Why Do You Need Digital Transformation In Retail?
Digital Transformation in Retail is the key to the future. Many businesses have been adversely affected by the pandemic. One of the worst impacted industries in the retail industry, particularly traditional retailers.
Many businesses have experienced huge losses as a result of falling retail demand. This is not because people can’t buy due to the financial crisis; it is also because they aren’t able to access information.
This problem can only be solved by digital transformation in retail.
Many companies have already begun to move in this direction. As a result, many of the existing trends in retail digital transformation are on the rise.
Digital Transformation Strategy refers to more than just technology in retail. Technology is certainly the key driver. However, factors such as business processes, business models, and other innovative ways are equally important to the success of any retail transformation efforts.
The aim is to reach consumers through digital channels and to be just as effective as traditional offline channels. By delivering the desired product or service in the most convenient way, the digital transformation of retail can help increase customer retention.
Retail embracing IoT technology
The IoT is taking off as different industries embrace the technology for greater efficiency and higher performance. Gartner reports that 600+ million devices have been deployed by Utilities and Manufacturing as the two leading sectors in IoT. However, the number of devices being deployed in retail is growing rapidly and the retail sector is following closely.
Retailers are looking to increase their efficiency and improve customer service. IoT devices are increasingly being used in operations. There is an increasing number of devices, which means more data. As data volumes soar, retailers will need to segregate and analyze this data in order to better understand their customers and implement smarter retail initiatives. Juniper Research has reported that retailers will spend $20 billion on IoT devices by 2020. This indicates what we could call “the increased dependence of connected devices for enhanced business goals.”
Why a retailer needs to monitor the impact its shopper insights programs
Big Data fast data and the data flood are taking over the world of digital business, especially those that are customer-focused.
Retail is no exception. Customers leave digital footprints for every interaction, transaction, and engagement at every retail touchpoint, online, offline, on social media channels, and in-store, as well as with their contact center contacts.
The technology allows businesses to gather data about shoppers from these touchpoints, analyze it, and derive insights that will help them make informed decisions.
But, it is difficult to keep up with the volume, variety, velocity, and speed of this shopper data. Retailers are making huge efforts to make sense of it and extract insights to help them stay ahead of their competition.
Retail CXOs require a way to measure and report the impact of their investments and ‘Insights initiatives.
Let’s look at an example. One of the most popular Insights initiatives that Tier 1 and 2 retailers have invested in is Personalisation. This involves delivering product recommendations to customers to increase cross-sell/upsell.
This is difficult to do as it is hard to see the entire customer from one central location. It is based upon the multiple footprints that the customer left with the retailer brand.
It is not an easy task to collect, normalize, and standardise customer data from multiple sources like clickstream, PoS transactions and social channels. You can also create 360-degree profile views.
It is more difficult than expected to emerge from these ground-level problems and begin deriving insights and analytics capabilities.
The key to navigating this complex landscape is tracking and measuring the impact of these actionable insights. These can be used for operational efficiency improvement or sales enhancement through better conversions.
Why should retailers monitor and measure the success of their shopper insights programs?
It can help improve profitability. And because it’s easy to measure what’s happening! There are significant benefits to measuring and monitoring the impact of data driven initiatives on company-specific metrics, such as gross profit and revenue.
RetailWire, an industry think tank, discovered that there was a direct link between monitoring the impact on shopper insights (ROI), and positive return of investment (ROI) in a March 2014 survey of 350 retailers.
Companies that measured the impact of shopper insight on their standard metrics showed positive ROI as compared to those that did not.
Nearly two-thirds (64%) of respondents to the survey did not perform any monitoring despite survey results showing that monitoring produces positive results. The positive ROI reported by 69% of the monitoring companies was higher than that of 28% who did not. Three key areas should be monitored by retailers to ensure better control of their insights investments.
1. Analytics Operations Health: The following is a typical flow of Analytics Operations.
Data Aggregation, Data Profiling, Data Ingestion, Data Processing in Analytics Core Engine -> Outputs
Outputs could be in the shape of
a. Information that is consumed by business users: ‘People who added product B to their carts but did not checkout.
b. A useful insight that is delivered to customer channels and on business applications. This could include product recommendations, which are delivered via the website.
The Mile of Drift After Covid.
1. The Internet is the First Place Consumers Go
The 3G rollout has influenced consumer behavior. With the pandemic, consumers are now using the internet to access products, services, and goods that they otherwise wouldn’t be able to buy in a physical shop.
Google services reported that 24% of US consumers went online to shop for goods and products they would not normally buy in-store. However, 87% said they would give it another try.
This indicates that most consumers are either already online, or are planning to do so.
If a retail company doesn’t have an online presence yet, it is a smart move to create one. A website or an app can help you create an online presence. This will allow consumers to purchase your product or view it in detail.
2. Omnichannel Experience
According to a study, 33.4% of traditional retailers are now selling their products online.
Many of these retailers have adopted the hybrid approach, where they create a seamless customer experience. The buyer will have the same experience whether they visit the store in person or online.
This is where you need to step up as Google recently conducted a study that found that people are increasingly using multiple devices at their homes. As a result, they spend 20% more time browsing websites and Apps.
3. Digital and Cloud Infrastructure
A company’s website is now the primary online store. There are more than 284,000,000 internet users in America alone.
It is possible for consumers to buy your product through an online store. If not, their chances of researching your product are higher.
People are constantly searching for information about where, when, and how to buy the goods they desire. Nearly 60% of US and Canadian shoppers search for “What’s available near me”.
4. Changes in Employee Roles
In order to make the internet a viable option for consumers, companies often invest internally in new software and applications.
However, new software presents new challenges. It can be difficult to train your employees in new software and processes.
A Way Ahead
COVID has yet to reveal its true impact. There is still much to learn. Numerous companies have been forced to close their doors and gone bankrupt. However, there were some that survived and a few that prospered.
The industry is constantly changing, and it’s not easy to adapt. One thing is certain: being digitally ready is the key to sustainable
Digital transformation is the key to success in retail. This change must be embraced by businesses, which should adopt the most recent digital trends to meet the challenges of the 21st century.
Let’s be open-minded and flexible in our approach to this challenge.
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