How Digital Transformation Will Create the Future of Retail

retail heading with digital transformation

The journey is the destination. In the retail industry, experiences all along the customer journey is what really counts. Retailers need to rethink how customers perceive their products, the experiences that they encounter during their journey from discovery to delivery, and how the post-purchase effect has an impact on future purchases.

Digitization would enable retailers to improve customer acquisition, optimize operational costs and also positively influence turnover and sales margins. It would be the catalyst that will reform the retail industry in the next 10 years, more than it ever has in the past 40 years.

How Digital Transformation Will Mold  the Future of Retail

The millennial customer has access to one billion products at his fingertips. This has turned customer loyalty into an extremely fragile thing that shifts spontaneously. In the wake of this dynamically changing market scenario, retailers need to embrace Digital Transformation with a feverish enthusiasm to stay on top of the competition.

Here are some ways how Digital Transformation will mold the future of retail.

Hyper-personalized experiences

Digital Transformation will enable retailers to sell more experiences compared to products which heighten customer loyalty. These experiences will be delivered with the help of mobile applications, immersive reality, and even robotics. There are three major brands that have already deployed digital transformation enabled personalization in the retail industry – Amazon, Audi & SoftBank.

Read: Top 5 ways to improve personalization in retail with AI

#1. Amazon – A cashless, grab-and-go shopping experience

The ‘no checkers and no lines’  Amazon Go store which spares customers from the hassle of long queues at checkout counters is a fine example. Customers can walk into the store, grab the food and groceries they want and pay as they walk through the store. The bill amount is deducted from their Amazon Go app—a digital wallet tied to the Amazon account.


                                                                        Amazon Go is a store where you can shop and pay with the Amazon Go app

Image Source: Amazon

#2. Audi – An immersive reality shopping experience

In August 2017, Audi sent ripples through the automobile industry by daring to launch a virtual technology enabled showroom. Customers at the VR enabled showrooms can explore the choice of their car in a digitally configured environment. The VR experience gives a fully immersive feel of the car down to the last detail.


                                                                       A customer experiences a digital version of Audi through a VR headset

Image source: Audi Media Center

#3. Pepper – Robot-assisted shopping experience

Pepper, SoftBank’s robotic assistant that helps users navigate vast showrooms, is another upcoming promise of self-service models in the retail industry. SoftBank, the ideator of the retail robot, has reported a 70 percent increase in foot traffic at brick-and-mortar retail stores, where the humanoid was deployed for customer service.


                                                                           Pepper, SoftBank’s humanoid, greets a customer at a retail store

Image source:  Softbank

Digital Transformation-powered Business Models

Digital Transformation will also set the base for many new business models that are impossible in traditional business environments. Today sharing economy, replenishment economy, services economy and personalization economy are the major models that digital transformation is poised to create in the retail sector according to experts. Additionally, flexible and on demand delivery models will also be made possible by digital transformation.

  1. Mobility-enabled Sharing Economy

Airbnb, Snapgoods, RelayRides and Lyft have all ushered a new era of sharing economy. Statista reports that in 2016 at least 44.8 million adults used sharing economy services such as Airbnb or Uber in the United States These sharing services offer users the same convenience and experience of owning a product/service for a transactional cost.

To cite an example, Airbnb spares you the burden of owning a fancy house in an exotic location. UBER, the taxi-hailing service, saves you the cost of owning and maintaining a car.

  • IoT-enabled Replenishment Economy

Statista estimates that by 2020, the world would have 30 Billion connected devices. Each of these connected devices can be treated as a single data source that can tell who the customer is, where he/she is located, what are their needs and much more. IoT sensor powered devices will provide retailers with the intelligence to deliver products to customers directly, just how Amazon Dash works.

Amazon Dash is a tiny BLE (Bluetooth Low Energy) powered button that can be fixed to a washing machine. The dash button allows the user to order for detergent replenishment with just a push of the button. The dash relays the requirement to Amazon which ships the detergent to the customer doorstep and charges it from the customer’s Prime account. Like detergent, Amazon dash also allows customers to order from their millions of product offerings.

  • Flexible delivery models

Most shopping happens on an impulse. Modern retailers do not have much time to retain the attention span of the user. This creates the need for flexible delivery models that will help them tap into the impulsive decisions of customers.

Read: Why Chatbots are the future of retail and marketing

Flexible delivery models like Buy Online, Pickup from In-store (BOPIS), Try-on-in-Store, Ship-to-Home (TOSSH), last mile delivery, etc. all will become mainstream with the help of mobility services. In fact, Nike has already rolled out a Click & Collect model that allows customers to shop online and pick up their package from any collection point of their choice.


Digital Transformation can help retailers re-imagine how customers buy, interact and experience their retail shopping journey. Digital Transformation in every industry, especially in the retail industry, has become a mandate. It no longer a differentiator but, a must adopt business transformation to stay competitive.

To achieve digital transformation, retailers would need the help of a technology partner who can help them thrive digitally. The technology partner can help decipher the possibilities and realities of several mainstream technologies like IoT, AI & ML, Big Data, Data Analytics, Connected Cars and much more.

CS-Ecommerce of Toy Manufacturer


Author : Ganesh Date : 13 Mar 2018