Australian retailers have faced unprecedented changes over the past two years, driven by both changing consumer preferences and sporadic lockdowns brought about by the COVID-19 pandemic. Retailers have had to reexamine their legacy systems and strategies that have shaped the industry for years to maintain their competitiveness.
According to the 2022 retail industry outlook report by Deloitte, the next 12 months will be key for retailers to reimagine and reinvent what the store of the future looks like, bringing traditional physical stores into the digital age. It involves ushering in new ways of thinking and restructuring how retailers conduct business. Consumers are now seeking experiences outside of the home and this offers retailers a unique opportunity to introduce digitally forward retail experiences, driving customer engagement to new heights.
Following are three ways in which retailers can embrace digital transformation, helping them gain long-term customer loyalty and ultimately, grow their business’ bottom-line.
- Deliver enhanced in-store customer experience
By creating a clear point of differentiation using next generation technologies, retailers can optimise their value proposition to customers and enhance consumers’ in-store experience. Introducing initiatives like experiential technologies can allow retailers to connect with customers by providing them with the necessary tools to offer greater engagement, entertainment and excitement. This can be achieved by creating a unique space or opportunity in-store for consumers to connect with each other, boosting engagement and facilitating more enjoyable in-store experiences.
2. Provide frictionless shopping experiences
When it comes to offering consumers a frictionless shopping experience, digital transformation can bridge the gap between offline and online, creating a more holistic, seamless experience.
Analysts at McKinsey noted that the introduction of digital technologies has the potential to double store profitability. They highlighted that tech-enabled “stores of the future” can double retailers’ EBIT margins through streamlining operations and thereby reducing overhead costs, as well as providing improved customer experience and greater employee engagement.
The introduction of technologies that provide customers with greater convenience – from fully automated cashier to lineless shopping – offers the dual benefit of offering a better in-store experience for customers and more efficient operations for retailers. Introducing digital technologies such as digital cameras and AI sensors can do away with the need for cumbersome cashier-manned checkouts, reducing overheads and bolstering profitability.
3. Present more personalised offerings
To align with changing consumer preferences, retailers should consider investing in AI-driven digital technologies that tailor product offerings to individual consumer preferences.
According to the Fujitsu Digital Transformation trends in Global Retail Industry 2021 report, the numbers of retailers embracing AI solutions was already on the rise prior to the pandemic and we see this trend set to continue. The role of automation – including predictive AI – in allowing retailers to deliver bespoke offerings to consumers cannot be underestimated. Using these next generation technologies, retailers can accurately and instantly deliver tailored content to existing and potential customers through engaging and targeted web content, paving the way for customers to return to brick-and-mortar stores.
Implementing systems such as ImagR, an AI-based application – which allows retailers to automate live pricing, discount and product information in real time as customers place items in their shopping “smartcart” – gives retailers the opportunity to harness the power of AI while enhancing its customer service offering. Customers can then pair and shop with their smartcarts using a downloadable app, leading to a “frictionless” shopping experience.
The past two years may have been a challenging period for retailers but as Australia continues to open up and shoppers return to bricks and mortar stores, retailers are entering into a new era and the future looks promising. The key to stimulating profound growth for retailers is clear: embracing digital technologies is truly the way forward.
Clare Burden is head of industry for retail at Fujitsu Australia and New Zealand.