Digital Transformation of Retail Business
Effective marketing takes account of both online and offline practices to deliver the best customer experience.
It is beyond words of how often I emphasize in my speeches that a successful strategy for the future marketing, especially in retail, lies in the combination of online and offline. To begin with, let’s remember some points about today’s retail marketing: first, despite what everyone says, brick-and-mortar model is not dead. This is all thanks to technology such as Bluetooth beacons, AI, Chatbots, in-store apps, etc. that customers can still immerse themselves in the diverse shopping experience that they deserve. Second, the rise of AI, VR, IoT definitely helps digital transformation for the operations of physical stores. And third, at the end of the day, what matters is what customers can control through their shopping experience.
So with everyone focusing on going online, why do companies still need to retain physical stores? The answer is obvious. Physical retail shops allow customers to go through entirely different experience, some of which are simply unavailable online. Factors such as smell, sound, and human interactions are just hard to replace and will possibly be the driving factor for brick-and-mortar’s survival. In fact, by 2020, it’s estimated that more than 80% of retail sales in the U.S. will still happen within physical stores.
But does this mean online stores are not necessary? Certainly not. To put it bluntly, customers like to order products online due to its simplicity, but at the same time, they also want to visit stores. They want to walk into a store, physically touch the product they want to purchase, see it with their own eyes, and try it on personally, before making a purchase.
What companies need to understand to compete in today’s retail market is that digital transformation is the key. One of the trends of digital transformation is for companies to provide a cross-platform through “omni-channel” shopping experience. With this sort of “digitalization”, customers can browse a certain product in physical stores and they can end up ordering the product online or vice versa, where customers come and pick up something in the physical stores after checking it out online. It is the point when the world of offline and online uniformly merged and simply come together to give customers the best shopping experience that they expect.
Another trend is “Mobile Continuous Expanding”. It is a fact that mobile applications and mobile payment have both contributed to the domination of mobile phone. Various mobile innovation and improved security increase their overall usage and lead to higher value purchases being made through mobile phones. Statistically speaking, almost 90% of stores increase or maintain their mobile technology investment with close to 92% of companies having some sort of mobile-commerce strategy in place.
For now, I think that the death of physical stores is simply nowhere near. Yes, there will be transformation, but not the end of it, simply because shopping to customers is as much about entertainment and engagement as it is about utility. Still, digital transformation will definitely help both online and offline stores to create a uniquely personalized shopping experience for each customer.
