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In this competitive environment, your business needs to be agile and flexible. That's why retail businesses with a digital-first philosophy are winning versus competitors who can't keep up with the changing landscape of customer demands.

How are they adapting to these rapid changes? By harnessing the power of digital transformation. Gartner reported that 91% of businesses are embarking on some form of digital initiative.

But what is digital transformation in the retail industry?

Digital transformation stresses the need for organizations to utilize emerging technology and trends to improve productivity and provide customers more value than ever before.

This means that retailers need to think critically and create new ways for customers to experience their brands from the inside out with technology at every turn.

Retail Digital Transformation Benefits

The benefits of digital transformation in retail are virtually endless, and it's easy to see why retailers would want to embark on this journey.

Here are a few benefits to expect when you start implementing changes:

1. Enhanced customer experience

In the digital age, customer experiences are becoming more interactive and personal.

Companies realize more and more interactions take place on devices rather than face-to-face, and they take advantage of these new methods.

  • Personalization: The era of personalized experiences is here. Brands know that they can't get a foot in the door without collecting data on buyers. Thanks to digital tools designed for this very purpose, it's easier than ever before to provide shoppers with an immersive shopping experience tailored just right.

  • Omnichannel retail: To keep up with shoppers' demands, many retailers have implemented a unified ecommerce strategy that combines web and mobile into one interface. This allows you to manage all your different systems from just one place, providing a seamless experience for customers.

2. Use data-driven insights

Data-driven insights enable marketing strategies to provide more relevant, personalized, and agile content that resonates with your audience more than ever before.

  • Understand buyer preferences: Data analytics is important in the retail industry because it helps you understand your customer's preferences. The more information retained, the better and more personalized their experience will become.

  • Enhance marketing campaigns: Collecting the right buyer data informs your marketing campaigns on what customers value most in a business. This information will help you apply different tactics to generate more sales.

3. Streamline operations

Operational efficiency is a top priority for retailers in this digital age. With so many channels and opportunities out there, it's vital that operations remain efficient to provide an excellent customer experience across all platforms.

  • Use of cloud technologies: Corporations are taking a proactive stance to stay competitive and adopt new technologies like cloud computing. This allows them to improve their operations to better serve customers with what is needed at any given time.

  • Optimize customer service: Digital transformation allows your business to increase efficiency by cutting down the amount of work needed in-person or over email while still providing quality solutions that meet all expectations.

4. Increase adaptability

Businesses can now increase their agility with this new technology and improve time to market while adopting continuous improvement strategies like deployment cycles.

  • Improve resource management: Digital transformation is all about bringing together information and resources in one place so that you can use them more efficiently. It's not just software but also databases with your business intelligence tools—making it easier to make decisions based on what matters most.

  • Inventory transparency: Digital transformation allows retailers to collect and collate data from all stages of production. This shows trends, patterns, resource usage, and waste or bottlenecks in a digestible form that can be used for decision-making by the company's management team.

Technologies Used in Digital Transformation

New technologies are introduced every year, requiring retailers to stay abreast of the trends to avoid missing out on any market opportunities they may present.

Forward-thinking companies need to keep up with the times and modernize their branding. There are several ways that you can do this.

1. Application Programming Interface (API)

APIs are the lifeblood of many companies, apps, and services. In fact, Google Cloud reported 52% of retailers said APIs allowed partners to leverage digital assets at scale, helping them accelerate innovation.

By connecting different parts of their company with data, APIs allow retailers to create innovative product or service experiences for customers.

Implementing an API program is a great way to power business-critical applications and front-end experiences. Here’s how retailers are using this technology.

  • API Portals: API portals are like app stores for APIs. They enable companies to consolidate all of their API assets in one place to promote innovation and make it easier to collaborate with third parties.

  • Mobile applications: Mobile apps are a great way to connect with customers efficiently. They allow people to check on products, read reviews, and contact your support team if necessary.

  • Outside-In approach: The outside-in approach is a strategy that starts with identifying your target consumers and then getting to know their needs. This allows developers to design an optimal experience between the consumer and a company by providing content through a particular API. Also, it prevents organizations for falling into the trap of undergoing digital transformation just for the sake of “going digital.”

  • Citizen development: Gartner predicts that citizen developers (business units involved in the process of building IT products using low-code or no-code tools) will outnumber professional IT specialists by four to one. Organizations that want to stay ahead of the curve should provide the infrastructure needed for non-technical people to innovate.

To ensure success, you need the right tools that will help manage your growth and provide scalability when needed.

Achieve's Apiboost-powered API portals allow your business to gain control over and collect insights into your APIs. No matter where you are in your API journey, they offer guidance at every stage—from discovery to building an API developer portal.

2. Augmented Reality

One of the most popular trends in retail right now is augmented reality, or AR. It's a technology that lets customers view products from different perspectives and get practical insight into how they would look at their home or on their person before making a purchase decision.

Here's how retailers are already embracing this technology.

  • Visualization/virtual tours: IKEA uses AR technology in their application that lets customers visualize a piece of furniture in their space.

  • Color matching: Cosmetic companies like Charlotte Tilbury use in-store displays to show how color variations look on their customers.

  • AR fitting rooms: Timberland included AR mirrors in their stores, allowing customers to virtually try on clothes as they look at their reflections.

  • AR Try-on: Warby Parker, an eyeglass brand, has an app that lets customers see how different styles and frames look on their faces in real-time.

3. Artificial Intelligence

Artificial intelligence (AI) is an important new way to deliver the attentive 24/7 service that shoppers now expect. With AI, retailers can save time and money on customer support while giving their customers what they really want: fast answers when needed.

You've probably come across examples of AI in your own shopping experiences.

  • Chatbots: The reliability and consistency of chatbots make them a popular tool for businesses looking to communicate with customers. They can be used in many ways, including helping seal conversions or creating new sales opportunities by providing assistance when needed most.

  • Automated checkouts: Amazon Go uses a combination of sensors, video monitors, and computers to track their customers’ shopping and charges their accounts once they leave with the items.

  • Smart shelves: The fashion brand H&M uses AI algorithms to analyze receipts, returns, and current stock to evaluate purchases and determine where to allocate its supply.

4. Machine Learning/Predictive Analytics

Machine learning has grown exponentially in recent years and is now used by retailers to understand customer behavior better. It predicts what customers will want in the future based on their past purchases or history with your brand.

With machine-learning data science, you can identify shopping patterns that may not have been visible before. It does this by collecting data from one or more sources and feeding this into a model that helps forecast future outcomes.

Ecommerce retailers have utilized this technology for:

  • Personalized suggestions: Netflix uses its learning algorithm to suggest original movies and TV shows based on your viewing history.

  • Facial recognition: Walmart uses this technology to analyze the levels of frustration a customer experiences and triggers a customer service member to assist them if this level passes a certain threshold.

Still have questions about how the top ecommerce retailers are managing their APIs and digital transformation? Contact an API specialist today.


Ron Huber

Ron Huber is the CEO and co-founder of Achieve Internet. He's an experienced senior executive with over 15 years managing and leading software teams in the online media, Internet, and software development space.

About the Author

Retail Digital Transformation: Your Guide to Benefits and Technologies

In this article, you will learn how digital transformation is redefining the retail industry.

Published: May 23, 2022

6 min read

By: Ron Huber

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