How Digital transformation in retail sector makes you different from your rivals?
Defining Digital transformation
Digital transformation is real and is here to stay! In fact, technology is now an inseparable part of all consumer-oriented industries and retail is no exception. Today’s consumer has become extremely demanding and seeks personalization, tailor-made solutions as well as seamless interaction across all possible channels. For the same reason, the 2017’s customers are called omni-shoppers as they are no more visiting the brick and mortar stores only, rather carrying retail in their pockets and shopping through smart devices. The changing habits of digital customers have forced the organizations to take a note and undergo digital transformation and look for different ways to engage different customers.
Key drivers of digital transformation in retail
Here are some key drivers that have propelled the digital transformation in retail industry:
- The growing expectations of omni-channel shoppers
- Various challenges all across the supply chain, which are not possible to digitize
- Completion faced from digital and rising costs
- Demand for having a personalized, relaxed, and seamless shopping experience
Causes and consequences of changing consumer behavior
Today’s shopper is not entirely digital! Do you know 90 percent of the retail sales take place within the stores? Also, more than two-thirds of consumers, who made online purchases, still indulge in store transactions. Knowing the figures, does it make sense to care about the digital behavior of a digital consumer? The answer is yes. This is because the ‘digital consumer’ essentially exhibits the ‘changing’ behavior of today’s consumer.
Why digital transformation is more tangible in retail?
Do you know 90 percent of the research prior to a purchase takes place online? At one point or the other, people use internet to either conduct a research or buy a product. Also, 90 percent of the people use smartphones while they are shopping in a store. Out of these, 54 percent perform price comparisons while in the store, while 48 percent check product information online. Around 2 percent even check online reviews about a specific product when in a store.
Challenges faced by companies with regard to digital transformation
The companies are startled with the growing expectations of a digital consumer. Here are such expectations, which have emerged as challenges for companies:
- No more waiting in queues to save time and inconvenience
- Personalized suggestions based on prior shopping patterns and thus saving their time and hastening decision making
- With integration of social media, the customer now wants more exposure, check product reviews online, and take informed decisions
- Desire to view real-time product information around them though interactive touch points
- Various mobile apps offer a seamless shopping experience and also reward points, which can also be redeemed. Consumers want flexibility and option to redeem reward points, compare products, find stores, and check online reviews.
Spending on R&D by top 10 retailers
The emerging demands of the consumers have triggered the need to develop new technologies to support these behaviors. As a result, the IT industry is under pressure to grow rapidly with regard to retail to match up with emerging trends. This has led to a significant rise in investments on R&D and technology. In fact, nearly 30% of retailers pointed out that their IT budget rose by 5% or more in past few years. Amazon claims to have spent approximately $14.2 billion on “technology and content.” Here is the data for R&D spending of top 10 retailers:
How can digital transformation be more innovative to consumers’ needs?
The good news is that there’s still a scope for retailers to be more innovative in order to catch and retain consumers’ attention. When asked about whether their favorite retailer is also a leading innovator, the highest any of the listed retailers could score is just 17 percent. Here, it’s important to mention that this survey was based on various innovation pointers such as store experience, in-store technology, store layout, delivery options. This simply indicates that there is a room for innovation and impeccable digital transformation for retailers in 2017.