Retail businesses were already on board with digital transformation before the last two years, but the change has accelerated as retailers have adopted digital solutions to survive. The question is no longer whether to adopt the technology: it is a question of which technologies and at what speed. While it can be daunting, the new era of retail technology also presents a golden opportunity to make your business more agile, efficient, and resilient.
What are the most important forces driving digital transformation in retail and how can you navigate this complex IT landscape?
Market disruptions and rapid changes
As retailers know all too well, we face a perfect storm of external forces such as energy, material and shipping cost inflation, geopolitical unrest, factory closures and of ports, incoming regulations and the possibility of a recession on the horizon. New challenges arise every day and retailers need to be agile to meet them. Digital transformation solutions have an important role to play in improving visibility, providing analytics, streamlining supply chains, and improving planning and forecasting to empower retailers in these challenging times. .
Retail businesses have also been disrupted internally, with a significant shift towards remote employee collaboration in the background and e-commerce upstream. These changes have been facilitated by digital solutions, but the level of end-to-end integration between different platforms can have a significant impact on whether or not these digital transformation projects are able to reach their full potential.
Customers today expect the brands they engage with to offer simple purchasing processes and to meet them everywhere: to be able to order from their phone, to pick up the product in a store and to bring it back to another. Built around an omnichannel strategy designed to strengthen the brand-consumer relationship, it’s no coincidence that the direct-to-consumer (DTC) model has exploded in 2021. In response, retail is shifting its focus from products and brands towards the customer and his experience.
Sustainability is the order of the day. Customers increasingly want more sustainable and ethical product choices. To satisfy customer demand for transparency around environmental and social impacts, many retailers are investing resources in digital solutions to track and maintain sustainability initiatives.
Merge physical and digital experiences
The new trend in consumer experience known as “phygital” mixes physical and digital experiences, posing a challenge for retailers to successfully merge in-store and e-commerce experiences.
For retailers, the right mix can build customer loyalty, attract new customers, improve customer service, and drive better product and assortment strategies.
Digital solutions like product lifecycle management (PLM) can make ends meet, especially when they seamlessly integrate with software like CRM, e-commerce, and ERP platforms. Using a collaborative open system that integrates data from anywhere in real time facilitates the analysis of trends and consumer behavior to improve assortment planning and deliver enhanced experiences, both in-store and online.
Data Driven Strategies
Retailers no longer define customers by simple criteria such as age, gender and income demographics. Today, technology can power the collection of detailed data on purchases, loyalty programs and more, allowing retailers to get a much more complete picture of their customers across unlimited criteria and develop new assortments. Consequently.
Sophisticated retail planning tools use artificial intelligence (AI) to sift through huge volumes of data, identify shopping habits, and make predictions about the success of products and assortment configurations .
How to Navigate Digital Transformation in Retail
Whatever your digital transformation goal, here are some guiding principles to keep in mind:
Interact with your customers
Investing in solutions that integrate all of your digital touchpoints can help you connect with customers and stock more relevant products, which in the long run leads to more sales and stronger brand positioning. Digital transformation solutions allow retailers to coordinate omnichannel product launch strategies and make it easier for customers to choose and buy products.
Simplify the life of your employees
Remote and hybrid working are the most obvious applications of digital technology on the employee side. Integrated software that enables real-time collaboration from anywhere with access to the same data empowers your teams and external partners to work together faster, streamline operations, make better decisions, and accelerate entering market.
Use data to your advantage
High-quality data will guide strategic decisions regarding critical operations, such as inventory management. Digital tools that leverage accurate data can enable retailers to see real-time product availability, accurately forecast demand, reduce waste, overstocking and discounts, optimize purchasing and offer vastly improved experience to their customers.
Dedicating time and resources to digital transformation is a real investment in the future of your retail business. Effective digital transformation will determine which retail players will adapt to these turbulent times, and which will struggle due to a lack of integration across teams and platforms, outdated processes and hampered visibility.
Making the decision to invest in digital transformation is a huge opportunity to strengthen your business. By keeping your strategic goals in mind and some basic principles as you navigate the IT landscape, you can choose solutions that will benefit your retail business now and for years to come.
For a list of sources used in this article, please contact the publisher.
Paula Biste is an expert in digitizing end-to-end merchandising processes and a business consultant at Centric Software. From its headquarters in Silicon Valley, Centric Software® is the leader in PLM and planning solutions for retailers, brands and manufacturers in the consumer goods industry.
Centric provides product concept to consumer digital transformation platform. Centric’s flagship product lifecycle management (PLM) platform, Centric PLMTM and Centric Planning, delivers enterprise-class innovations in merchandise planning, product development, sourcing, quality and product portfolio optimization, specifically for fast-paced consumer industries.