Why does the Retail Industry Need Digital Transformation?

Digital used to be about coding and IT; now it’s becoming a people business.

Mary Kate Loftus

Many in the retail industry think digital transformation means replacing people with machines, but it’s the opposite. It’s about enhancing convenience and speeding up processes, from finding products to making payments.

Digital systems have made retail faster, more efficient, and less stressful. This shift extends beyond customer interactions to back-end operations like inventory management and delivery.

Before we discuss retail, here is a primer on how other industries have benefited from transformation.

Here's how:

• In healthcare, telemedicine and digital records have changed patient care. Doctors can now create personalized treatment plans using detailed patient data. Similarly, retailers use data to improve shopping experiences.
• In the travel industry, companies like Expedia and Airbnb have changed how people book trips. They use technology to provide personalized travel recommendations and make booking easier, just like retailers are improving customer support and interactions.
• Similar is the case with banking. Gone are the days of waiting in line to deposit a check or speaking with a manager to make a money transfer. Mobile banking apps and online platforms allow customers to manage their finances from anywhere without needing to go to their bank physically.
• The entertainment industry has similarly evolved. The days of renting VHS tapes from video stores are behind us, as platforms like Netflix and other over-the-top (OTT) providers offer personalized, on-demand viewing experiences that redefine how we consume media.

Today, consumers expect the same level of convenience and personalization from retailers. They want to shop seamlessly online, in-store, or through mobile apps.

Why do Retail Businesses Need Digital Transformation?

According to this report, digital transformation in retail is set to grow to $541.44 billion by 2029.

As consumers increasingly rely on technology for their shopping experiences, traditional retailers must evolve to meet these changing demands. But how will this evolution to digital transformation help the overall retail industry?

John Chambers, Former CEO of Cisco, warned that businesses that fail to adopt will perish: “At least 40% of all businesses will die in the next 10 years… if they don’t figure out how to change their entire company to accommodate new technologies.”

This is true for retail businesses, too, as almost every activity now has a digital component. Television and media have undergone a seismic shift since going digital.

Some of the ways digital transformation has impacted retail include:

Shopping Experiences

Gone are the days when each customer was treated the same way. With digital transformation, customers are now used to a more personalized approach.

Businesses can tailor recommendations, promotions, and marketing messages to individual preferences by leveraging data analytics and customer behavior tracking. This not only enhances customer satisfaction but also drives higher conversion rates.

Omnichannel Support

Remember how we would have to spend hours on a phone or trying to find the right person to get support? Not anymore! Today, a customer can reach the retail business via phone, chat, in-app communication, messaging, email, or even a direct call.

Digital transformation paves the way for retailers to offer a seamless omnichannel experience. This means that customers can effortlessly switch between channels, such as online and in-store, without encountering any disruptions. Features like click-and-collect, and consistent product availability further enhance this efficiency.

Customer Service

The most significant impact of digital transformation has been on customer support. With chatbots and virtual assistants, customers are now used to instant responses to their specific questions.

With huge advancements in AI and self-service options, such as FAQs or knowledge bases, customers can find answers on their own, reducing wait times and improving overall satisfaction.

If the query is more complex and cannot be resolved by AI or self-service, it can be easily transferred to live chat with an agent or phone support to offer a seamless customer journey.

Improved Operations

Digital transformation in retail is not just about customer-facing aspects; it's equally crucial for back-end operations.

Automation can streamline processes, reducing manual tasks and errors. For instance, automated inventory management systems can optimize stock levels, prevent stockouts, and improve order fulfillment.

Similarly, supply chain management can be enhanced with seamless visibility, ensuring transparency and efficiency. With technological advancements, retailers that have embraced these mechanisms are more operationally efficient, giving them a competitive edge over those still reliant on traditional methods.

Data-Driven Insights

Since customers are now used to more personalized and tailor-made experiences, data is the lifeblood even of the modern retail industry.

By collecting and analyzing customer and consumption data, businesses can gain valuable insights into demand and sales. This data can be used to optimize forecasts, promotions, pricing, inventory, and operations.

Stay Ahead of the Curve with Digital Technologies

As the retail landscape changes, businesses that fail to adapt risk falling behind. Following emerging technologies allows retailers to stand out and secure a lasting competitive edge.

Automation may seem daunting, but it's not just for large companies. No-code platforms, on the other hand, make it easy and affordable to automate processes without needing extensive budgets.

Unlike traditional transformation, which require huge budgets, personnel, and timelines, no-code platforms like Hubler can simplify complex challenges and catalyze digital transformation.