Digital transformation in retail: definition, challenges, benefits

87% of business leaders name digitization as one of their top priorities. And yet, only 40% have managed to implement digital initiatives on a broader scale.

And that’s a telling statistic.

Sure, you can build an online store relatively quickly, as there are convenient site builders that take a lot of the technical obstacles out of the equation.

But digital transformation in retail is about a lot more than just having an online store. You have to develop a strategy that encompasses the many different elements that go into having a strong digital presence, taking into account your audience’s unique habits and preferences.

But at the same time, the challenges you face are not nearly as significant when comparing them with the potential benefits that digital transformation can offer.

With that in mind, let’s explore what digital transformation is, what the most common challenges businesses struggle with are, and the benefits that can be attained by those that stick through the process.

What is digital transformation? 

Digital transformation is the process of revamping your business practices to include digital technology. That integration of digital tools has to be all-encompassing for it to make a difference, which is why many retail companies are hesitant about making the switch.

The good news when it comes to digital transformation is that not all steps have to be complicated.

For instance, if you seek out the best Shopify theme development agency, you can be sure that your brand will be well represented and that the features Shopify offers will be used to their full extent. This alone can open up a lot of opportunities for your company in the digital world, ensuring that your visitors have a convenient experience when shopping in your digital store and that the values that built your brand remain present in the digital world as well.

But at the same time, you also need to think about how you engage with your customers as a whole and how you can transform those experiences using available digital technology.

That includes not only your website but your marketing plan, your social media presence, and even the type of insights that you gain about your audience.

And because the process is so complex, it’s not surprising that there are many challenges retail companies have to overcome. Let’s look at some of them below.

Digital transformation challenges

42% of shoppers are not planning to return to in-store shopping, even after the pandemic is over. Therefore, overcoming the main digital transformation challenges is now more critical than ever.

Fear of change

No matter the size of the organization, change is always scary. Management and employees can quickly get used to a particular way of doing things, and any changes, even positive ones, will usually be met with at least some level of resistance.

People will have to learn new skills, take on new roles, and expand their competencies. Not everyone wants to take that leap, especially if the current process is relatively effective.

In companies with multiple stakeholders, reaching a consensus on the scope of the digital transformation project can be a challenge. However, the good news is that once the project gets in motion, adopting new practices becomes easier.

Budget

Financial resources are always a top-level concern for companies. When retail sales have plummeted during the pandemic, finding the budget for a complete digital transformation isn’t something that all businesses are willing to do.

However, when you look at the potential that the process can offer, it becomes clear that digital transformation is not an expense but rather an investment.

Complex process

Finally, many executives in charge of a digital transformation get overwhelmed with the complexity of the process. There are thousands of details that need to be considered, and the continually changing digital technology makes the task even more difficult.

However, the good news is that you don’t have to take on the task on your own. We already talked about hiring professionals to handle your Shopify store, and the same can be done for all aspects, including social media, marketing, and brand development.

Digital transformation benefits

Now that we’ve looked at some of the biggest challenges that come with digital transformation, we can look at why it is worth the hassle despite the difficulties.

Changing post-COVID-19 shopping habits

COVID-19 will have an impact on all parts of our lives, even after the pandemic is over. And one significant change that is already taking place is the shift in consumer shopping habits.

The social distancing rules imposed during the pandemic have forced people to get more familiar with shopping online. People who used to always shop in person have now learned of the benefits of digital shopping, and many of them won’t be going back.

So, a digital transformation can help you get in front of this newly-forming audience and make sure that you’re well-positioned for growth in both the short and long term future.

Better customer engagement

Another reason why a digital transformation is definitely worth it is the customer engagement opportunities that it offers. You are no longer limited to the interactions in the store or by having one-way conversations through commercials and promotions.

Instead, you can leverage the digital world to encourage a two-way conversation with your audience.

Using social media, influencers, your website, and content marketing, you can engage your audience in multiple ways, getting in front of them where they like to spend their time and joining conversations in real-time.

Automated processes

Automation is one of the hottest buzzwords of 2020. Companies in retail and almost all other industries are rapidly discovering the advantages of freeing up time and streamlining operations.

Once you go digital, you can automate most order fulfillment processes, which can result in a massive reduction in overhead costs and allow you to enjoy better margins for all sales.

Your team can spend less time on manual tasks and can focus on coming up with new ways of providing the best possible experience for your audience.

Going digital also means that you can collect data and analyze your audience’s behavior, which can help you run more targeted marketing campaigns and reduce customer acquisition costs.

Final words

Digital transformation can be scary, especially if you have been mainly operating as a physical store up to now. But businesses of all sizes are seeing tremendous success with moving their operations online, and today is the perfect time to make the leap.

Even though it does come with some challenges, if you consult with professionals and take advantage of the available digital technology, you can go through the digital transformation process relatively quickly and painlessly.

 

05/01/2021