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A disruptive technological era has put retailers in front of the choice like in an old folklore fairytale: go right and implement digital technologies into your business or go left and remain non-digital. But unlike the fairytale (there was a no-win situation, in both cases, the hero was doomed to death), retailers still possess a choice.

If you belong to the retail industry and are doing your best to shape a long term sustainable business, you ought to learn more about retail digital transformation and what benefits it offers for the industry.

What retail digital transformation is and why it’s essential

To begin with, let’s define what denotes digital transformation in the retail industry. It’s:

  • a radical rethinking of how business is using technology;
  • implementation of new business models that make the line between physical and digital invisible;
  • collaboration at multiple levels to meet the consumers’ needs.


Digital transformation strategy encompasses the complexity of marketing, merchandising, promotions, loyalty programs, in-store processes, and customer experience to bridge the gap between service providers and their customers.

Customer experience

The whole way from inspiration to the purchase, a customer is digitally influenced. The survey held by Deloitte shows that 84% of shoppers used a digital device for shopping-related activities before or during their last shopping experience. Questioned consumers state that they prefer to obtain product information, check their availability and price online rather than spend time on these activities in a physical store.

A wide range of customer engagement techniques is implemented with the help of artificial intelligence (bots for purchase assistance, real-time competitive pricing), augmented and virtual reality (assistance in product trials, elevated in-store experience, etc). By leveraging these technologies, businesses get an exceptional opportunity to provide their customers with personalized communication, information about the product, and automation order placement.

Merchandising and promotions

The fast-evolving capabilities of digital business transformation enable retailers to get information about their customers’ preferences through their search history and convert it into useful insights. If some girl was constantly searching for a white blouse with golden buttons, why not add a button-type searchable attribute to your company’s website or application? Utilizing not only search history but top category pages, customers’ previous purchases, the number of visits to the online store, bigger and bigger amounts of data are generated to make more accurate and relevant recommendations.

Retailers also became empowered to upload cross-referenced information through categories for gathering and creating promotional events. Currency, sex, age, geography, seasonality-based promotions have appeared on the screens of users. Make sure that during the snowing months, you will no longer receive summer apparel promotions in your favorite shopping app.

Though, the future of the retail industry, in this case, is even more promising: virtual fitting rooms in which with the help of 3D scanning technologies shoppers will be able to try on specific items and even a personal digital assistant that will make recommendations based on current trends and customer’s purchase history.

Loyalty programs

Customer loyalty is the thing that makes a successful company or breaks it. And I have some bad news for those who think that plastic cards are still indispensable means of current loyalty programs. Technology in retail moved loyalty programs far beyond paper means — to mobile applications and it’s not limited only by special discounts anymore. Digital transformation in the retail industry has broadened the concept of loyalty programs. Via mobile apps brands became able to facilitate self-service for their most loyal customers, enable them to try the product before buying it through virtual reality, and build a secure and cost-efficient loyalty network platform with reward experience and loyalty tokens.

Pricing and POS solutions

The advance of technology in retail has replaced the traditional pricing methods with sophisticated engines that can display competitors’ pricing, make forecasts, and track price changes. One of such pricing digital transformation examples is shelf-edge technology that comprises e-link or color displays to replace traditional labels. These displays can be used as a tool for communication with customers, show characteristics and reviews of the product, and enable businesses to dynamically change prices in the whole chain of their stores.

Retail banking digital transformation has globally changed the way customers hold financial transactions. As to the 2018 survey only 14% of questioned people stated they still prefer using cash to alternative digital ways of payment.

The speed of the change is far greater than most of us assumed and the majority of the aforementioned technologies for retail transformation already have a practical implementation.

Retail digital transformation case studies

A Finnish chain of supermarkets K-supermarket uses Beacon technology to enhance the online-to-in-store shopping experience of their customers. Once you’re standing in the aisle with cornflakes in K-supermarket, you receive a smart notification in the app “Do you also need some milk?” The research showed that 25% of customers bought the notified product.

The Hilton hotel chain enables their regular customers to book, check-in, and enter their rooms being a member of the Hilton loyalty program in their app.

Introduced in 2016, Amazon Go allows customers to use a virtual shopping cart to track the purchased items so customers don’t have to wait in lines to pay for the order, they are charged in their shopping Amazon account.

Starbucks app constantly upgrades a loyalty program making it more interactive. Users can find the nearest Starbucks, check how many “stars” they have, make orders and payments directly from their phones.

Impressive, isn’t it? And Amazon, Hilton, Starbucks are not the only who are actively using the advantages of retail transformation. Your business can be next.

Wrap up

If you consider embarking on a digital journey, contact us, we’ll help to establish a digital transformation strategy for your business and implement it into reality.

P.S. Don’t be the hero of the fairytale, be the hero of retail.

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