DIGITAL TRANSFORMATION IN RETAIL
WHAT IS DIGITAL TRANSFORMATION IN RETAIL?
Digital technology is rapidly transforming retail. In the not-so-distant past, virtual spaces were isolated to fringe or cutting-edge retailers. Today that’s changed dramatically, as retailers who don’t operate in virtual spaces are certain to fall behind. Technology in the retail industry is transforming the relationship between customers, retailers, and marketers, resulting in a closer and more efficient exchange of goods and information.
There are many digital trends in retail worth considering when hoping to launch your own digital transformation. But before you start capitalizing on the latest and greatest retail innovation ideas, it’s important to first establish a bit of context.
To put it simply, digital transformation in retail refers to the way in which businesses use digital tools to innovate the way they do business. These tools can impact nearly every aspect of a business shifting the way teams interact with staff, data, or internal systems. The end goal of digital transformation is to generate value that can be delivered directly to customers, as well as to retain an edge against the competition.
There are a wide variety of retail innovation ideas and technology that could potentially spur digital transformation. While the future of technology in the retail industry is still somewhat uncertain, there are revolutionary new tools available today that are changing the way retailers direct their teams, optimize their data, and satisfy their customers.
What is customer master data management?
Customer master data takes retail data management to the next level. Customer master data takes a specific look at transactional data, focusing on how transactions are recorded and posted by a team. This is the core data that is essential to running your retail business, and can provide you with the insights you need to do business with your customers, helping you develop a more connective relationship with them.
Customer master data management or customer MDM, essentially means organizing and unifying that data into a single platform. Once properly consolidated, your business can then use that data to create more meaningful touchpoints with your customers. Additionally, you can use these insights to gain a deeper understanding of both your customers and the performance of your marketing or products. Proper customer master data management implies that this data can be accessed via a multitude of organizational data silos, allowing for different members of your team to easily access and utilize that data on the fly.
HOW TECHNOLOGY IS CHANGING RETAIL
The internet, computers, cellphones, and artificial intelligence are all just a few retail transformation examples. Yet, in the current state of retail, technology is increasing the momentum of change, shifting the way consumers interact with brands. In the more distant past, consumers and brands had a relatively light-touch relationship as advertising was isolated to mediums like television, radio, and print. Nowadays, marketers can reach all of their customers in an instant without having to worry about purchasing the right print ad or grabbing the right advertising network time slot. The modern marketer can instead use SMS marketing to send out messages en masse to all the customers on their list at once. While this may seem like an efficient way to capture engagement and drive sales, today’s state of retail lends for far greater competition.
Your customers have never had more access to competitor brands. Just as you can reach your customers in an instant, so can your leading competitor brands. As a result, impact and quality have taken greater importance than simply reaching the most amount of customers at once.
Technology has changed retail forever, pushing retailers to focus on experiences rather than products or snazzy marketing. This change in the state of retail has gone on to benefit the consumer as they are gifted with more satisfying marketing, experiences, and products. Technology has made retailers focus more on the customer than their immediate bottom-line. Retailers must take a more nuanced approach to win business in today’s state of retail, and technology helps them refine and execute that approach.
IMPACT OF DIGITALIZATION ON RETAIL INDUSTRY
If you’re a retailer looking to invest funds in new technologies, you may be asking yourself, ‘what are the benefits of digital transformation in retail?’ This is a worthwhile question to ask yourself, and the answer is layered as it all depends on the technology you implement and whether or not a tool is effective for your particular use case.
That said, there are a number of immediate benefits that retailers can realize when they take an approach towards digital transformation:
- Streamline customer service
- Create engaging customer experiences
- Gain deeper customer understanding
- Enhance marketing campaigns
- Reduce marketing costs and wastage
- Improve business adaptability
These are just some of the ways in which your retail brand can benefit from digital transformation. For example, if your business is hoping to contact your customers about a potential promotion, you can utilize automated email and SMS services to distribute your messaging across your entire collective brand audience. Additionally, you can use technologies like a customer data and experience platform (CDXP) to gain enriched customer insight into who your customers are, what they want, and how to satisfy their immediate needs. With this understanding, you can launch marketing campaigns that are engaging and help optimize your spending so that you’re targeting the individuals who are most likely to be activated by your messaging.
RETAIL TECHNOLOGY TRENDS 2022
There are many retail technology trends in 2022 worth following and potentially adopting into your current business model. For example, many businesses are relying on artificial technology to power internal and external processes. There are many operations worth automating, and some have found success in powering their inventory management with A.I. In this particular use case, businesses utilize A.I to manage inventories, predicting when certain items may be likely to run out of stock or when a business may need to up their production or order a larger stock. Other businesses are tapping into A.I technologies to run complex consumer behavior analyses. In this use case, businesses use automated systems to pour over vast quantities of customer behavioral data to gain a better understanding of how to market to their customers and earn their business.
Other businesses are using innovative augmented reality technology to create virtual fitting rooms, enhance in-store navigation, and enhance overall experiences. First gaining traction in 2020, augmented reality technologies help both consumers and employees enhance their experiences. For instance, augmented reality navigation helps customers map out the inside of retail stores, ensuring that they get to their desired product section faster. Additionally, augmented reality can be used by retail staff assisting in stocking shelves and adapting to shifting foot-traffic.
Some brands are relying on the assistance of a CDXP to enhance their customer experiences and transform the way they do business. CDXPs are software platforms that connect marketers to their customer data, unifying databases and delivering a single customer view. Through this single customer view, marketers can adapt to shifting customer behaviors, utilize deep customer insight, and create experiences that engage and satisfy. Retailers are also tapping into CDXPs to enhance their marketing by crafting highly specific customer segments. These customer segments are finely divided by behaviors, attributes, and purchasing history. With their audiences properly organized they can refine their marketing to target specific needs and desires, ensuring their ad spend is fully optimized. With a CDXP, retailers are transforming their business, helping them become more customer-centric so that they can build loyalty and long-term revenue growth.
HOW LEXER CDXP CAN HELP YOU TAKE ON DIGITAL TRANSFORMATION IN RETAIL
Lexer is the only CDXP built for retail. Utilized by over 150 leading brands, Lexer helps marketers launch advanced customer segmentation and create a single customer view without the hands-on need of an IT or data science team. When you tap into Lexer CDXP you’ll find the tools necessary to develop a deep understanding of who your customers are so you can better create the experiences that satisfy them.
- Customer Data Platform (CDP)
- Retail Data Management
- Customer Retention Software
- Customer Intelligence Platform
- Retail Clienteling Software
- Customer Data Platform Architecture
- Customer Segmentation in Retail
- Clienteling in Retail
- Customer Loyalty Strategies
- Retail Data Systems
- Customer Experience in Retail
- Customer Insight Tools