Digital transformation is a vital tool for retailers to play catch up in the evolving market, which is the current generation of choice. The escalating transformation that is affected by the advancement in digital technologies changes the process of doing business, making it modern through innovative technologies, efficient and satisfying to customers, and that is the leading factor to business success. This post will examine the leaders in retail DT and explore the future trajectory of DT in this industry.
A standout as the front-runner in retail e-commerce are e-commerce tycoons like Amazon and Alibaba. Amazon has become an unbeatable benchmark, but it keeps innovating cutting-edge technology across the entire supply chain. Using pioneering technologies like recommender engines and customer reviews, the Prime for loyalty and quick shipping, and innovations such as 1-click ordering, Dash buttons, Alexa voice commerce, Amazon Go cashierless stores, and most recently, Amazon One palm payment technology, AmazonAmazon’sd digital transformations have had profound effects on the retailing sector. They are tireless, customer-centric innovators with no qualms about self-cannibalizing to gain an edge. They remain the industry to this day. As such, the Prime program, which has attracted an estimated 156 million subscribers globally who spend $1,400 each year compared to the non-Prime custom customers ‘ $600, demonstrates this (McKinsey, 2020). At the same time, Alibaba controls the extension of the “New Retail” in C” with a combined online and offline window shopping experience. AlibabAlibaba’s supermarkets portray the future of retail with already adopted mobile go-and-scan features, 30-minute delivery within a 3km radius, facial recognition payment, inside dining and practice of cooking classes, and more. Hema earns business margins of up to 3-5x that of traditional supermarkets by integrating information technology with customer data. DT spaces from Alibaba all through the consumer journey, from learning to buying (90% of Hema’sHema’s through the Hema app) to delivering (Cainiao logistics takes about 100 million packages per day to be completed).
Other Retailers Making Significant Strides in DT
Walmart: Working hard on e-commerce platforms, acquiring Jet.com for 3.3B US dollars and Flipkart for 16 billion US dollars investments, launching Express Delivery (within 2 hours) and InHome Delivery (primarily to a customer), and experimenting with Amazon Go, AI-powered shelf scanning robots and VR training, blockchain for food safety and so In the second quarter of 2020, the e-commerce sales of the online store, Walmart recorded a growth of 97% year on year (Humphrey, 2021).
Nike: The second pillar is e-commerce, as Direct-To-Consumer, which results in 35% plus of total revenue. Besides, the brand universe with apps like SNKRS, NTC, Nike+, and the e-commerce store was started. The next step is moving the brand stores (Nike Live) and installing mobile integration features; Nike acquired a data science company called Select to enable the In 2020, Nike’sNike’st is to obtain 50% of sales directly from DTC and to raise it to 100% by 2023 (McKinsey, 2020).
Sephora: The customers can virtually try on any eye makeup (200 Million shades tried), set up a beauty service appointment in-store online, get a custom splined care recommendation, and engage with beauty consultants through SephorSephora’sl Artist and Virtual Artist digital tools. According to the report, the SephorSephora’se app has a user base of over 4.5 million daily.
Starbucks: Our innovation includes mobile payment, mainly ordering payments made up (24% pre-COVID), the creation of digital gifting, and personalized promotions. Starbucks’s RewarStarbuck loyalty program now has more than 19 million active users, who drive sales to 50%. Mobile orders contribute more than three times the profit as Starbucks no longer forgoes additional costs and its customers spend more.
Key Trends
Omnichannel: An exemplary example of a digital and physical blend of the touchpoints in the consumer journey will be an obvious choice for a high-end experience. The present one underlines that 73% of shoppers access multiple shopping channels. Retailers will emphasize the elements of two shops and new channels of commerce (social commerce and conversational commerce). In addition, they will focus on innovations that combine the physical and digital (e.g., innovative packaging, AR product visualization).
Personalization: AI/ML will drive hyper-personalized offerings that will occur in real time based on consumer situation signals. 80% of consumers tend to purchase the products and services of companies that offer personalized services (Source, 2018). Therefore, retailers need to provide consumer-driven, personalized experiences that reflect each distinct person. Retailers understand the relationship of their enterprise with consumers. They will focus on “segment o” one,” which involves selecting personalized products, promotions, assorted collections, and bundling (e.g., Stitch Fix, function of beauty). Personalization will not only compensate for the drop in the rate of sales by 10-30%.
Automation: Sharing in approval, sellers will invent the work, decisions, and experiences across the value chain for AI, robotics, IoT, and other technologies that can automate the processes. Companies like Ocado employ robotic warehouse fulfillment; Amazon created Go stores without self-checkout and AI-driven assortment optimization and pricing (H&M); and 1-800-Flowers installed chatbots for customer service. Machine learning and AI can increase productivity and CX, though human resources can still perform these tasks. Human resources can dedicate their time to complicated, high-value tasks.
Fulfillment: The competition over subsistence and the last mile has been intensified and is now a familiar battleground with the emergence of e-commerce. Shopping differently is going to be a reality, and consumers will have it in many ways (e.g., on-demand delivery such as Instacert, curbside pickup as Target, delivery through crowdsourced vehicles (DoorDash), self-driving cars (Nuro), micro-fulfillment centers (Albertsons). The main purpose is to satisfy customers` expectations for thoughtful provision of service efficiency, convenience, and control over the delivery order process.
Mobile: Smartphones have become the hand-controlled substitute for retail, with mobile commerce being the best remedy to the problem of online commerce, which has grown 2.5 times faster than e-commerce. Experiences will be designed mobile-first to search for tourism information on Facebook, Instagram, and other search engines, purchase souvenirs via Alibaba, promote posts on Instagram, reply to customer payment messages, etc. Social networking, video streaming, and gaming, which are trending nowadays, blend the lines between entertainment and marketing (Phaneuf, 2021).
Stores: First of all, the brick-and-mortar stores will turn from places for purchase into platforms for an experience that will be esthetically pleasant, and there will be a sales consultant along with a fulfillment hub. Then comes the community-focused hubs. 81% of Gen-Z love the old-fashioned shopping in stores to explore additional things to shop. The future of retail will look technologically advanced with self-checkout shops (Kroger), mobile-integrated tools for workers (Apple), and computer vision (Amazon One). Instead of just a single space, there will be modular and multi-purpose places that can flex to accomplish different tasks like sale promotions, events, order pickup, returns, and repairs.
In the post-COVID scenario, omnichannel is becoming much more critical for retailers than in the good times – it gradually went from “nice to ha”e” to a non-optional tool for retailers to maintain their business. A year later, the pandemic pushed e-commerce adoption forward by a decade. The penetration of e-commerce advanced from 16% to 33% in the US (McKinsey, 2021). Retailers had to create and improve their digital capabilities quickly to meet the needs of consumers confined at home – from developing delivery and pickup options to virtualizing in-person services (e.g., Neiman Marcus +11% YoY in digital sales while Lululemon’sLululemon’sds of the lockdown are met). 75% of consumers embarked on new shopping habits during COVID-19, and 80%+ of them have stated that they wish to continue with it even post-COVID (McKinsey, 2020). The retail industry will no longer exist as is, –4- the new perspective of digital-first and consumer-centered business.
Conclusion
In conclusion, DT (Digital Transformation) is priceless in restructuring operations in the retail sector, and scale and scope are the features of innovative tech. Companies like Amazon, Alibaba, and Walmart now offer examples of leaders who are always looking for a better status quo, are doing their best to digitalize their business processes, and are focused on offering top-notch services to their clients. From artificial intelligence to augmented reality, we can witness the omnichannel technology that helps retailers attract their consumers more individually, however more practically, more seamlessly, and more automatically, more experientially.
References
Humphrey, S. J. (2021). The Effect of E-Commerce on Retail Supply Chains (Doctoral dissertation, California Southern University).
Marketing, E. (2018). The power of me: The impact of personalization on marketing performance. Slideshare. URL: https://www. slideshare. Net/EpsilonMktg/the-power-of-me-the-impact-ofpersonalization-on-marketing-performance (дата звернення 01.12. 2023).
McKinsey. (2020). Perspectives on retail and consumer goods.
Phaneuf, A. (2021). Social Commerce 2021: Social media and ecommerce convergence trends brings growth opportunity for brands. Business Insider.
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