Prior to digital transformation in retail, the industry focused primarily on delivering a physical good to consumers. However, the product-centric mindset has shifted as consumer expectations evolve, and digital retailing has redefined the approach to CPG, with less emphasis on the products themselves and more on the consumer.
The user experience is now the top driver for accurately predicting whether a person purchases a particular product, but the transferring of physical goods to the consumer challenges the shift to comprehensive digital retailing. Regardless of the growing need for digital retailing in CPG, the trend has impacted suppliers, retailers, and consumers differently than most digitization transitions.
2021’s Trends in Retail’s Digital Transformation
The foundation that will redefine the very nature of retail operations in the future has to do with data: how you collect it, store it, and what you can do with it.
Data empowers retailers to adapt and perfect their operations to meet consumer demands head-on. In an industry that’s no stranger to big, often swift changes in the market, it’s essential to put a strong focus on leveraging data to successfully keep up with the market changes.
In 2019, an estimated 14.1% of retail purchases worldwide were made online, and its popularity was predicted to grow tremendously from there. Now, the pandemic has even changed the type of products people purchase online, with one study showing that around 41% of consumers shop online for goods they would normally buy in-store.
If online shopping started as a way to increase customer access for more products and deals, today even “offline retailers” need to pay a lot of attention to what they can offer in terms of digital retailing.
With this in mind, we can expect to see a few trends as we progress through the year.
- Social Commerce
Social media platforms are now integrated into virtually every corner of online interaction, and the concept of social commerce is on the rise as well, making essential strides in 2020.
It refers to allowing shopping experiences through social media platforms beyond the already-used way for retailers to connect with their potential customers. Facebook has already launched its Facebook Shops which allows setting up online stores and directly sells products to its vast sea of users. TikTok has also partnered with Shopify to make it easier for merchants to reach a younger audience and has said the partnership will include the addition of in-app purchasing features as well.
Soon, social media may not just remain a powerful branding tool for retailers, it will likely become a center of digital retailing.
- Personalized Shopping Experiences
A significant shift in consumer behavior is the customer’s preference for personalized experiences. Simply put, the digital transformation has made retailers more obligated to directly address their consumers’ specific needs when it comes to online shopping.
Personalization efforts, therefore, go outside the scope of marketing. When they visit an online store, consumers expect various levels of a personalized user experience, and in some cases said experience may have a strong say in whether or not they return.
Around 44% of consumers say a personalized shopping experience makes it more likely for them to become a repeat buyer, while 59% of consumers say personalization even influences their buying decision.
- Seamless Experiences
Online shopping increases consumer convenience, as it puts them within a few clicks of any product they want. But at the same time, they want the buying process to run as smoothly as possible.
That means retailers must ensure that their digital transformation lends itself to a virtual retailing experience where customers do not encounter any technical issues from the moment a customer adds a product to their cart to the final stage of the funnel where they make a payment.
Ideally, the purchasing process should also be extremely simple, and allow the consumer to quickly finish the task without jumping through needless hoops. This requires retailers to take a more in-depth look at the quality of their online store, as well as check-out process, and optimize it to meet expectations.
- Bigger Focus on Content
One hiccup in digital retail is that the consumer cannot physically touch the product, a reason why many are still on the fence about a complete contactless digital transformation in retail stores.
Even so, as online shopping’s popularity grows, so will the expectation of high-quality content on retailer websites. Consumers may not be able to touch the product, but retailers can still provide them with sufficient information about it to allow them to make an informed decision:
- Product descriptions
- Tutorials, etc.
Consumers will naturally gravitate towards retailers who offer more digital content because it helps them research the product easily, without needing to go outside of the retailer’s website.
- AI-centric Shopping
Artificial intelligence is slowly becoming an integral part of everyday life, and consumer acceptance is growing as well. According to Salesforce, 62% of consumers are open to using AI to improve their experience, compared to 59% the year before. With the rise in personal assistants like Google Home and Alexa usage, as well as increased adoption of AI across most industries, consumer acceptance will likely grow as well.
Retailers are also relying more heavily on AI-enabled digitization in retail. Companies are turning to Big Data and prescriptive analytics for insights on CPG manufacturing and distribution processes, elevating their ability to respond to consumer behaviors for more accurate product delivery systems.
- Blended Online-Offline Experiences
Even if the consumer makes a stop in-store, they still may expect some form of digital retailing, particularly when it comes to product information. Hosting content regarding products in-stores is inefficient, but consumers who require additional product descriptions could do so easily if the retailer creates the right environment.
For instance, Alibaba’s Hema store in China allowed customers to scan QR codes and access additional product information such as food harvesting, and enabled payment through its app, greatly optimizing the in-store shopping experience.
- Seamless 24/7 Customer Service
Around 43% of consumers expect 24/7 customer services. People not only want to be able to shop for their products at any time, but they also expect the same level of convenience when it comes to their interactions with retailers.
Providing it greatly improves customer retention, as in many cases, the interaction occurs when the customer has an explicit intent to buy but needs additional information or assistance to complete the process. This is another case where leveraging AI could be useful, as retailers can adopt chatbots or even their virtual assistants to help shoppers.
Are You Prepared for These Trends?
Retailers face harsh competition, and these emerging trends will likely only make the competition more difficult as those quick to adapt will move ahead.
If you want to know more about how to leverage digital transformation into your retail platforms, Symphony RetailAl can provide the best AI-centric solutions to help your business grow.