Digital Transformation in Retail Is Only Just Beginning
Have your buying habits changed much in the past year? Odds are good they have. According to a recent report on global retail digital transformation trends, the retail industry has experienced rapid changes like no other. Plenty of consumers are hanging onto online buying habits they developed while their movements were restricted during the Covid-19 pandemic.
That’s probably not too surprising, given the extraordinary events of the past 18 months. The movement from traditional shopping experiences to online commerce was already well underway when the Covid-19 pandemic hit the world stage. Suddenly, societies all around the world have had to adjust to entirely new ways of living and functioning. Systems were rapidly deployed, fine-tuned, and adapted to serve an entirely different system of commerce.
What is the retail industry like today?
Today, the retail industry must continue to pivot to meet ever-changing needs and expectations if they hope to keep their existing and prospective customers engaged.
Opinions vary on the best way to approach this ongoing reality. However, there seems to be one point of agreement. More than 70% of retailers agree that digital transformation will play a key role in moving retail technology into the future.
Mauricio Vianna, CEO of MJV Technology and Innovation, recently sat down for an informative question-and-answer session to discuss digital transformation in the retail sector. In his role as CEO, Mauricio has tremendous depth and breadth of experience working with consumer goods corporations in the Fortune 500. He leads his company in continued efforts to innovate in this area, as demonstrated by creating their newly launched FMCG Hub.
Given the reality of a worldwide shift in buying habits, the insights provided by Vianna and his team are especially valuable. Now that the pandemic is apparently winding down, many retailers are engaging in a postmortem of sorts. They are examining trends that emerged over the past 18 months while also looking to the future. It’s a time of recovery, but according to Vianna, there are also opportunities to innovate and transform.
What are the digital trends that retail brands need to pay attention to in the next six to twelve months?
Mauricio Vianna: We have noticed a transformation of the retail sector accelerated by the pandemic. This has led to different trends such as profound changes in consumer behavior, reduced delivery costs, contactless payment methods, among others.
We are also seeing a tremendous increase in the number of retailers placing an emphasis on the omnichannel experience, which focuses on the customer experience as a whole rather than treating each touchpoint as a separate entity. This guarantees a fluid journey and a holistic view.
The omnichannel approach is also data-friendly. It allows us to extract information and generate insights for future analysis. It also empowers us to enhance the customer experience and add value to the business simultaneously. Companies that have yet to allocate resources to developing or extending the reach of an omnichannel experience risk being left behind as consumers become increasingly picky about the media they expose themselves to.
What changes have taken place in direct-to-consumer strategy over the past year that brands might be underestimating?
MV: DTC requires the right supply chain strategy to make it happen. This is expensive, and it can take time to develop. Brands need to balance consumer expectations with their supply chain strategy. This is necessary to really be able to deliver what they are promising. In the past year, consumer expectations for higher speed and convenience have accelerated.
The days of consumers being content with taking delivery in six to eight weeks are definitely over. Consumers are increasingly unwilling to wait more than a few days. The implications for maintaining a supply chain can be staggering if not well managed.
Some companies are struggling to keep up with the back-end operational structure to deliver the desired experience. Others are concerned about stockpiling unsold goods and the effect this will have on their bottom line. Brands need to find ways to bridge the gap between what consumers expect and what the brands can deliver. Innovation can help with that.
How can digital transformation be leveraged in a retail strategy that is primarily focused on brick-and-mortar storefronts?
MV: Digital transformation can help any company that wants to offer an improved omnichannel experience to the consumer. Brick-and-mortar retail might be how you get a lot of your business. However, omnichannel is still exceptionally relevant for maintaining the relationship. It’s also ideal for keeping your brand on a consumer’s shortlist of trusted brands.
You’ll need to offer different channel choices to consumers. All the options you select need to have a unified strategy. This means that the brick-and-mortar channel should integrate with other channels, such as e-commerce. The integration would allow your brand to deliver a unified and seamless consumer experience.
Additionally, your brick-and-mortar locations can leverage digital transformation to offer an enhanced in-store experience through augmented reality, sensors, and catering to the internet of things as well as gain more efficiency with your back-office operations with automation, robotics, and artificial intelligence.
What digital channels do brands need to pay more attention to?
MV: The fundamental channels I’ll mention are web, app, bot, social media, and WhatsApp. However, different channels are appearing daily. There’s no getting around it. Retailers need to keep paying attention to new channels as they are developed or risk obsolescence. If you already have an integrated strategy and structured process for new channels, regardless of the new channel that appears, your brand will be prepared.
When a new channel does emerge, it’s necessary to understand its role. It’s good to know whether it makes sense in the consumer journey. Additionally, it’s also good to know how to collect the data and how to operate the services of that channel. After that, determine the best approach for integrating it into your brand’s ecosystem as a whole.
Clearly, it would be a mistake for retailers to view the country’s reopening as a sign to go back to ”business as usual.” No matter what drove the change we’ve seen over the past 18 months or so, it is clear that customers value many of those transformations. Instead, FMCG brands should focus on DX strategies that allow them to create better omnichannel experiences while contending with supply-chain challenges that remain.
Digital Transformation in Retail Is Only Just Beginning was originally published on ReadWrite by Brad Anderson.