Top Digital Transformation Trends in Retail: 3 Key Areas to Consider

It’s no secret that the retail landscape is more competitive than ever. Today’s customers are in control, and only a personalized, unique retail experience will capture their attention (and open their wallets).

Our world is mobile and digital-first. Customers can buy, browse, and research anytime, anywhere, with just a few taps of their smartphone. Technology-equipped retail experiences, like Amazon Go’s automated checkout, Starbucks’ mobile order, or Audi’s VR showroom, have garnered all the hype.

Today’s retail businesses must adapt to this digitally-driven marketplace, or fear losing customers to those that do. Digital transformation trends in retail require companies to create innovative business models that blur the physical and digital worlds. Retailers must introduce technology into the overall consumer experience by bridging online shopping with data-driven, in-store experiences.

According to one Capgemini study, “Consumers wish to use technology to help them engage with the store at every step of the shopping journey.” However, it goes on to note that “a minority of digital leaders … have implemented relevant digital initiatives in the majority of their stores and realized significant benefits.

It’s necessary for technology and retail to work hand in hand in order to deliver unique, seamless, and exciting experiences. After all, the modern consumer has come to expect this from retail destinations. 

Here are three trends leading digital transformation in retail:

  1. Social Selling
  2. Augmented Reality
  3. Voice Activation

1. Social Selling

One of the leading motivations behind digital transformation in retail is the seamless experience it offers shoppers. Social media has undoubtedly influenced consumer shopping behaviors. Whether it be scrolling through a feed to gather inspiration on growing trends, communicating with friends and family in a version of “word of mouth” marketing, or even influencer campaigns specifically created to share brands and products with consumers, the power of social media has had a major impact on the ways individuals research goods and consume product knowledge.

From a platform standpoint, Instagram and Pinterest have pioneered social retail, furthering their stake in a buyer’s journey. Last fall, Pinterest announced a total revamp to its Product Pins system, adding dynamic pricing and stock information for thousands of pins, making them easier to shop from the site. Many Product Pins feature a shopping bag icon on the photo that links directly to a retailer’s checkout page. In testing this feature, Pinterest reported that clicks on products to retail sites increased by 40%.

Instagram’s Shoppable Posts and Stories features offer a similar function for shoppers, with equal benefits for retailers. For example, after launching shoppable posts, eco-friendly children’s clothing company Spearmint LOVE saw a 25% increase in traffic and an 8% increase in revenue due to shoppers on Instagram.

Social shopping has already proven to be a fruitful strategy for retailers that have implemented it. As social media shopping features continue to grow and develop, this is sure to continue. The ability to take a photo of a dress you see someone wearing on the street or to click on the purse that a social media influencer is holding in her latest Instagram post are the things that are going to keep retail exciting in 2019, to 2020, and beyond.

2. Augmented Reality

Augmented reality (AR), has offered today’s consumers the ability to see, feel, or test a product in person before they feel confident enough to buy it. AR is the technology that overlays information and virtual objects on real-world scenes in real-time. In other words, it adds computer-generated graphics to a pre-existing environment. 

Brick-and-mortar retailers have begun to use AR to establish an interactive customer experience. It’s a smart move, considering that over 60 percent of consumers prefer stores that offer AR experiences. AR has also been shown to drive impulse purchases, with 72 percent of consumers stating that they’ve purchased goods they didn’t plan to buy because of AR.

In late 2017 and early 2018, an initial round of AR features in mobile apps targeted buyers of furniture and home decor, giving them a way to visualize those items in their own home environments. Home-focused retailers like Lowe’s, Anthropologie, Wayfair and Pottery Barn applied these AR functions in-store, using apps to lay branded merchandise over images of customers’ homes, which allow “people [to] better visualize,” says Laura Alber, the chief executive of Williams-Sonoma. 

However, there are signs that AR and VR will be leveraged in stores and could figure prominently in omnichannel shopping and store operations. Recently, Walmart Labs developed an AR-based product comparison scanner for its mobile app that can be used in-store to scan entire shelf sections to compare product details, rather than using a barcode scanner to look up products one at a time. 

3. Voice Activation

Thanks to devices like the Amazon Echo and Google Home, voice search also is on the rise. The Capgemini study mentioned above predicts that within three years, 40% of consumers could use voice search instead of text search via smartphones or websites. 

Voice assistants have captured an important role in eCommerce, too. In fact, 57 percent of consumers who own voice-activated speakers have used them to purchase something. With over 20 million smart speakers in the homes of today’s consumers, they will prove to be a force to be reckoned with in retail. 

Digital speakers can also be beneficial on the shelves of brick-and-mortar retailers. Voice-enabled technology allows retailers to deliver a more personalized customer experience and deliver a true one-to-one relationship. At the same time, the use of voice assistants in physical stores allow sales associates to be more efficient in providing helpful information to customers. 

For example, Calvin Klein implemented touchscreen-enabled Amazon Echo Shows in their lounge areas and fitting rooms that allowed customers to ask Alexa questions about products or play music while trying on clothes. It’s predicted that brick-and-mortar stores will soon incorporate this technology in dressing rooms or displays on the sales floor. 

As small business technology continues to evolve, its impact on the buying habits of consumers will continue to play a critical role in retail. Digital transformation begins with the expectations of consumers, forcing retailers to follow suit. Although technology trends continue to change, one thing is sure to remain the same: business success depends on meeting customer expectations.

This is a guest post from Marie Johnson. Marie is a contributor to Enlightened Digital, UX Designer, and technology writer from New York City. If she’s not writing her latest blog post in her kitchen, you’ll likely find her strolling through Central Park, cappuccino in hand

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About the Author

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Michael Chalberg

Michael has long focused his writing on the world of retail and small businesses. He''s been a part of the KORONA POS team since 2018 and loves helping entrepreneurs find ways to adapt and succeed. In his spare time, you'll likely find him hiking somewhere in the Southwest.

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