Digital Transformation Strategy in Retail
The pandemic has reshaped consumer behaviour and magnified the need for retailers to ensure a digital transformation strategy is at the heart of their business.
According to McKinsey’s Retail Digital Transformation survey, COVID-19 has pushed companies over the technology tipping point, transforming businesses forever. Their survey found that the pandemic has accelerated adoption of digital technologies by years. These changes may have been reactive, but it’s now time to make them work for your business in the long term. Find out how with our top tips for developing a winning retail digital transformation strategy roadmap.
The benefits and challenges of a retail digital transformation strategy
Retail digital transformation has been a long time in the making. During the pandemic, consumers made a dramatic shift to online channels and more omnichannel purchases were made than ever before.
No longer restricted to one channel, digital transformation means customers are shopping on your website, exploring your mobile app, engaging with your social media or collecting in-person in your physical store. More meaningful physical and digital customer touchpoints enable retailers to create stronger brand connections and a more frictionless, personalised shopping experience.
The same tech can capture accurate real-time customer data that are critical for effective capabilities in your supply chain, inventory management and customer relationship processes – to name just a few business areas. These data-driven insights help you project demand and react to changing consumer needs, as well as identify new ways to connect with customers and stand out from your competition.
Of course, embracing the digital transformation involves change management, additional budget and complex, organisation-wide processes, but ultimately it will be worth it.
Want to find out more about the reality and the rewards of embracing retail technology? Read our blog on The benefits and challenges of retail digital transformation.
What is a digital transformation strategy in retail?
Technology alone won’t create great customer experiences. In fact, rushing ahead and investing in the wrong digital approach could have a negative impact. If you want to avoid this, you need to understand how expanded digital capabilities can best help you achieve your strategic business and customer priorities. This is where a digital transformation strategy comes in. It’s is a detailed plan for adopting new technologies, tools and practices to make all areas of your organisation more effective.
Your digital transformation retail strategy should clearly identify how technology can be deployed to achieve three things:
- Customer engagement: Your customers should be at the heart of everything you do – including this strategy. You should identify how you will create seamless customer experiences and reinforce brand loyalty.
- Employee empowerment: Without your employees, there’s no business. Your strategy needs to include the ways you will equip employees the knowledge, skills, and tools to make this digital transformation success.
- Optimised operations: Integration is key in the modern multichannel retail industry. Your strategy needs to identify how your business will achieve the operational consistency needed for the seamless omnichannel retailing your customers expect.
One piece of technology is unlikely to achieve everything you need. Instead, your strategy should identify key pieces of tech and how they will build an effective digital ecosystem that meets your business needs. For example, Artificial Intelligence (AI) could be used in chatbots which engage customers and provide a personalised service or in cashless retail stores to create the ultimate convenient shopping experience.
To find out more about your tech options and get inspired, read our How digital transformation in improving retail customer experience blog.
4 tips for developing a winning digital transformation strategy roadmap
A successful digital transformation requires a well-defined and functional strategy. Here are our four tips for creating a winning digital roadmap.
1. Keep it focused
With lots of new tech and plenty of potential customer channels, it can be hard to know where to start with your digital transformation strategy. Don’t bite off more than you can chew. Work out which areas will reap the biggest benefits for your business. For example, you might want to prioritise a consistent customer experience or optimise your website. Start with your priority areas and build from there.
2. Create clear objectives
Make sure you set clear and defined goals for your strategy so you and your team know what you are aiming to achieve. Key Performance Indicators (KPIs) keep everyone accountable. Your objectives should be specific, measurable, and time-based. With milestones identified you can check your progress and stay on track.
3. Align your projects
All projects should be working towards your overall business goals. Connect your digital projects with the bigger retail picture. Giving your team this context helps them see their role in the company’s growth.
4. Keep it up to date
Technology doesn’t stand still and neither should your strategy. To keep up with the pace of innovation, you need to actively keep an eye out for ways to incorporate the latest digital advancements into your customer offer.
Final thoughts
The pandemic forced businesses to move away from traditional retail approaches and embrace digital technology. If these changes are going to be effective in the long run, you need to put in place a digital transformation strategy that will work for your business.
Start by considering how digital capabilities will engage your customers, empower your employees and optimise your operations. Next, identify the key pieces of tech that will build an effective digital ecosystem and deliver the seamless experience your customers and business need. Make sure you keep your strategy focused on defined objectives and aligned projects. Keep track of your progress and don’t stop once you start to see the impact. Keep innovating to stay ahead of the competition.
Discover how to maximise the impact of retail technology with an effective digital transformation strategy at THE Retail Conference. Register HERE today!
