Digital transformation: the indispensable next step for retailers

Digital transformation: the indispensable next step for retailers

Retail is, of all sectors, the most affected by customers’ choices. Thus, the ability to evolve and adapt to new exigencies is crucial. At the time of Amazon, customers have become increasingly demanding, asking for fast and immediate purchasing experiences, available 24/7, both during the day and at night. They want retailers to predict what they may want, and how and when they may want it.

In addition, they want customer care operators to be kind, efficient and quick, not only online but also in stores. We are all very well aware of the fact that the search for products and for all the info needed to convince a customer to purchase them, starts from the web, but this doesn’t always translate into real orders. On the contrary, the report entitled “Internet Trends 2018: E-commerce” issued by Tecla, claims that, although e-commerce as a whole has increased by 16%, globally speaking, it represents only 13% of total retail sales.

Be careful, though: this doesn’t mean that the digitalization process of the retail sector could be neglected or put off. Actually, it should speed up. Digitalization is pushing hard, and customers, as well.

Clients are the real drivers of innovation

Such trend has also been confirmed by the survey entitled The Digital Transformation PACT (PACT=People, Actions, Collaboration and Technology), conducted by Fujitsu involving over 190 business leaders in the retail field and 1600 executives from 14 different countries, Italy included. According to such survey, 47% of Italian retailers think customers are the main drivers of digitalization.
88% of the interviewees have claimed they can feel the pressure of their customers’ expectations and think their ability to change will be essential for their survival over the next five years.

Some additional data: 18% of Italian retailers have invested an amount ranging from 25 thousand and 50 thousand Euros in some sort of digitalization projects which have failed  miserably. Therefore, if you don’t want to throw your money away, you should first find the right direction to follow. So, trends forecasts need to be taken into consideration, but with grano salis, since they often turn out to be wrong in just a few months and  may cost you a lot of money.

4 trends about digital transformation

Broadsuite Media Group CEO, Daniel Newman, has identified 4 possible trends for 2019:  

Multi-channel systems. Data collected by Business Insiders reveal that 3 purely e-commerce brands out of 4 are planning to develop a physical retail chain to be set up in the next 3 years. Retailers need a smart integration of online and off line. Customers will get informed and buy products online and try on or collect goods off line. Websites must be functional and updated. The same rule applies to physical retail points. When buying online we expect to be able to collect our parcels in store from efficient shop assistants who must not look puzzled as if wondering why we are there. Failure to achieve this may lead consumers to go to competitors and become their loyal customers.

Cognitive Computing. When properly designed, AI and chatbots for crm are worth every penny we pay for them. Answering customers’ requests comprehensively, in a few seconds, and maybe comparing data concerning their preferences, means increasing customers’ loyalty.

Proximity marketing. It hasn’t boomed, yet. Despite smart beacons have been around for quite a few years, they are still little exploited. Actually, they are easy-to-use and make the purchasing experience more enjoyable. Thanks to Google Beacon, 2019 may be the right year for them to flourish.

● Cashless/cardless checkout. Once again, we are looking forward to fast enhancements. In Italy, such systems are still little known and inefficient, however, for many consumers this is already the main reason why to shop in one store instead of another.

Digital transformation in Italy

According to data collected by the Observatory for digital Innovation in Retail, 44% of Italian retailers are still defining the right strategy to follow for their digital transformation. 2% claims they simply don’t have one. Basically, 5 shops out of 10 still don’t know what to do. And in 54% of cases it is brands which have implemented a digitalization plan. Apparel is the most active sector (53%), while the food industry comes last (21%). Broadly speaking, in Italy we are still not ready to implement and standardize the available technologies.

Customer centricity

Retailers who have been trying to go digital should take after the customer care model of the most customer-centered company in the world: Amazon. In order to ensure his customers the best multi-channel experience, Bezos has set up Amazon Go. We are talking about a huge lab where customers’ behaviour is thoroughly analyzed and data collected are compared to those gained through the mega marketplace e-commerce platform. When the customer care system, human or not, receives a request from a customer, in a few seconds they will know how much such customer “is worth” and what to reply.

This is to say that, a lack of attention for both customers and their habits will translate into a lack of understanding of their exigencies, no matter which digitalization process we are talking about. And at that point, all the possible investments in technology will be pointless: customers won’t come back.

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To find out more about the digital world, you may read my latest book entitled: “People Are Media” 

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