4 ways retail can benefit from digital transformation

The SMEs GO Digital programme was launched by the Singapore government in April 2017 to help small and medium-sized enterprises to adopt digital transformation and continue to thrive. Since then, more than 80,000 companies have embarked on their digital transformation journey to drive innovation and growth.

The Singapore government provides an array of tools that smooth digital transformation, such as digital readiness self-assessment and project management services. But what exactly is digital transformation? How can it help retail grow? What are the best practices for digital transformation for retail businesses?

In this blog post, we are going to explore the ways in which digital transformation can benefit the retail industry.

Digital transformation refers to the integration of digital technology into an organization in order to reshape business operations, strategies, and customer experiences. This simple two-word term involves leveraging a wide range of innovative technologies, such as artificial intelligence, cloud computing, and data analytics, to optimize efficiency, enhance decision-making, and unlock new opportunities for growth and competitive advantage. Going digital allows companies to better navigate in the constantly evolving market, enhancing efficiency and productivity, providing better customer experience and so forth.

Examples of digital transformation in retail

Some of the ways digital transformation can drive growth in retail include:

• Retail businesses can provide an omnichannel shopping experience and multiple delivery options.
• Customers can access the store using any device, such as a laptop, a smartphone, or a tablet, and any location in the world.
• Retailers can utilize new technologies, like AI and augmented reality, to provide a virtual shopping experience that helps customers to understand the product better.
• Data analytics has become central to making business decisions.

These also manifest in the major digital transformation trends in retail: big data, omnichannel integration, Internet of Things (IoT), augmented reality, transition to mobile, and blockchain.

To stay in the increasingly competitive retail industry, businesses seek to deliver better, more personalized shopping experiences to attract new and retain old customers. This is where digital transformation comes in. With data analytics and AI technologies, retail companies can have a finer understanding of their customers and adapt to the digital market in the following ways.

Useful market insights

With the help of technology, stores can collect, track and analyze information about the market as well as shoppers. For instance, business owners can know what kind of products are popular, what age groups are more inclined to buy an item, what is the best time to place ads, etc. This information can help companies to create or modify their business models and strategies. More personalized and targeted marketing campaigns can also be created with this data. Retailers can make the most of varying digital tools, such as CRM, data analytics, marketing automation tools, etc. to identify patterns and tailor-build marketing campaigns.

Enhanced customer service

Thanks to digital technologies, retail businesses now have multiple channels where customers can easily reach them and receive support, such as social media platforms, chatbots, email and websites. Communication between retailers and shoppers thus becomes easier and more efficient. In addition, retail businesses can even provide instant help and solve some of the problems for customers right away by using customer service automation technology. AI technology can also sort customer queries and assign them to individuals responsible for the specific task.

Increased customer retention

Tailor-made marketing campaigns and improved customer service play an important role in growing customer loyalty. Personalized communications and promotional ads strengthen the bond between customers and the brand, which leads to increased purchase frequency and retention.

Inventory management

Digital technologies, of course, help retailers in ways other than attracting and retaining customers. For one thing, market insights can be used to better manage inventory. Accurate sales data allow business owners to make smarter merchandise stacking decisions. Moreover, inventory status can also be more efficiently monitored with technologies, making inventory processes, order fulfillment, and warehouse management easier.

As beneficial as digital transformation is, it also comes with many challenges that businesses need to tackle before enjoying the advantages.

Changes

The digital transformation process inevitably brings a myriad of changes. Depending on the size and the needs of the business, some changes can be difficult to adapt to. Resistance to change, both individual and organizational, needs to be overcome first.

Budget concerns

Going digital will no doubt incur additional costs. Building IT infrastructure, either on-premises or on the cloud, requires investment in hardware, software, and human resources. Retailers will need to carefully examine their needs to develop cost-effective digital transformation plans.

Complexity

Reshaping the entire IT infrastructure or even business model involves a wide range of procedures and steps. Integrating new technologies, such as IoT systems, CRM systems, and inventory management systems, can be an obstacle for employees with little or no IT experience.

Digital transformation can surely be an onerous task, but with a proper plan and clear goal, you can achieve it. We've put together a step-by-step guide on how to get started on digital transformation for your organization.

step 1: Determine your goals

First things first, you need to have a clear idea of what you want to achieve and what digital transformation means to your organization as a whole. In doing so, you will be able to prioritize the areas to focus on. As digital transformation is not an all-or-nothing proposition but rather an ongoing process, it's important to determine the areas that have the biggest impact on your business and focus on them.

Examples of important areas might include technology, both hardware and software, business models and strategies, company leadership and culture, and customer experience.

step 2: Evaluate your current capabilities

After determining your digital transformation goals, take a close look at the current state of your company and learn what areas need to be worked on to reach the goals. Examine your website, social media presence, CRM system, business operation, etc.

step 3: Create a digital transformation plan

Once you identify the areas that should be addressed, you can start creating a digital transformation strategy. But, keep in mind, that a digital transformation is an ongoing process and does not happen overnight. So it's crucial to set realistic and manageable goals and steps while planning your digital transformation.

At the same time, staying flexible will help you navigate in the fast-changing world of technology. Agility and adaptability are the keys to a successful digital transformation.

step 4: Hire the right talents

Digital transformation involves many emerging technologies. So tech-savvy people are needed to oversee the whole project to avoid failure. You can either train or hire technology experts or collaborate with external people with expertise and experience.

step 5: Prepare your organization

A digital transformation is a project for every member of an organization. Get everyone on the same page by communicating your plan and goals. Make sure people understand the big picture as well as their individual roles in the digital transformation journey. Don't forget to provide them with adequate training and tools for their tasks too.

In digital transformation, tools are important too. Some of the common tools that can be used to help organizations go digital are:

• Machine learning
• Data analytics
• AI
• Cloud storage
• Databases
• Anomaly Detection

Hi Cloud partners with major cloud providers and is committed to providing the finest cloud computing solutions and services to help your business grow. We can also create tailor-made digital transformation plans to meet your needs. Get in touch and book a free consultation now.