The Impact of Digital Technology on Retail
In the age of experiences, where inspiring brand loyalty is the number one goal, retailers rely on digital technology to help them personalize, differentiate, and enhance the customer journey.
But it’s not just about the customer’s experience. Technology has revolutionized business operations from the manufacturing plant to the store shelf and through every step in between.
The Benefits of Digital Technology on the Customer-Facing Side
Some call it the “Amazon Effect.” Today’s retail customer has certain expectations, and if they are unmet, we can assume they will jump ship for a competitor. Digital technology enables the features customers want the most, including:
- Detailed tracking
- Inventory transparency
- Buy online pick up in-store (BOPIS)
- Omnichannel customer service
- Loyalty and personalized promotions
- Unique experiences
- A multitude of ways to pay
And of course, there is so much more. Beacons at store entrances pick up on loyalty customers in the vicinity, enabling personalized offers based on their past purchases.
Smart mirrors allow shoppers to “try on” different styles or check out new shades of lipstick without actually putting anything on your face.
Smart dressing rooms, such as the ones at Ralph Lauren’s flagship store in New York City, not only enable trying alternate colors for an outfit, but they also allow you to adjust the lighting for different times of the day. Need a different size? Just choose the option you want, and it alerts a sales associate. Items that go with the outfits you’re trying on also appear on the mirror, encouraging an upsell. Items not purchased can be instantly sent to the customer’s phone for purchase at a later date.
Digital Benefits for Retailers
As is stands, the options are pretty exciting for consumers. Retail technology has elevated the shopping experience to the ultimate degree. But the landscape is just as thrilling from behind the counter, driving efficiencies, optimizing inventory, increasing profits, and inducing brand loyalty.
Some of the data-driven efficiencies supporting today’s retailers include:
- Predictive inventory and demand forecasting
- Inventory accuracy and visibility
- Supply chain optimization
- Product authentication
- Product traceability
- Logistics management
- In-store product placement optimization
- Employee management
But despite the potential offered by digital transformation, not all retailers are fully on board. There is a significant curve involved in implementing the technological backbone required to make it all go. Beyond the technology itself, systems, workflows, and mindsets must change for innovation to thrive.
Finding Context in Your Data
Data needs to have context to be of value. It’s all well and good to have nifty options like mobile apps, in-store offers, and loyalty programs, but if they are not integrated with other data—like buying history, preferences, and general customer behavior—you are leaving money on the table.
To achieve a 360˚ experience for your customers, technology must be integrated, automated, and able to deliver valuable insights into individual customer buying behaviors as well as broader sales trends.
Leveraging technologies like IoT, RFID, artificial intelligence, and machine learning, retailers stand to gain visibility through every process. From customer service to inventory management, loss prevention, and logistics to employee-facing applications, technology lights the way forward, helping retailers gain a competitive advantage in today’s competitive business ecosystem.