As we all know by now, retail digital transformation is an imperative that applies to every business, no matter their size and no matter their customer. However, if you’re someone who has any professional responsibilities around implementing any form of retail technology, you may have noticed how often conversations on the topic can feel like people one-upping each other.
Not content with just small wins, the average article, keynote, or eBook on retail digital transformation will offer a visionary picture of exotic technology, like a fully-fledged metaverse blurring the lines between digital and physical experiences, or blockchain and AI fusing to form a loyalty programme that predicts and fulfils needs before the customer can. And to be clear, at the heart of those grand visions is a spark of innovation which really does and will add value for retailers and their customers.
However, it can also leave businesses operating out there in the real world a little cold – few, after all, are in a position today to invest scarce resources into the experimental frontiers of technology. More importantly, those frontiers only deliver value on the condition that more fundamental digital initiatives have been successfully implemented, putting the data and customer interaction foundations in place for new, untested ways of doing business to build upon.
Understanding the ground truth
So, given that we all know why digital transformation is so important in retail, both for today’s business viability and tomorrow’s competitive innovation, what does the road to it actually look like?
The key to answering that question – which points to the way a business of any given size should be making decisions – is to return consistently to thinking about what real customers thin and need. We know, for example, that across all verticals an average of 66% of customers prefer a hybrid experience which combines in-store and online ways of interacting with brands and retailers, while 25% prefer in-store and just 8% favour online-only.
This not only confirms that an omnichannel offering is now an essential precursor to retail success, but tells us that in-store interactions still carry a certain weight with customers, and so the best aspects of that channel need to be brought to any digital interaction. These percentages, of course, will vary significantly for different audiences, and understanding how your customers stand apart from the crowd should be your north star for digital initiatives.
Getting that initial step right is important because we also know that retailers can’t afford to, even temporarily, get the customer experience wrong. 50% of shoppers say that a poor experience would make them stop purchasing from a business – putting it second only to cost as a decision-making factor.
Choosing the next best step
When a solid picture of customer needs has been built, there is a broad menu of key digital transformation tactics which businesses of any size can pick from as their needs and capacity dictate – and which, crucially, set the stage for an ongoing digital future. We can look at just a few example starting points here.
Put information in the right places: Running an e-commerce offering involves assembling and organising a huge amount of data, ranging from product specs and colour options to how-to guides and consumer generated content such as reviews and photos and videos. If all of that is only working to enable online purchases, that’s leaving value on the table. Putting it on mobile devices for staff on the shopfloor can give them customer service superpowers, while offering in-store screens for customers can put them in control of their shopping journey.
Let customers build out your digital shelf: In our digital age, user-generated content like ratings and reviews, product photos, and Q&A conversations will show up on the internet whether you ask for it or not. That’s real work being put in by the people that your products matter to, and it deserves to be used to its full potential. Consider using technology to bring content from social media into your online retail presence, or even syndicating user content to invite purchasing decisions on the platforms where potential customers are spending their time anyway.
Gamify data in a way that creates real value: Loyalty cards are nothing new and can be seen as a kind of tiny game – as in, completing a quest to buy ten sandwiches wins you a reward of a free sandwich. Just as customers will create content online, they will also share information with you which can be used to create much more nuanced types of engagement than the old paper stamp card. Consider options like offering incremental discounts as customers return more unwanted products for a reuse and recycling programme.
All of these, of course, come down to better ways of using data and content, and that’s the real secret behind all the wilder visions of retail digital transformation. Getting the basics right, bringing together physical and digital operations, and all the data attached to them, into an omnichannel platform that makes sense, means being ready for retail’s future – no matter what that turns out to be.