To be relevant, businesses need to keep up with the digital transformation. Retailers are not an exception! Digitalization is affecting all types of business models and processes across different industries. Digitization means that customers expect more than just a great product or service–they want their shopping experiences to be fast, personalized, and effortless (just like the example of Amazon shown below).
If you want to stay competitive and relevant in such a fast-paced world, it is pivotal for retailers to develop and implement a digital strategy that will be at par with customer expectations.
There are different phases of digitization:
M - machine processability,
P - person processability,
T - time-bound transactions, and
E- effortless service.
Amazon is an example of a truly digitized company that has successfully implemented the 4th phase "effortless" shopping experience into its business model. As you can see from the image below, the company has successfully digitized its entire process that includes product search, purchase, delivery and users can even track their packages with real-time updates.
It is crucial for traditional retailers to keep up with this trend of digitalization to stay relevant in today's competitive business environment.
Here are some reasons why retail companies should start developing a digital strategy to start from now:
Stay Competitive: In order to stay competitive, retailers should look forward and embrace digital transformation. Hence, the key would be to implement a solid Digital Transformation Strategy that gives them a leg-up on their competition while keeping in pace with today's customer expectations.
Differentiation: One of the best ways for retailers to stay relevant is by differentiating themselves from their competitors. And this differentiation should come through the digital transformation of the entire business process which will help companies innovate and stay ahead in a fiercely competitive market full of new players.
Improve customer satisfaction: It is well known that the retail industry has the highest rate of customer dissatisfaction - as much as 73 percent of all customers have been dissatisfied with a purchase at least once in the past year. Hence, it is paramount for brick-and-mortar retailers to invest in new technologies that can boost their business and enhance customer satisfaction.
Digitization has changed the way customers shop - they are constantly connected, always aware of the latest trends and they expect retailers to keep up with their behavior. Managers need to include smartphones, wearable technology and social media in their business process plan to stay relevant - only then will they be able to improve customer satisfaction and boost sales.
Become future-ready: A digital strategy will help traditional brick-and-mortar retailers to become more future-ready and enable them to take full advantage of the ecommerce market. Many retailers have lost their customers to other competitors because they did not have a solid digital strategy in place.
It is important for retail managers to provide a personalized online shopping experience, establish a strong web presence and offer a "click-and-collect" service to attract consumers.
As brick-and-mortar retailers are being forced to implement a digital strategy, there are certain steps they need to take in order to achieve success:
Focus on building the right culture for implementation of your digital strategy - this is key. The entire implementation plan will depend on the company's vision and culture. So, before implementing any digital strategy, companies need to define their digital vision and determine whether they have the right culture for it - only when the two are aligned will they be able to stay relevant in today's fast-paced business environment.
Develop a strong IT foundation: A company needs an effective IT foundation in order to implement a solid digital strategy. It is important for companies to have a reliable IT infrastructure, robust network security so that their system is free from hackers and viruses, an automation tool which helps employees perform repetitive tasks more efficiently - all these are necessary in order to build a strong IT foundation.
Develop innovative products: Retailers need to be creative with the products they offer to their customers. They need a solid product development strategy that allows them to generate new ideas and provide customers with a wide range of products - which will ultimately contribute towards improving sales.
Create a multi-channel experience: A multi-channel approach is necessary for retailers as
they try to understand the needs of their customers and offer them an exceptional shopping experience. It will help them to improve customer engagement and attract more shoppers.
Gain complete visibility: Gaining complete visibility of the entire business is incredibly
important as it helps businesses understand which areas they need to focus on in order to develop a digital strategy that will benefit their company's bottom line.
It is said that having a clear understanding of the business, its customers and their buying patterns can help companies predict future trends - so it is essential for them to have complete visibility of the company's internal activities.
Invest in mobile technology: Sales via smartphones are increasing each year - in 2016, mobile sales overtook laptop sales worldwide. Hence, it is necessary for brick-and-mortar retailers to invest in mobile technology if they want to remain competitive.
The rapid shift towards digitization is blatantly visible during the holiday shopping season - ecommerce sales reach new record highs each year, while brick-and-mortar retail continues to face declining numbers.
These stats clearly show that traditional retailers need to incorporate digital tools into their business strategies if they wish to remain competitive.
There are certain measures retailers need to take in order to develop a digital strategy that will benefit their company:
Organizations should focus on implementing a robust and flexible IT infrastructure - this is extremely important as it represents the backbone of any successful digital transformation initiative. It allows employees to simply and securely access the information they need anytime, anywhere. A company's IT infrastructure can be optimized through the incorporation of cloud services within their system - it will help them build a solid digital strategy with better collaboration tools which will enable employees to work together more efficiently.
Companies should also develop innovative products in order to attract consumers and gain market share. They should focus on developing a wide range of products which will allow them to attract different types of customers and hence, expand their customer base. In addition, companies should invest in R&D - this will not only help them create innovative products but also contribute towards an increase in sales.
In order to offer a multi-channel experience to consumers, brick-and-mortar retailers need to enhance their online presence. They should establish a strong digital channel which will attract customers - this can be accomplished by offering them a personalized shopping experience through personalization tools and adding chat bots in order to assist shoppers with their purchases.
In order to gain complete visibility of the entire business, companies need to invest in mobile technologies. With mobile technology, they can access real-time data in order to make more informed decisions when it comes to managing their business and improving sales.
Companies that offer customers an exceptional shopping experience through the incorporation of digital tools will ultimately benefit from increased sales - this is due to the fact that today's consumers are digitally savvy and prefer purchasing products through digital channels.
As the shift towards digitization continues, brick-and-mortar retailers that fail to incorporate digital tools into their business strategies will face decline in sales and risk losing out on future opportunities.
Companies need to act fast if they wish to remain competitive during this age of digitization - they should implement a robust IT infrastructure and develop innovative products in order to attract shoppers.
If they wish to remain competitive during this age of digitization - they should implement a robust IT infrastructure and develop innovative products in order to attract shoppers.