelerate their progress and stay ahead of the market. Furthermore, traditional retail labels have adopted multichannel strategies that influence the customer’s purchasing habits to help sustain their company in the evolving market.
What is Digital Transformation in the Retail Industry?
Digital transformation isn’t something new in any industry, as every sector is going digital in order to enhance their facilities and services in order to remain ahead of the trend. In the retail sector digital transformation can be described as driving omnichannel experience that meets the demands of the consumer and expectations by reducing attention spans, immediate gratification, personal push notifications, tailored recommendations by anticipating market trends, strategically-planned analysis, local-based marketing, and anticipatory delivery for convenience in fulfilment, with a complete analysis of consumer behaviour. All of this, along with the necessity to come up with creative ways to generate revenues and develop innovative business models are reasons to incorporate new technologies into the digital transformation process for the enterprise. Data-driven AI provides insights and enables decisions. It’s about looking beyond minor improvements, which is where the creation of engaging facilities with AI technology can be brought up to forefront.
Digital transformation is the use in data-driven intelligence focusing on customer-centricity, being agile, creating new value propositions and being creative. It is important to remember that it’s also about reducing costs by streamlining processes and increasing efficiency. Technologies like big data and intelligent algorithms, analytics mobile applications and services that are based on location and the internet of things and blockchain have led to a dramatic transformation. Every aspect of business like procurement and strategic sourcing logistics, supply chain and employee management, as well as training and customer experience management is crucial helping retailers improve their profit and keep pace with the demand.
Challenges in the Transformation of the Retail Industry
As a multitude of options are available to the customer prior to making a purchase and transforming consumer behaviour thanks to the rapid expansion of eCommerce. The year before, Indian orders made through e-commerce increased 36 percent in health and personal health. However, Indian online shopping experiences an increase of 27% and is predicted to hit $99 billion in 2024. The typical behaviour of customers is to search for products whether online and offline. A variety of factors are involved like cost availability, ease of use and, most importantly, brand/product recall. Corporate companies do not just have to compete for attention in the marketplace, but also ensure that their customers are interested in their services and products.
Moving into cloud or online is no longer an option for businesses. However, establishing a strong technology base will allow you to keep track of order, inventory, product customers, and customers or an scalable structure to accommodate the rapid changes that occur in business. A complicated software platform could lead to an increase in cost. Thus, constant software development and coming up with customized, creative solutions can keep your company on alert
Changes in Customer Expectations as mentioned previously by customers are the most important thing. Therefore, retailers must keep up with the rapid shifts in what consumers desire and anticipate that can be challenging in the event of a change in the way they shop and seasonal shifts. This is where Analytics comes to the rescue. Through the use of Analytics, retailers can comprehend the needs and requirements of their customers and develop solutions to meet their needs.
The Management of the Supply Chain:
As a result of the pandemic, the company was forced to reconsider the delivery model and supply chain to meet the needs of customers. It is crucial that retailers monitor their supply chain to ensure the items are not defective and that they are always in motion to reduce cycle time.
What are the latest Digital Retail Trends?
The increase in internet and social media usersProvided the profound connection between the economic prosperity and internet accessibility connecting trillions and billions of internet users to the world-wide web is among the most significant and most significant opportunities for the retail sector. The growing trend of accessing the internet with wireless devices that are powered by technology such as 4G, 3G and Wi-Fi for public use is putting mobility at the heart of the next major revolution in retail business.
The rising number of smartphone owners and the increasing usage of online shopping.
The statistics on the use of smartphones show that on average, people spend more than two an hour and 51 mins a day using their phones. 51% of people use their mobiles at least once per hour and 22% check their phones at least every couple of minutes. There are more than 2.71 billion people around the world who use smartphones and it is anticipated that mobile phone owners around the world will rise to 7.33 billion in 2023.With the growing use mobile phones are anticipated to boost the growth of mobile commerce within the retail sector.
The Fourth Industrial Revolution, also known as Industry 4.0, is defined by new technologies that blur the boundaries between the physical and digital worlds. In conjunction with powerful analytics tools such as predictive analysis, scenario analysis algorithm and visualisation, the availability of data has transformed how companies perform.Companies can now gather huge amounts of data from their physical assets and facilities in real time, and execute sophisticated analytics to gain new insights and make more efficient decisions. Digital revolution is changing the way products are made, created and distributed to consumers. This has huge implications for the value chain.
Let’s talk about the latest ways to use technology to aid in the digital transformation of retail.
What technologies can aid in the digital transformation in the retail industry?
The retail market is becoming increasingly competitive with every passing day, there has never been more important than the capability to improve business processes while making sure that you meet the needs of your customers.
Data analytics is currently being used throughout the retail process tracking the latest products as well as forecasting sales and forecasting the future demand.
Analytics can also be used to optimize the placement of products and offers via the mapping of customers’ heat. Through analytics, those who are interested in particular items based on their previous purchases are identified quickly and efficiently. This helps to determine the best way to deal with those customers by focusing marketing campaigns. This is the area that data analytics focuses on.
Below are some of the areas that are strategic for retailers to identify ways that data analytics can be used to increase revenue and bring growth for their businesses.
Predict future performance
It’s also one of the major areas to consider when looking into data analytics for retail firms, as each customer interaction has a major impact on existing and possible relationships. Making a decision without fully understanding it could be risky since making a mistake could result in a long or a swift loss.
Retailers can forecast the future performance of several products based on their customers’ interests and their preferences.
Data analytics play a vital function in optimizing prices. By using different analytics algorithms allow you to carry out a range of tasks, such as keeping track of inventory levels, monitoring the demand and responding to market issues immediately and automatically, as well as monitoring the actions in the activities of competitors.With the ability to optimize prices, it’s now an option for merchants to know the best time to lower or increase prices. Prior to the introduction of analytics the retail industry would reduce prices when a selling season ended for a particular item.
In the same way the analytics suggests that a gradual decline in price as demand decreases will result in a rise in revenues. In the US Retail Stage Stores used an approach that was predictive and conducted several experiments to find out the change and increase in demand for certain products.
Walmarts, one of the largest retailers, invests millions of dollars in real-time systems that create the world’s most extensive private cloud . It is used to keep track of millions of transactions, and to optimize the pricing of all their products.
If retailers are able to understand the nature of the buying habits of their customers and patterns, they target regions that are likely to have significant demand. This includes collecting demographic data, economic and occasion-based variables to build a clear picture of purchasing behaviour within the target market. It assists in efficiently managing the inventory.
Through data analytics tools retailers can gain an understanding of present trends in their business. Data analytics algorithms are able to predict future trends based on purchasing data. Trends forecasted by the algorithm reveal what must be promoted in order to increase income and what doesn’t require promotion.
Identifying the best return from investments
By using data-driven intelligence and predictive risk filtering, retailers can gain a deeper understanding of their current and potential customers. This can assist them in calculating the expected response to marketing campaigns in relation to the way they are evaluated by the likelihood of them to purchase or purchase.
It is essential to identify customers in data analytics since it assists in deciding the types of customers who are likely to favour a certain product. Because of this, the majority of retailers rely on the recommendation engine technology as well as data collected through transactions and online as well as offline loyalty programs.
The use of data analytics can be a strategic strategy that allows retailers to use previous data to predict future sales growth through analyzing patterns in customer behaviour. It can help retailers remain ahead of the competition and increase their market share.
2. Artificial Intelligence (AI)
Artificial Intelligence is currently being used in retail in innovative ways throughout the entire product and service cycle from the beginning of construction to customer service after the sale. As a retailer you’ll require answers to these essential questions:
What are retailers doing with AI technology in order to keep ahead of the competition?
Which AI applications could automate and improve the process of retail?
What kinds of innovations are thought of as likely game changers in the coming decade?
IBM conducted a survey of 1900 retail and consumer product firms across 23 countries, of which 85percent of retailers plan to incorporate intelligent automation into the supply chain in 2021. Retailers believe that the implementation of AI could lead to 10% increase in sales per year.
Let’s look at the ways in which AI has contributed to the digital transformation in the retail industry.
Better Customer Service
AI could revolutionize the retail industry through websites that assist retailers in promoting their products and services based on the customers’ behaviour and purchasing history. It is crucial to recognize that a seamless customer experience can assist in running a successful business.
AI can make customer service more efficient and more efficient by studying customer information and their behaviour. Online stores also benefit from the power of AI in various ways. What happens if you go to the store and meet an AI-friendly robot, instead of the salesperson. Customers are able to ask whatever questions they like from the robot instead of speaking to a salesperson. It will have the least interaction with humans which means there is no chance of spreading infection after the COVID-19 outbreak.
Additionally, AI-enabled robots can collect data and examine it to discover the preferences of customers and anticipate future sales. For instance when a client wants to find a moisturizer, they may request your robot’s suggestions based on their skin type. Thus, the user experience is more interactive for customers.
Better Data Accumulation
AI helps retailers gather a vast amount of data about customers. Through the collection of information, AI can help create an individual shopping experience for customers through making conclusions. If you have customer’s data, you’ll be able to determine what they enjoy most most.It assists in creating an engaging experience for the user according to their interests and preferences. Additionally, retailers can predict the way a product is likely to be successful on the market, based on taking the lessons learned from previous experiences.
Virtual Trial Rooms
If you are shopping for an outfit, experimenting with different outfits can be tedious and very difficult. By using virtual rooms that have digital mirrors shoppers can try on dresses without having to switch them again.With the use of a gesture-based and touch-based interface, shoppers are able to mix and match various styles, outfits, and accessories in order to pick the ultimate look and then decide what they want to purchase. This reduces the amount of time customers spend on buying choices.
Behavioural Analytics using AI-enabled Surveillance
With modern surveillance equipment that is powered by AI and CV technology Retailers can record and study customer behaviour inside stores. They will get a better understanding of the customer satisfaction levels and the layout of their stores and improve operations to increase revenues.Video analytics can also improve the security of stores and decrease the likelihood of theft. By using AI surveillance data, the store can be managed in real time and notification can be delivered to the store’s owners and managers to prompt actions.
Chatbots for Customer Support
Chatbots that are AI-powered allow retailers to connect with consumers. By using chatbots, retail businesses can handle thousands of inquiries in a single day without requiring a massive workforce.Chatbots are created to respond to questions, offer instant support and offer shopping suggestions. Through a blend of AI chatbots as well as human beings retailers can manage their customers efficiently and provide them with the right solution to their issue.
If customers receive quick and attentive service and are treated with respect, they become involved with the brand in a deep way which increases customer loyalty.
The examples above aren’t just a dream and many retailers have already begun to play with these new technologies. AI is set to rule the retail industry, making brands more customer-focused in their retail operations.
The retail sector is experiencing an accelerated transformation due to the introduction of technology known as the Internet of Things. It’s poised to increase sales, improve customer loyalty, offer customers a more personalized experience, and boost the management of inventory. In the past 20 years, the traditional retail industry has changed dramatically and has provided companies with the opportunity to analyze and collect data , and then target different channels.
Here’s how IoT can help in digital transformation in retail industry
Robots are able to significantly change the retail industry by delivering products without the need of employees. Recently, a number of nations including China along with the USA employed robots to offer unmanned goods delivery in the face of COVID-19. Many people praised their efforts to lower the risk of contracting the disease.
While it’s frightening to let a machine to act as your customer service rep It’s also a fantastic opportunity to reduce the pressure on your employees.
OSHbot Lowe’s latest robot employee, assists customers find certain items and gives information about promotions and inventory. Additionally, OSHbot answers in two languages, which include English as well as Spanish.
In the case of simple inventory tasks by completing simple inventory tasks, robotics free workers to concentrate on providing superior customer service.
Retail workers spend their time and energy typically devoted to tracking products to ensure that they aren’t in inventory and checking that they’re in their proper spot. With the help of IoT technology, the idea of smart shelves could be used to streamline both tasks and also identify thefts simultaneously.Smart shelves have Tags that are RFID, sensors for weight, and readers that scan items that are on display and stock shelves. By using smart shelves, you’ll be able to be aware that you are having fewer items on your shelves, or when the items are not put in the right place on a shelf.
Because each RFID tag is linked to the readers, the smart shelves are able to detect thefts in the store and save your money on security cameras as well as security staff.
You’ve probably noticed numerous times how long lines stop your customers from purchasing items. With IoT technology, it’s possible to establish an automated system that reads the tags on every item as customers leave the shop. An IoT-enabled checkout system would tally the items up and deduct money from the customer’s digital payment app automatically.Developing an automated checkout system with IoT devices would make your consumers happier and they will be willing again and again to enter your store. According to McKinsey the automated checkout system will reduce the need for cashiers by as much as 75%..
Optimization of layouts in stores
It is possible to be shocked to find out that your store’s layout is not designed to meet your customers’ needs. The store may have the most popular items in the front , or your customers may require more room between couches at the back.By using analytics software that incorporates infrared sensors, you could make use of IoT technology to improve the layout of your store. This is why IoT will help you improve the layout of your store.
How to start Digital transformation in Retail ?
Digital transformation in the retail industry might sound exciting and is a reality after reading about the technologies mentioned above and the applications it has in the retail industry. The question is how do you get started.
As an entrepreneur, you are required to develop a digital transformation plan in place that is able to meet the ever-changing requirements of the consumer and market.
The most efficient and quickest way to begin and finish the digital transformation of retail is to identify the ideal partner. A partner who has the technical knowledge and industry expertise will assist you in changing your business from the inside out.
Our team is highly experienced with business analysis, IoT support, data-driven insights , and collaboration with users. If you have any idea or project thoughts in your head but are seeking expert knowledge in technology, contact our team of experts and we’ll guide you through the process of digital transformation within the retail sector.