Optimizing the Digital Retail Experience

The current retail landscape is a result of several digital technologies, which allowed the industry to transition from physical in-store shopping to online transactions featuring smooth check-out processes, product search features, recommendation systems, chatbots, and digital experiences.

There are five significant advancements that enabled the digital retail industry to evolve - automation of processes, self-checkout system, omnichannel experience, conversational AI, and Smart beacons.

Despite all the preferences for going digital, customers often want the shopping experience of a physical store, especially when buying clothing items.

Digital retailers are overcoming obstacles like this by using augmented reality (AR) and virtual reality (VR) technology. For instance, Kendra Scott - a jewelry brand - introduced Virtual Try-on, which uses AR and computer vision to allow shoppers to try on jewelry items and preview how they look virtually.

Similarly, Shopify lets retailers include three-dimensional renderings of their products so customers can view them through AR and get a much richer shopping experience.

Smart Beacons are IoT-based wireless sensors that can send signals to nearby devices, such as smartphones. Retailers can install the beacons in strategic locations near their stores and send signals to nearby customers' smartphones to trigger specific actions.

Also, customers can install a store's app and allow retailers to personalize their in-store experience whenever they're in the proximity range. For instance, a beacon near a specific store can send signals to a customer's smartphone to trigger the app to show relevant promotions and events based on where the customer is currently standing.

The above technologies show how the retail industry is becoming more digital-first by streamlining in-store and online shopping experiences.

With big data platforms becoming more accessible, retailers can now collect and analyze a much larger dataset to predict customer behavior. The need for data-driven technology is evident from a recent Gartner report that 65% of investments in 2023 will be in business intelligence and data analytics.

Retailers are also focusing on both online and offline shopping experiences to foster customer loyalty. Amazon Go’s example is a case-in-point: making purchasing from a store smoother while streamlining its online platform for a wider reach.

In addition, the prevalence of IoT devices is allowing retailers to improve customer experience by bringing more personalization and making their internal operations more efficient. Mordor Intelligence predicts IoT in retail to have an annual growth rate of 11.30% between 2023 and 2028.

For instance, retailers can track the complete supply chain dynamics through IoT devices by monitoring shipments, accidents, storage, arrival, and dispatch times to ensure a smooth delivery system.

Inventory management is improving with automation technology that allows businesses to keep track of their inventory in real time and avoid stock shortages. It can use real-time customer data to forecast demand and accurately tell retailers about future inventory requirements.

Retailers can now use conversational AI to improve digital merchandising by designing in-app chatbots that help customers with their search and provide 24/7 support to resolve issues.

Moreover, blockchain technology is changing the way retailers manage supply chains. The Gartner survey reports 48% of IT executives plan to implement blockchain in retail by 2025. Through its ledger-based mechanism, blockchain lets retailers record all inventory transactions, orders, loans, refunds, etc., securely and chronologically. This helps coordinate different activities more effectively with a traceable chain.

Finally, as discussed above, retailers can use AR and VR to let customers try different products in their environment and merge the in-store physical experience within a digital setting. The digital world offers vast opportunities for innovative campaigns and immersive experiences, enhancing consumer engagement and storytelling in retail.

For example, the website implements virtual queueing that holds customers’ places in line as they shop for other items while giving estimated wait times to check out.

Similarly, customers can use the “buy now” option to directly buy from the product’s page instead of going through the check-out process.

It also makes product search easier by displaying items that customers frequently buy and showing popular purchases in the search results.

They also introduced the AR feature, which lets customers see what a particular item would look like in their home - for instance, how a table would fit in their living room. And the virtual styling feature helps customers create custom outfits with different variations.

Amazon’s user-centered approach is giving a tough challenge. The latter’s success is evident from the fact that 89% of US buyers prefer to buy from Amazon instead of other retailers.

Although Amazon’s website has several features to ensure a smooth digital shopping experience, the fundamental ingredient is how Amazon focuses on a customer journey map through Amazon Ads. This includes facilitating online purchases that seamlessly integrate with in-store shopping, enhancing the overall customer experience.

The map begins with an awareness stage where the customer discovers different brands. Next comes the consideration stage, where the website allows the customer to gather information about a particular brand.

The customer decides whether to buy from a particular brand in the following stage. Lastly, the retention stage involves building long-term connections with customers and encouraging brand loyalty by offering several benefits, such as discounts, gift cards, vouchers, etc. Amazon Ads provides the tools to help retailers build a complete ad campaign, such as Sponsored Brands, Sponsored Displays, Stores, etc.

The retail industry is going through a rapid digital transformation. With new technologies evolving constantly, businesses must ensure to incorporate them into their operations to improve customer experience.

They must invest significantly in automation using state-of-the-art AI and IoT solutions and strive to streamline a customer’s in-store and digital shopping journey, especially in brick and mortar locations. The primary focus must be to understand and satisfy the customer’s needs and ensure they get a tailored experience.

Lastly, it’s essential that retailers continue to innovate with new tools to remain ahead of the competition.