How does digital transformation affect retail?

How does digital transformation affect retail? 

From finance and entertainment to education, manufacturing, and healthcare, digital transformation is affecting every industry today. Digital technology allows companies to improve their services and provide products that meet customer expectations. In digital transformation, customers’ preferences and market trends are becoming more responsive. As a result, digital transformation affects many aspects of an organization, from its employees to the technologies used in external communication. 


In retail, this is exactly how digital transformation works. To generate revenue and build modern business models, retailers are seeking innovative solutions. Increasingly, technology and digital tools are influencing not only the services and products provided by the company but also its culture, management, and workflow organization. With digital transformation, employees have the opportunity to acquire new knowledge and master new skills. 


The digital transformation process is a long-term endeavor in which one initiative affects another, influencing other organizational elements. Digital transformation in retail is fundamentally about implementing digital tools and building new processes to understand and respond to customer needs as efficiently as possible.


The benefits of digital transformation for retail


Improved customer service

Retailers can easily communicate with their customer’s thanks to digital transformation solutions, which include websites, social media accounts, mobile apps and chatbots. As customers move down the sales funnel, funnel scripts free, such new channels offer opportunities for engagement, for boosting customer loyalty, for sharing promotions, and for inspiring them. 


Effortless operations

Retailers can improve their internal and external operations by implementing modern tools based on cloud technologies. With cloud-based tools, employees can automate processes, which reduces the amount of time they spend on manual tasks. Additionally, companies can benefit from tools that make customer knowledge more transparent and use them to improve customer support. 



Customers can shop in brand-new ways with the help of artificial intelligence (AI) – for example, by following the recommendations of an AI chatbot. In addition to bettering employee productivity (getting more time to work on mission-critical tasks), automation can also improve customer service (delivering services faster). Retailers can also use digital transformation tools to sell their products not just in physical stores, but in many other channels as well, starting with websites and mobile applications and concluding with social media.


Increased revenue

By using different channels, retailers can engage new customer segments instantly and go global in no time, because digital transformation enables businesses to generate more than one income channel. 


Customers are treated better

All of the changes are driven by the core objective of digital transformation – to improve customer experience. By using digital tools, employees can be more productive, making service quicker and more efficient. Therefore, consumers receive better service, and their journey towards making a purchase is far more pleasant. Customer-centricity is central to digital transformation. The goal is to enable businesses to better understand their customers and help them find exactly what they need at the right time.


In the retail industry, digital transformation is a driving force

The following are the main drivers of digital transformation among retailers that are responsible for the changes we see in the retail industry today:

1. Customers’ changing expectations. This is referred to as a channel-agnostic shopping journey. Digital or omnichannel shoppers don’t mind switching channels. They want access to offers wherever they are available, including social media and mobile apps. Shoppers can access a wide range of digital tools to help them with tasks like searching for products and comparing prices, whether online or in-store, and even post-shopping activities like reviews, customer service, future purchases, or word-of-mouth marketing.


 2. It’s already a part of the consumer mindset to blur the line between in-store and online experiences. Innovations like the Internet of Things (IoT) and immersive experiences provided by Augmented Reality (AR) and Virtual Reality (VR) are only boosting this trend.


3. Across the world, organizations are facing supply chain challenges. Retailers who failed to digitize their supply chains are experiencing visibility issues. and tracking. TraAcross the world, organizations are facing supply chain challenges. Retailers who failed to digitize their supply chains are experiencing visibility issues.


4. There is a high level of competition from digital-native champions of customer experience and retailers. Despite having fewer resources than their competitors, retailers are able to lower their operational costs, digitize their supply chains, and increase customer access thanks to new digital tools.


5. Areas such as data-driven management, optimization, sales, and marketing have evolved and offered new opportunities. The use of digital tools empowers employees without a doubt. Employers can become more productive and knowledgeable with new technologies – and retailers are well aware of that.


6. Personalization is a trend. Today, consumers want customized shopping experiences. The consumer is fully aware that brands collect information about them, and he or she wants to receive a fully personalized experience in exchange. It is impossible to create an immersive shopping experience without the use of digital tools that collect and store data so retailers can analyze it and gain insights.


7. Mobile is another factor driving retail’s digital transformation. Millennials are the largest consumer segment today, so omnichannel shopping tools are essential to reach them. The digital tools are used by customers at every point in their shopping journey. Customers prefer to make purchases on the go and on their mobile devices. Mobile technology, like IoT, blurs the line between the digital and physical, so these customers expect to be engaged via their mobile devices while in the store.



To survive in the future market, retailers must integrate digital tools into their processes as soon as possible. Today’s consumers have plenty of options to choose from, and only retailers who can meet them halfway will be able to retain their attention.