Industry Trends
Oct. 31, 2023

Digital Transformation in Retail Management

Yariv Chaba

VP of Business Development & International Sales for the Priority Retail LOB
Digital Transformation in Retail Management

With 20.8% of retail purchases taking place online, many brick-and-mortar stores have started to move to an online model. These businesses have adopted a hybrid approach that combines the efficiency of e-commerce with the functionality of physical stores. However, they encounter difficulties while attempting to provide a seamless shopping experience regardless of where customers decide to purchase — on their devices, social media, or at physical stores.

Shopping is no longer limited to physical or digital stores. Consumers embark on a dynamic journey, starting their search in one place and purchasing in another.

Consequently, digital transformation necessitates the implementation of omnichannel retail strategies for the convenience of customers, efficient accounting, inventory management, and seamless order processing.

In this post, we explain retail digital transformation, how data shapes customer journeys, and list five technology trends you can implement to win the digital retail sector.

The Retail Digital Transformation Explained

Until recently, the digital transformation in the context of retail stores meant brick-and-mortar stores adopting e-commerce technologies to help their customers make purchases online instead of having to visit the store. However, the retail industry has evolved and become more sophisticated.

Currently, the focus is on enhancing customer experiences and ensuring that historical data and customer interactions are updated in real-time so customers can continue purchasing from where they left off.
Retail digital transformation can be described as a future-oriented retail strategy that uses cutting-edge technology to improve operational efficiency, enhance customer experience, and scale at speed.

Digital transformation requires a paradigm shift towards adopting evolving technologies that push your staff, data management policies, and IT infrastructure to their most efficient levels. Critical technologies that highlight retail digital transformation include:

  • AI-assisted product recommendation.
  • Self-checkout options.
  • Curbside pickup.
  • Omnichannel support and sales.

5 Key Factors Behind Retail Transformation

Customers increasingly expect personalized experiences and enhanced convenience. As a result, businesses are looking toward predictive analysis, machine learning, and AI-enabled technologies to deliver an omnichannel shopping experience. Here are the five most significant factors that are driving the demand for retail digital transformation:

Business survival and competitive edge

Most successful retailers have already adopted omnichannel shopping strategies, making it critical for others to follow suit. In addition, customers who prefer shopping online not only use websites and mobile applications but paradoxically also visit physical stores more than those who do not shop online. Hence, adopting a future-oriented retail management tool built around an omnichannel paradigm is essential.

Self-service technologies

Customers increasingly prefer adding products to the cart independently and completing purchases without difficulties. This is expected online, of course. However, customers also like being able to shop independently at physical stores. This is when in-store smart devices, like self-service kiosks, help customers seamlessly checkout without human contact.

To enable this, Retailers may install in-store devices that allow an "endless aisle" facility. In this approach, customers can browse more related products, pay, and have products delivered to their homes. Store owners can benefit from reduced employee needs, increased sales, and higher business growth.

Proximity marketing

Studies show that people are open to PUSH notifications from brands they like, especially when they are likely to purchase – for example while walking around in a commercial space. Omnichannel marketing uses data from previous interactions and purchase history to detect customers in a physical area who may be primed to purchase certain products. Sensors can correctly identify customers and send personalized alerts to help them make relevant purchases.

Hybrid shopping experiences

It's important to note that most customers utilize multiple channels before making their final purchase. Some customers may prefer to browse online and visit the store to purchase the product, while others may first see the store, compare prices, and then opt to have the products delivered to their homes. Therefore, it's crucial to map out the customer's journey and record all previous interactions to ensure that they can easily browse through the product catalog, add products to their cart, and have them delivered to their preferred location.

Omnichannel content marketing

Today, retail digital transformation is driven by the need to factor in various consumer touchpoints while publishing marketing content. A headless content management system (CMS) helps retailers create a content marketing strategy that considers multiple marketing channels and uses real-time data to create content that aligns with customer journeys. AI and predictive analytics can help organizations implement omnichannel marketing more efficiently.

The Role of Data in Shaping Customer Journeys

It is crucial to record, map, and analyze data from customer interactions, support tickets, and purchase journeys to ensure the success of omnichannel shopping. Big Data and predictive analytics can be helpful, but prescriptive analytics are even more valuable as they provide actionable insights to help retailers improve customer experiences and increase sales growth. By leveraging data, retailers can shape customer journeys in several ways.

  • Transform your marketing and sales processes to align with customer needs.
  • Enhance behind-the-scenes operations such as merchandising, inventory management, and procurement for better customer experience.
  • Process orders and deliver them on time.

To make this happen, retailers can prioritize omnichannel sales and retail strategy and ensure that they choose a data-oriented retail ERP tool.

The Technology Trends Influencing the Digital Retail Sector

The success of digital transformation in retail businesses can only be assured by using the appropriate technology mix. Here are five important technology trends that are currently influencing the digital sector.

Integration of AI and Machine Learning

Retail businesses are growing by using machine learning to enhance inventory management, warehouse management, shipping, and delivery, and even add or remove product features. Tools that integrate artificial intelligence and machine learning can detect trends that are often ignored, make accurate predictions, and generate prescriptive insight to implement omnichannel business strategies.

Omni-channel retailing

Omnichannel retailing requires a paradigm shift and the adoption of evolving technologies such as predictive and prescriptive analytics. Using an All-in-one, Retail and ERP, centralized management software that integrates the synchronization of transactional data, management of stores, lanes, items, promotions, customers, and employees, and the delivery of analytics to enhance performance, helps business owners implement omnichannel retailing, which results in enhanced customer experience and improved sales.

Queue busting checkout systems

There is undoubtedly a need to install in-store devices that help customers to checkout faster and with less hassle. Introducing Queue Busting checkout, whether it is self-service or not (such as kiosks, points of sale on a mobile device or tablet), can significantly reduce customer wait time for billing by up to 80%, thus allowing customers to spend more time shopping. This enhances the customer experience and provides a competitive edge over online retailers.

Challenges of Digital Transformation for Retailers

While digital transformation offers immense opportunities for retailers, it also presents numerous challenges. Here are the three biggest challenges currently faced by retailers.

Lack of change management

Retail businesses are often not prepared for the rapid changes that are associated with digital transformation. They may not be used to complex technologies or know how to use them correctly. To successfully adopt new tools and processes, it is essential to ensure that vendors offer training to staff and business leaders.

Varying customer needs

Customers are spoiled for choice today, forcing retailers to always be on the edge. Although stressful, this can be an opportunity for retailers to understand their customers better with the help of data insights generated by retail management systems.

Budget constraints

Technological investment can be expensive, and businesses must be careful when making large-scale changes to existing retail processes. Charting an accurate digital transformation map and ensuring that ROI is constantly measured helps make better choices when adopting new technologies.

The Future of The Digital Transformation in Retail

Continuous digital transformation is the future of retail. It all depends on how quickly and tactfully you adopt an omnichannel strategy that works in your favor. Here are the most critical factors you must bear in mind for successful implementation of digital transformation in the future:

  • Choose a tool that helps manage multiple stores and channels from a single interface. This is essential to consolidate online and in-store retail operations.
  • Ensure your ERP has mobile capabilities for both POS and back-office operations.
  • It is not always possible to assume that we will have access to the internet at all times. To ensure that customers truly have an omnichannel shopping experience, your omnichannel retail ERP must sync data without an internet connection ( for example, via cellular networks)
  • Invest in a scalable retail ERP that enhances customer loyalty, bridges online and offline touchpoints, and ensures customer retention.

Contact us today to learn more about how Priority's Retail ERP helps you prepare for the digital future.

The Author

Yariv Chaba

VP of Business Development & International Sales for the Priority Retail LOB

Yariv joined Priority in 2021 as the VP of Business Development & International Sales for the Priority Retail Line of Business. With over two decades in the retail applications sector and experience in consulting for leading retailers, he now leads the digital retail initiatives and business development, focusing on penetrating to new markets.