What digital transformation entails for the retail sector?
Aggressive adoption of digital in the retail sector is revolutionizing the traditional shopping processes and driving a tectonic shift in the overall retail ecosystem.
The Retail scenario has never been so exciting. There is a spur of technology advancements both from consumers’ and marketers’ point of view. Smartphones and the growth of eCommerce has redefined the whole shopping experience. Retailers are leveraging technologies and channels faster than ever before and are focusing more to deliver a unified consumer experience across different channels. Shoppers today expect all information in multiple sources and formats, especially on digital channels.
They look for consistency and convergence among different technologies and channels. All these technological advancements are driving a significant transformation. The revenue is majorly driven by an upwardly mobile young population who mostly use their mobile phones for accessing the Internet and for online shopping. Hence, there is a major focus on mobile apps with most of the retailers taking an omni-channel strategy with mobile-first approach.
Transforming the shopping journey in a digital way
Any shopping journey consists of five fundamental activities—awareness, selection, transaction, delivery, and aftersales care. New digital technologies and platforms have brought disruptive changes in how a shopper goes through these phases in modern retail systems. Let us understand how digital technologies and platforms are revolutionizing the traditional shopping processes and what kind of impact they are creating on the overall retail ecosystem.
Awareness: Internet as a main learning Platform
Today, shoppers use Internet as one of the most desired channels for learning about the products and services.
This is particularly true for vacation packages, air tickets, hotels, books, as well as high-value items like electronics. Emails, especially newsletters and offers, have replaced snail mail as another learning medium. Social media has become another relevant medium for awareness building, especially in developing countries like India where social media usage and its influence on shoppers is pretty high. Internet, email, and mobile apps also help retailers to personalize and localize the offerings and make effective recommendations.
Selection: Powered by personalized recommendations
Although, price and product specs remain key factors in selecting a particular item, understanding a shopper’s behavior along with shopping history and analyzing the same with the help of other relevant data for making personalized recommendations can improve the selection process. Today, Internet sites are the most important digital channels for identifying a product or service, comparing with a related product or service, and finally making selection. Social media also plays a major role in this process as the review of a person belonging to a shopper’s network can influence the final selection decision.
Transaction: Riding the eCommerce boom
Indian retail industry is experiencing an exceptional growth driven by Indian e-tailers. During the last few years, we have seen the emergence of e-tailers like Flipkart and Snapdeal, which has changed the complete retail scenario. With their success, most of the retailers are creating/improving their online channel. Smartphones have also become an important medium for purchase. Higher adoption of credit and debit cards, mobile payments solutions by mobile operators, and innovative payment solutions like cash on delivery by e-tailers are also driving the transaction growth using digital channels.
Delivery: Digital platforms enabling doorstep delivery
A key differentiator for retailers operating a range of channels is delivery flexibility—delivering to wherever the shopper wants and whenever he wants. Internet, mobile technologies, and location-based services also enable retailers to make their delivery process efficient and enable shoppers to track their shipment in real time.
Aftersales care: Digital enabling customized aftersales
Internet, mobile apps, and social media help retailers to get consumer feedback quickly and provide immediate resolution on any issue related to product quality, installation or service delivery. These technologies also enable retailers to provide personalized and customized aftersales service to improve customer experience.
New digital platforms and technologies are transforming the retail industry by enabling it to become more efficient, provide personalized offerings, and improve customer experience. Shoppers today are looking for a seamless, integrated shopping experience across all channels and digital channels play a major role in this.
(Based on a article by the same author originally published in Dataquest, May 15th Edition, 2015)