How Digital Transformation is Driving Retail Customer Experience


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Digital transformation is the strategic adoption of various digital technologies, used for improving processes, productivity, enhancing customer care, improving employee experience, managing business risks and helping control costs. It is used to represent various tools, solutions and processes for developing customized, effective digital strategies for different organizations, and is essential for an organization to stay competitive in the modern business landscape.

Digital transformation in retail can include a range of business opportunities that can focus on multiple technologies and strategies. It refers to the creation of new and innovative business models that can take advantage of the digital technologies to pursue new and improved revenue streams and new business models.

Some Digital Transformation Stats

  • A report suggests that 63% of retailers expect to spend more on business intelligence and data analytics and 35% on artificial intelligence.
  • A study has found that 70.7% of retailers agree on digital transformation being an essential part of retail strategy.
  • The global spending on digital transformation is expected to reach USD 6.8 trillion by 2023.
  • The Covid-19 pandemic sped up the digital transformation efforts by 97%.
Photo by Luis Benito on Unsplash

Role of Digital Transformation in Enhancing Customer Experience

Consumers have more choices today than ever before, increasing the stakes for businesses to deliver innovative products and services along with meaningful experiences and interactions. Meaningful experiences and interactions get translated into happy customers and brand loyalties.

Customers prefer an ongoing relationship over isolated transactions, and a personalized and emotional connection is bound to increase customer loyalty and increased business.

Digital transformation is helping bring costumes closer by offering real time services, seamless omnichannel experience and consistent online availability.

Examples of Successful Digital Transformation

Digital transformation and stories of its successful implementation can be seen in many industries.

Netflix is one of the well-known examples of digital transformation success stories. Netflix’s biggest competitor, Blockbuster, was not prepared for Netflix’s digital transformation. It took Blockbuster seven years to establish its own DVD-by-mail service, during which Netflix had already started offering digital streaming. The speed with which Netflix could offer the digital solution to its customers was the key to the company’s lasting success.

Retail brands like Walmart and Target have embraced digital transformation to extend their reach and to compete with one of the giants of digital revolution, Amazon. Both Walmart and Target were able to take advantage of and leverage their existing brick-and-mortar stores as ready to use pickup and shipping points for customers. These brands now operate huge e-commerce operations that supplement their in-store business and also help in extending their business reach into areas with less competition.

Educational institutions like Indiana University, are also digitally transforming to offer flexible learning experiences. Indiana University has replaced its legacy computer labs with a modern virtual environment, using which students have access to its educational apps from anywhere.

Businesses are looking to increase business and boost revenue by reimagining customer interactions and digital transformation is the key to driving it.

Digital Transformation Trends in Retail

  1. Providing a seamless experience – Omnichannel retail strategy is now a must-have for businesses to survive. Connecting both offline and online channels helps engage customers at all the touchpoints in their retail purchase journey, helping create a seamless shopping experience.
    • In-app rewards – Mobile apps help promote special offers and earn loyalty points with in-app or in-store purchases which can be redeemed. Such personalized experiences help increase customer loyalty.
    • Linking purchases – Linking in-app or in-store purchases to a customer’s account enables businesses to give personalized offers, recommending products based on previous purchases.
  2. Convenience – Omnichannel shopping provides a big opportunity for businesses to know their customers. Customer browsing, wishlist, purchases and more generate data that can be used to understand customer preferences using AI and data analytics. These insights can be streamlined and used to guide customer purchases and offer more personalized customer experiences.
    • Chatbots – AI chatbots can help transform the way in which retailers communicate with customers by providing services across multiple channels 24/7.
    • Cashier-less stores – AI technology is being used to streamline and automate the in-store experience. Cashier-less stores using AI, IoT and more can electronically track and register purchases made by customers and charge their associated account automatically on exit.
  3. Personalization – AI and IoT can be used to provide personalized services by collecting data based on customer’s shopping habits, their interests and much more and applying this knowledge base to offer and drive personalized buying experiences.
    • Radio Frequency Identification tags (RFID) – Besides security, RFID tags can be used to offer personalized services by providing relevant information and recommendations to the customer on their mobile devices.
    • Internet of Things (IoT) – Installation of sensors within the stores and spaces helps stores ping customers mobile devices regarding discounts available within the store. Beacons can also be used to send notifications to mobile devices regarding events, discounts, reminders and more to attract and create brand loyalty.
    • Augmented Reality (AR) – AR helps customers experience store-like experiences and interact with 3D visual representation of various products, like trying on clothes, in the comfort of their homes.
    • In-store Virtual Reality (VR) – VR enhances customers in-store experiences by letting their avatars try on different products and can draw customers back to having an in-store experience. This technology enables customers to explore products in different ways and helps overcome potential to purchase.

In conclusion, digital transformation is helping take retail experience to the next level by embracing new technologies. A digital transformation strategy is an essential part to drive retail customer experience. Having a clear idea about customer requirements and developing an effective roadmap to deliver an enhanced customer experience can go a long way for a retail business. Connecting with a custom retail development services company can help retailers elevate their retail in-store as well as online business.

Mrunal Chokshi
Mrunal has been actively involved in Internet marketing for more than 10 years. His knowledge and experience motivates him regularly in contributing through writing on technology topics.


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