Retail organizations are being swept up by digital transformation. If you want your organization to stay in the game, you need to embrace digital — and the data that drives it as well.
The winners are the retailers who use data to create a better customer journey, transform the entire shopping experience in a meaningful way, and draw insights from the data they’ve collected.
A number of retailers are already in the midst of this transformation. Nordstrom recently purchased Trunk Club, which has showrooms in major cities but is mostly known for its online presence and personalized style advice. Sephora — considered a disruptor in the beauty industry — has its own “Innovation Lab” and numerous mobile apps for customers.
What Digital Transformation in Retail Looks Like
Digital transformation in retail can look messy at times. Sometimes it’s because of the hold legacy systems have on organizations, but sometimes it’s because retailers are resistant to change. Many of the established brands are realizing that the tactics that have helped them become industry leaders no longer are enough, and they need to look for new ways to meaningfully engage with constantly evolving customers.
For the companies that are truly focused on making the proper changes, though, the transformation to more digital technologies can look much more structured. Transformation can prove to be a difficult process, and retailers might try to do too much too fast. That can drive customers away — not because of the changes, but because the changes don’t give them a good overall experience with the company.
But when done properly, digital transformation can lead to tremendous success. Sephora’s approach illustrates how you can make deep connections with customers. The retailer has a Beauty Insider program that allows customers to create profiles that they can access on mobile and desktop computers as well as tablets located in-store.
The personalization benefits Sephora, which gets valuable customer data and multiple touchpoints, and the customer, who gets individualized beauty tips, product suggestions, and loyalty rewards.
3 Ways to Give Customers What They Want
Here are three things retailers can do to offer customers a personalized experience and harness digital transformation:
- Don’t Just Collect Data — Use it to Gain Customer Insights
One of the biggest challenges facing retailers is the skills gap between analytics and insight.
Although programmers can set up ways to collect and provide data, just having the data does retailers little good. The data has to be analyzed, and the insights drawn from that analysis have to be used to make changes that will improve the customer experience.
As digital technologies continue to evolve, and customers continue to want a more personalized and fulfilling experience, retailers must change to meet consumer demand.
- Know Your Customers to Create a Personalized Journey
Retailers have many opportunities to find new ways to use digital technologies to create a better customer journey. To personalize the journey, retailers need to understand their customers, what they want, and what platforms they want to use.
The easiest way to do this is to ask customers what they want. People like to know that their opinions matter and that their voices are heard. Short surveys and other ways of getting customer feedback, both online and offline, can have a high level of value for companies.
By learning about customers, retailers can personalize the customer journey from beginning to end. And customers who feel as though they matter are much more likely to come back than customers who have a poor experience or don’t feel valued.
- Cater to Customers to Create a Seamless Experience
Put together agile teams to work toward the seamless merging of the online and offline customer shopping experience. The goal is to give the customer a smooth journey.
For example, a customer browsing merchandise on his smartphone can put items in his cart and complete his order on his laptop later. When his products arrive, he can go to the store to exchange an item if he got the wrong size. In all, he has a smooth, easy experience.
By giving customers what they want, retailers can compete with upstart businesses that are getting more attention. Some established companies often get pushed aside when newer businesses hit the scene, but using digital technologies to stay relevant can make all the difference.
Next-generation retailing is here, and some companies have already moved much closer to a completely integrated experience. Customers can try on clothing virtually at Neiman Marcus, for example, through use of a “mirror” that allows them to take a picture of themselves, upload it, and see what they look like in different outfits.
Retailers who fail to embrace digital technologies and personalize the customer journey will face an uncertain future as their more digitally oriented competitors surpass them. Fortunately, it’s not too late for even the most staunchly traditional companies to make changes.
To learn more about implementing digital transformation across your organization, download our whitepaper, “Getting From Zero to Digital: How to Future-Proof Your Bottom Line Through Digital Transformation.”
This article was co-authored by Toby Hawkes. Toby is a Master Practitioner at North Highland. He has over 20 years of experience driving strategic change, growth and improvement programs, focusing on the retail and consumer products industries. His passion is ensuring that the customer and shopper remain at the center of all strategic and operational decisions.