In this digital era where technology is moving at a rapid pace, retail enterprises have understood the need to streamline their existing business models. It is equally important that companies make investments on appropriate technologies.
Customer delight is crucial for retailers and personalization plays a major role in meeting customer demands. To run a profitable multi-channel retail business, retailers have to implement the following technology trends:
- Data Analytics
Recently Gartner and Retail Info Systems conducted a joint study where they found out that a specific group of retail leaders achieved a revenue increase of above 5 percent. They were the retailers that identified data analytics as their key strategies.
Unlike traditional data management methods that are slow, not flexible to changes and expensive to manage, data analytics proved itself better. With analytics, data is combined from external sources to internal data. This data is then made available in raw format that gets further analyzed by data scientists to derive critical insights.
Available in its analytical form, this data finds use in businesses and other industry verticals for sales, marketing, management, operations, finance operations, supply chain and much more.
For retailers, they must have access to this important data. It is proved by now that the adopters of data analytics and other new retail entrants are thriving with the maximized use of data analysis techniques with technology-driven business models.
Why is implementing Data Analytics Important:
Implementing data analytics is crucial as it makes customer behavior easier to understand.
For instance, understanding a customer’s behavior online, his/her buying and selling decisions, demographic information, the pages where the customer spends more time, etc is important for targeting the right customer base.
- Artificial Intelligence and Internet of Things
According to Plunkett Research, retail industry sales are estimated to be $5.73 trillion. Retail executives trust that implementing Artificial Intelligence techniques such as cognitive computing will increase sales in the retail industry and also improve customer experience significantly.
For instance, Amazon shipped over 5 billion products with their Prime membership and $17.8 billion was spent during a one-day sale by Alibaba. All this points to customer personalization.
Using chatbots to automate responses for customers, machine learning, gesture recognition, etc are all artificially intelligent ways of transforming the retail sector. In addition to these is the rise of cashier-less stores. An example is Amazon Go, a cashier-less store at Seattle.
- Augmented Reality and Virtual Reality
According to the Goldman Sachs forecasts, the AR and VR markets will touch $1.6 billion by the year 2025. In addition to Artificial Intelligence and the Internet Of Things, retailers also invest in AR and VR technologies for digitally transforming their business.
With AR and VR technology, customers find shopping easier and interactive. It offers them a virtual experience. For instance, Facebook uses applications that make use of Augmented Reality and a built-in camera to create a virtual experience.
Enabling Virtual browsing helps customers choose from the lot. These technologies create versatile brand experiences and also drive conversions by increasing page visits thereby increasing revenue.
Digital Transformation in The Retail Sector: Key Areas Redefined
In the retail industry, the product is the focal point. Everything else revolves around the products. With digital transformation, the importance is being shifted more to core customer experience and personalization.
Digital transformation solution depends significantly on two critical factors. These are the possession of products and the transfer of ownership. These two factors are critical for retail business success.
The following are the key domains which require a redefinition in the retail industry:
- Customer Experience via the Omni-Channel Approach
Customer expectations keep changing every single day. Omnichannel retail is performed to provide customers with a seamless experience via multiple online channels.
For instance, Walmart has an ‘order by text’ solution where they provide their customers with an option to order products via text messages. This has proved to be convenient and easy for customers. Additionally, it improves customer engagement and in turn boosts the sales.
Another advantage of the multi-channel approach lies in solving the problems in the check-out lines. Artificial intelligence solutions help customers avoid long queues and check-out lines.
- Inventory Management Solution with Cloud Technology
Managing stocks is the most important function in retail industries. Digital transformation makes the whole process transparent and efficient. In retail, it turns out that cloud technologies have made a significant leap and is thus being rapidly adopted in the industry.
MarketResearch.com in one of their reports identifies that the retail cloud market is estimated to grow around 28.53 billion USD by 2021.
A cloud-based inventory management solution helps a retailer manage stocks efficiently and in real-time. It also allows proper tracking of products from warehouses to various store locations. The client can now procure their products without any hassles and avoid extra overheads such as warehouse and storage expenses etc.
A case in point is Shopify, an e-commerce major that has partnered with Google Cloud to provide a seamless shopping experience to both its merchants and customers. A proper inventory management solution deployed with cloud technology can thus improve customer experience and thereby increase sales.
- Transforming the Supply Chain in Retail Industries
In today’s era of connected technologies and devices, customer demand and preferences are changing constantly. For the retail sector to keep up with the digital transformation, customer loyalty needs to be sustained.
Business cycles and process times need to be significantly reduced to meet with customer expectations. A robust infrastructure is yet another prerequisite. This is because when products go out-of-stock, retailers tend to lose their customer’s trust.
Retail industries can solve this issue by investing in digital transformation strategies. This will help in shortening business cycles, streamline deliveries and meet with customer demands.
Real-time visibility into operations, automated data keying, and improved collaboration are other benefits that can be leveraged out of transforming your retail sector digitally.
- Product Development According to Customer Preferences
Retailers are always expected to meet their customer’s needs. Internet of Things and sensors have made it simple for customers to shop according to their preferences. Retailers need to take into account previous customer behavior online, preferences, etc in addition to replenishing the inventory for the next line of customers.
The advent of Big Data, delivery drones, cloud computing, smart robots, artificial intelligence and the Internet of things have provided retailers the ability to leverage the benefits of these technologies to deliver an improved customer experience.
Intense personalization at all possible communication points helps retailers identify and learn about customer preferences, pricing strategies and different product recommendations of each customer.