Can retail digitalization help retailers overcome the financial hit.
There is no denial that during the last recent years, the retail industry has experienced major disruptions. The best example is the COVID-19 pandemic, which forced retailers around the world to accelerate their digital transformation. Nowadays, another challenge is facing the retail industry in the form of a financial hit. Our current global economy is facing inflation rates that haven’t been seen in years, threatening to plunge us into a recession or a stagflation. To face this new challenge, retailer digitalization is more than ever needed. Retailers must be ready to adopt digitalization in every aspect of their business. They must improve their shopper’s journey and not perceive digitalization as only an IT topic, but rather an IT topic with a commercial purpose based on psychological drivers empowered by the digital tools.
How can retailers make the most out of retail digitalization to face the next financial crisis?
Numerous experiences showed us that retailers shouldn’t rely only on big data to make their digitalization strategy. Numerous retailers think that retail digitalization is about spamming customers with newsletters and inviting them to VR shopping events. However, this is far away from reality. As a retailer, if you want to be ready for the next economic crisis, you must change your strategy from a data-dependent mindset to data-commercial mindset. Retailers should implement digital risk data-heavy solutions and combine it with their clients’ needs. They can achieve their aim by developing automated checkout processes, smart mirrors, quick shopping, drive-by-shopping and investing in meta-verse. The current biggest retail digitalization trend in the industry is quick shopping. The concept involves a super fast delivery that your customers receive after only a few minutes or hours. This retail digitalization trend is driven by urbanization, aging population, smaller households, urbanization and sanitary and financial crises. The second biggest trend is using big data to create larger stockrooms to fulfill online orders and host live-shopping events. These shopping experiences allow the retailers to get enough data and the best strategies to convert prospects. The third trend is the use of Virtual Reality technologies, allowing the shoppers to experience virtual try-ons. Virtual reality technology helps retailers increase prospects’ conversion and build a more trust-worthy relationship with the clients. In the fourth place, we find gamification, which is the process of adding products into video games. This process allowed retailers to make the online shoppers’ journey more fun and boost their sales. Last but not least, we find the Metaverse. It is undoubtedly the most complicated retail digitalization process on the list. This digital environment is an infinite environment that gives retailers endless opportunities to offer to their customers exclusive virtual experiences and digital products and services.
Is it profitable for retailers to implement retail digitization?
There is no doubt that retail digitalization is extremely expensive. However, big retailers that invested in R&D to become pioneers in the retail digitalization have seen their sales skyrocketing and cemented their legacy. Retailers should also believe in the concept of deflationary technology. The concept means that the more technology is used by other people, the less it costs. As an imminent financial crisis is looming, now is the right time for retailers (no matter their size) to rethink their business relationship with retail digitalization.