What is digital transformation in retail and why focus on customer experience

COVID-19 has greatly affected non-food retailers: there are hygienic restrictions, lots of brick-and-mortar shops have been closed, and the number of walk-in customers is below average. In this situation, offline retail stores are facing the choice of either going out of business or embracing digital transformation.

Digital transformation, in general, is the acceptance of new technology in order to cut business expenses and attract more customers. In retail, however, this term has a more narrow meaning, which is to attract customers by personalizing the service and diversifying the points of sale. And this model works perfectly — it’s been proven by giants like Amazon, Google, Apple, Netflix, Uber, Airbnb, and others.

In this article, you’ll see why digital transformation in retail is necessary, and how to improve your business with modern technologies.

Some perks and challenges of going digital

Offline retail is limited by nature. The only way to get more customers, grow market share and boost revenue is to invest a fortune in opening new locations.

At the same time, online retailers can sell products around the globe with less expense and work with hundreds of customers simultaneously.

These differences highlight the benefits of online retail. But one of the advantages offline stores still have is a personalized approach to every customer. A good salesperson can sell just about anything by understanding what their customer is interested in.

That’s why the goal of digital transformation in retail is not only to migrate online, but also create a virtual copy of a perfect salesperson and treat every customer individually — in other words, to push the online customer experience (CX) to the highest standard. To do so, the retailer must use modern solutions: cloud services, artificial intelligence, data analysis, and mobile technologies.

Before digital transformationAfter digital transformation
Variety of products- /++
Fast shopping experience- /++
Worldwide presence-+
Useful content and reviews-+
Individual approach to every customer++

Businesses that embrace digital transformation enjoy all the perks of online while preserving an individual approach.

A side effect of digital transformation: Customers demand content

Since the in-person, hands-on sales experience is out, the best way to convey a product's features online is to deliver content; in other words, the customer will need photos, videos, and detailed descriptions to make a decision. Therefore, to be successful online, a business has to generate tons of helpful content and depict the product in the best possible way.

But take note: creating just any kind of content won’t do the job. It should be designed in order to help customers through the sales funnel. Here are some of the most important stages:

  • At the awareness stage, the customer gets to know your brand and products from ads, word of mouth, etc.
  • At the interest stage, the customer is interested enough to do some research; at this point, detailed reviews from other customers are especially helpful.
  • At the decision stage, the customer decides whether your product suits their needs.

Considering the intensity of online competition, your content should also be genuine and creative. If you want to get an idea of the best practices, look at what big brands do:

  • Apple hires artists to shoot short movies and makes beautiful photos with an iPhone to demonstrate its camera quality.
  • Kalashnikov Group (the manufacturer of the famous AK-47) brutally tests their own products on camera to show their durability.
  • SpaceX, Tesla, and other companies managed by Elon Musk showcase all the nuts and bolts of their products to inspire people with their innovations.

Do you see something in common with the above examples? All three companies demonstrate and visualize the benefits of their product using videos. Other possible formats that help to convince and sell in ecommerce are 3D models, 360 videos, galleries with hi-res photos at different angles, and augmented reality (AR). For instance, AR has become a go-to technology for beauty brands and allows shoppers to try on different products from the comfort of their sofas.

By providing such engaging content at every stage of the funnel, companies build authentic online customer journeys and turn visitors into buyers. And this all ties back into the most important part of digital transformation: the CX (customer experience, remember?).

What is CX, and why does it matter?

The CX describes the quality of customer interaction with every funnel touchpoint. These touchpoints create a flow of users from awareness to buying. The CX is considered to be good if a customer can find, order and receive a product and get all the necessary support on the way.

It's easier to understand what a good CX design is by describing a bad one:

  • a site or an app is loading slowly and working with lags;
  • there is no mobile version of a website or a separate app;
  • a website or an app has a poor UX/UI: the font is too small or too large, the images are blurry, and the buttons are too small to hit.

Remember: the CX has nothing to do with the product; it's only about the quality of impression at the funnel’s touchpoints. Your customers must be convinced that they found the best deal, and this product will definitely satisfy them.

To build a good CX, you need to hire professionals who will test your customers’ journey, find bottlenecks, and help to get rid of them. But before you start spending money on CX consultants, you can take some steps to improve CX yourself. Here are five tips to do it:

1. Focus on mobile

Most people have mobile phones and use them more than PCs and laptops. Make sure that your mobile site is working correctly and doesn’t lag, even on earlier phones.

Also, make sure your website loads quickly, at least with a 3G connection. Google has proved that every second counts. For example, BMW made its mobile website load two seconds faster and got four times more orders from mobile devices. You can test your site loading time with Pingdom or Pagedetox, a free service created by Uploadcare.

2. Collect data about user behavior

You need to know what category of products your users are looking for, what they purchased last time and on what device, and at which point they left your website or app. With this data, you can make the most relevant and personalized offers and convince them to come back. According to an INNOVID survey, 29% of shoppers are more likely to buy via personalized ads.

Don’t forget to request your customers’ emails and notify them about sales on products they’re interested in. Use general data as a marketing tool: feature “Top selling products” and “You might like” offers based on their previous experience.

3. Create useful content

Offline stores have shop assistants and consultants, not just because they can convince the customers to buy, but because they can genuinely help them decide what to buy. If your online customers are struggling to make a decision, they will search for an article or video which will help them. And you’d better have them on your site.

There are two types of useful content:

  • Engaging content is helpful, funny, or inspirational, but not directly connected to your products. For example, Walmart has a corporate blog with good news about the company.
  • Shopping-related content is all about the products, but still helpful. For example, it can be an article on how to choose a carpet for a specific room.

Great content can generate traffic by itself. For instance, if your customer needs a vacuum cleaner and doesn't have any recommendations from friends or family, they’ll probably look for some guides on how to choose one. So, if you create how-tos, product reviews, and general tips on cleaning, you’ll probably get their attention, and attention leads to more sales.

If you have some creative ideas and a few extra marketing dollars, you can even shoot videos and demonstrate your products in action. But don’t forget to optimize your content so the customer won’t be annoyed by slow page loads or placeholders instead of images.

4. Shorten the path from visiting your site to completing a purchase

In the best-case scenario, there will be only three pages: product page, shopping cart, and order confirmation. Make all the necessary buttons clearly visible and big enough to tap or click on the first try. It's a good choice to let customers order things without registering on your site and verifying their email.

Also, you need to take care of image optimization: no customer wants to wait to see a product photo. Images, by and large, are the most data-heavy part of any website, and Google proved that slow loading increases the likelihood of customers leaving the site. It’s vital to keep the loading time under five seconds, or you may lose 90% of your potential customers.

5. Bonus tip

Give your customers the ability to track their order status in the app or on the website. They’ll trust you more and won't annoy your salespeople with questions like “When will it be shipped?” Simple statuses like “Processing/Packaging/Delivery” will be enough.

Is that all you need to know about digital transformation in retail?

No, this is like 5% of what we know and use to help our clients. CX is definitely vital for ecommerce, and improving it is key to increasing business metrics like traffic and cost per lead (CPL). But, if you’re only looking at improving your CX, you may have some other flaws in your business model.

Learn how to boost 11 core retail metrics through enhanced online customer experience.

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Infrastructure for user images, videos & documents