Why Digital Transformation in Retailing
2020 witness the unexpected events which have never been forecasted or have ever been imagined by anyone. A lot of business are struck seriously, many retailing stores are lock down. However, this is also the chance for the outburst of online sales or for the businesses which have thorough preparation for digital transformation in retail. Basically, while COV-19 pandemic is the unexpected thing that deter business from operating, these key trends have been known at least two years ago and are forecasted to be the trend in at least 5 upcoming years. So why don’t you look at these key trends to prepare everything from now on?
1. Shift from supply chain-central business model to customer- central model
Instead of focusing only on providing the right product with the right quantity to customers and plan the purchase order carefully to work with suppliers, retailers today have to focus on leveraging customer experience more than ever. And to serve each customer with the best experience, personalization holds the key to customer loyalty and retention for retailers today. With no geographical limits on the brands and products they can access, consumers place great emphasis on convenience, value and personalization when making their purchase decisions.
The following are some of the leading trends in in-store personalization:
- Leveraging Click and Collect to Cross-sell and Up-sell: Monsoon, a leading retailer of accessories in the U.K., realized that 60 percent of their customers opt to visit the store to collect online orders and 30 percent of them then make additional purchases while collecting the same. Plus, during COV-19, many clients also want to buy online and pick up in store in case the shipping fee is high and they don’t want to wait in line to buy the product and get checkout. And retailers are now using beacons to alert store staff when an online customer approaches the store to pick up the order, the staffs can quickly handling over the order to avoid delay and they also have chance of recommending other products to customer based on their purchase history (up-sell or cross-sell)
- Deploying Smart Tools to Enhance Customer Experience: Radio Frequency Identification (RFID)-enabled smart shelves can track demographic info along with product details that interest customers and display relatable discounts at nearby screens. Also, intelligent fitting rooms can read RFID tags to recognize the clothing that a customer has taken to the fitting rooms and help the floor staff find alternate sizes and accessories to complement the merchandize
- Adopting Location-based Marketing: Beacons, which are low-energy Bluetooth-enabled devices, allow retailers to locate consumers within a 50-meter radius of the store and engage with them through personalized pull messaging. The technology helps re-define customer engagement through customized, location-based notifications. These notifications can be intimations on the availability of out of stock merchandize or offers on items in a customer’s browsing history.
2. Enhance customer experience by the advanced technology such as Virtual Reality (VR), Augmented Reality (AR), Face recognition and Voice recognition
Virtual reality: With almost six million units of VR devices expected to be sold by the end of 2019, more and more people will have access to virtual reality experiences. A typical example is IKEA: they created an interactive showroom that uses the immersive power of virtual reality to offer an innovative 3D product experience. With new ways of exploration and visualization, customers can bring IKEA rooms to life – opening their mind and home to new possibilities.
Face recognition: Retailers can easily recognize and track who is shopping in their online stores, but this knowledge often goes out the window when a customer walks into a brick-and-mortar location. Face recognition can improve customer experiences by instantly recognizing VIP customers who opt in. Moreover, retailers can send tailored text messages to customers in stores that offer recommendations, discounts and other offers.
Another popular appliance of face recognition is to assist staffs in store. Face recognition can also be used to send meaningful alerts to store employees so they can provide far better assistance to customers in stores even before asking about other detailed info of this customer. Facial recognition can integrate with a wide variety of retail solutions such as CRM, Loyalty systems, point of sale and more. Store associates can therefore gain a wealth of information about customers that can help them do a far better job of providing customer service.
3. Reverse showrooming is a popular and beneficial trend for retailers
Showrooming (the propensity for customers to browse in-store and buy online) was once seen as an existential threat to brick-and- mortar retailers, but it turns out that the reverse dynamic is more popular. According to Business Insider, 69 percent of people in the U.S have done reverse showrooming, while only 46 percent have done showrooming. Reverse showrooming, or clicks to bricks, occurs when a shopper browses and researches products online, but purchases them in the store. It is seen mostly in the case of apparel and furniture.
While it gives the customers the opportunity to actually touch and feel the product before buying it, this trend is beneficial for the retailers as well. This unification of online and offline data enables the retailers to better understand the buying behavior of consumers and helps in serving them in a more
4. Analytics are the Competitive Advantage
Capabilities of analyzing data has become the indisputable advantage of each retailer now. However, to analyse data, we have to collect data firstly and the Internet of Things (IoT) enables tracking and collecting data from sensors deployed across the retail value chain, including point of sale, inventory management and supply chain planning. Companies that still aren’t investing heavily in analytics by 2020 probably won’t be in business in 2021. There is simply far too much valuable customer data to be collected, processed and turned into insights for any company to remain competitive without making full use of modern analytics tools. Following your gut are no longer viable options when every other business is leveraging sophisticated analytics tools to identify problems, opportunities, and solutions. Analytical solutions process the gathered data to derive business insights on parameters such as customer movement, buying behavior and social network trends, and create business strategies to enhance business continuity and efficiency will be the most important key point.