How Digitization is Redefining the New Normal of Retail Industry

The Covid-19 crisis has impacted every industry, and retail is no exception. With reduced customer volumes across business verticals, the world economy is fearing an impending recession. Yet, irrespective of the rate and distribution of the potential implications, retail is already rethinking its strategy. It is innovating the ways to respond to this recent change and drive revenue.

The retail footfall has witnessed an unprecedented low due to the spread of Covid-19. And, as shoppers continue to stay at home in a battle to contain the spread, digitization has entered the retail industry, empowering it to remain afloat even during troubled times.

Retailers are now leveraging advanced technology to ensure easy access to products, availability of a broader range, contactless purchase options, flexibility of payments, and ease of delivery, to create an unparalleled purchase experience.

The Growing Relevance of Digital Technology in Keeping Retail Up and Running

Digitization has benefits beyond marginal improvements for the retail sector. Technology can be leveraged to create a value-based engagement model that brings agility, enhances efficiency, streamlines processes and reduces cost.

To get the retail sector back on its feet and running like before, retailers need to revamp every aspect of the business — right from sourcing, packaging & inventory management to hygiene standards, employee training and customer experience.

Digitization presents new opportunities and better prospects for retailers who want to navigate customer retention, increase convenience, and cater to the needs of the instant gratification generation.

Analytics, AI, IoT and mobile apps are revolutionizing the way retailers are doing business by ensuring much higher levels of hygiene, efficiency, transparency, and consumer centricity. Let’s understand how technology is helping retailers survive the crisis, stay competitive and gain considerable market share.

How Data Analytics is Accelerating Sales Growth in Retail

Data analytics finds application at every stage in the retail process, from keeping track of competitors and emerging products to tracking sales and predicting future demands. Analytics can also be implemented to optimize the placement and pricing of new products for increased sales.

Following are key areas where retailers can leverage analytics to drive more sales and boost business growth:

Eliminating Potential Risk Factors

Executing any product idea without digging into previous and existing consumer interactions and purchase decisions can be risky. Retailers can use data analytics to predict product performances based on consumer likes and interests to make informed decisions while avoiding quick or prolonged losses.

Optimizing Product Prices

Analytics play a decisive role in the optimization of product pricing. Using intelligent algorithms, retailers can monitor inventory levels and consumer demands and accordingly respond to market changes in real-time.

Kroger, an American grocery chain, has come up with digital labels that display nutritional information and product price. It allows the store to change price tags in real-time for increased revenue.

These tags can also be integrated with the customer’s smartphone and aligned with the shopping list to send alerts to look for the next shopping item. Apart from enhancing the shopping experience, it is also impacting the sustainability of retail stores.

Managing Inventory

AI gives a clear picture of buying patterns, which allows retailers to cater to high demands for increased sales. Based on consumer demographics, economic parameters, purchase preferences and occasion-based buying decisions, retailers can make sure that the right inventory is available at the right time to enable maximize revenue.

Forecasting Future Trends

Data analytics tools can accurately forecast buying trends so retailers can make informed procurement decisions and know precisely what needs to be promoted and when.

Algorithms can also help retailers to understand the needs and wants of their existing and potential customers. These insights can be used to remodel marketing campaigns to target the right customers and drive more orders.

Data analytics enable retailers to study customer behavior and shopping trends and accordingly forecast sales. With this proactive approach, retailers are in a much better position to gain a competitive edge and increase their market share.

How Artificial Intelligence is Enhancing the Shopping Experience

IBM surveyed 1900 retail companies spread across 23 countries. The survey revealed that 85% of these companies were planning to automate their supply chain for increased efficiency and profits. They believed that the adoption of AI would increase their annual growth by 10%.

Here’s how AI is transforming the retail sector, for the better

Seamless Shopping Experience

Choosing glasses is an exhaustive process and with the ongoing crisis, customers wouldn’t want to go through the risky strategy of trying a dozen pairs to find that perfect match. Specsavers introduced a new service that makes this process safe and easy. With their Frame Styler software, customers can try multiple styles in 3D and see what best suits them.

Improved Customer Service

The Nike House of Innovation 000 in New York has created a flawless shopping experience for its customers by including digital technology in every aspect. This hi-tech store allows customers to reserve their preferred shoes online for in-store trials.

The customers can enter the store from a dedicated entrance and spot the locker with their name. This locker can be opened using a smartphone. They can shop conveniently without needing to speak to anyone and don’t need to queue up because it also allows mobile check-out!

Virtual Trials

Blurring the lines between online and offline shopping, artificial intelligence is also being leveraged to make shopping quick, easy and safe for consumers. Today, shopping malls have virtual trial rooms that allow shoppers to try different outfits using digital mirrors.

With a user-friendly gesture interface, shoppers can try different apparel, shoes and accessories and speed up the buying process without having to queue up outside the trial room. Mobile wallets can also be used to make the checkout process quick and easy without compromising on data security.

AI-powered Chatbots for Personalized Attention

Retailers can better engage their customers with interactive chatbots that efficiently manage several customer queries simultaneously without needing human intervention. Chatbots can be configured to offer a prompt and professional resolution of customer questions and to offer shopping recommendations.

With AI-powered chatbots, retailers can engage their customers, address their pain points, keep up with their expectations and improve customer loyalty. Many retailers have already implemented AI to automate different aspects of their store and made them more customer-centric.

How IoT Can be Used to Transform the Retail Sector

Robots

Retail stores can also employ friendly robots instead of sales staff to answer customer questions and assist them with shopping without needing human intervention. It would also eliminate the risk of the spread of infection. Robots can also be used to store and analyze purchase history, recommend the right products and predict future demands.

RFID Tags

Retail employees spend most of their time and effort to ensure that products are always in stock. Using IoT, retail stores can adopt the concept of smart shelves, which can not only track items but also identify thefts.

Smart shelves are integrated with RFID tags and intelligent sensors that can scan products that are in stock and on display. These shelves notify store owners when the product count is low or when the staff does not replace purchased products.

Automated Checkouts

Many customers don’t buy products to avoid the long queue at the billing counter. Using IoT, retailers can set up a convenient system that can read the price tag on every product and tally the items to generate a bill. This IoT-enabled checkout system can be configured to directly deduct the bill amount from the shopper’s digital payment app.

Ready to Revamp Your Retail Business?

Implementing digital technology may sound profitable to you by now, but how do you get started? As a retailer, you need to ensure that your digital transformation strategy efficiently caters to the ever-changing consumer preferences and meets the evolving needs of the marketplace.

The best way to initiate digital transformation is by partnering with the right retail software development company that can give you a perfect start with a solid revamp management strategy.

Only the right retail software development company will have the technical expertise to assist you in digitizing your retail business and, the industry experience to empower you to drive growth with a scalable architecture that supports dynamic changes.