Guide to retail digital transformation

The retail space has never been so competitive, and as global brands fight tooth-and-nail for sales and brand awareness, digital transformation has become one of the key ways for retailers to maintain a competitive edge and adapt to changing consumer demands. Explore the benefits of digital transformation in retail and get the lowdown on some of the most exciting digital transformation in retail examples with our simple guide.

What is digital transformation?

Digital transformation refers to the way that businesses use digital tools to revolutionize the way that they do business. Enabling fundamental changes to the way in which businesses deliver value to customers, digital transformation requires the integration of technology into every aspect of the business. There are four main areas of digital transformation: business model transformation (does your company’s business model make sense in a digital-first world?), process transformation (how can digitalization shape and optimize your business processes?), domain transformation (is your business taking advantage of cloud-based systems?), and organization transformation (how can you get your employees on board with a digital-first mindset?). Ultimately, it’s about extracting maximum value from their operations through the adoption of digital strategies.

What are the benefits of digital transformation in retail?

Digital transformation in the retail industry isn’t a cutting-edge concept. This is a trend that’s been ongoing for a while. It’s fair to say that consumer habits and demands have shifted fundamentally towards digital purchases, particularly since the pandemic. We’re not going back to normal anytime soon, and as a result, businesses that choose not to go digital risk getting left behind. Leaders in the retail space are already investing heavily in digital, using their technology and access to data to expand their market share. So, while there are an enormous number of practical benefits to retail digital transformation – from improving customer experience and empowering data-driven decision-making to reducing costs and encouraging collaboration – the benefits of digital transformation in retail may be stated even more simply – without it, your business model may simply not be viable in the not-too-distant future.

What are some of the best digital transformation in retail examples?

There are lots of digital transformation in retail examples that exemplify the way in which data-driven technology is impacting the industry. Here are some of the retail digital transformation trends that aren’t just pie-in-the-sky thinking, but actual developments that are changing the way that retailers engage with their customers in the here and now:

1. Machine learning and business intelligence tools can help you process data and gain actionable insights from that data.

2. Internet of Things (IoT) devices like sensors and RFID tags can be used to track inventory in real-time, ensuring that you are able to make better decisions about your company’s stock levels.

3. Omni-channel commerce and mobile commerce is a hallmark of digital transformation in retail, helping you provide your customers with a personalized way to shop and engage with your store.  

4. Proximity marketing can be used to engage with shoppers at exactly the right time, maximizing your chances of generating a sale.

5. Conversational bots can help customers search for products, while also offering 24/7 customer service support in a cost- and time-effective way.

6. Customers can use augmented reality and virtual reality to view products in realistic, 3D environments before they make a purchase, giving them a better idea of what they’re buying and reducing the chance of a return.

But that’s not all. Beyond these six digital transformation in retail examples, there are plenty of other use cases to consider, from logistics aggregation and enterprise automation to the rise of blockchain for secure payments. Plus, as digital transformation solutions become even more sophisticated, we can expect to see digital strategies revolutionize the retail industry in new and unexpected ways.

How can GoCardless help digital transformation in retail?

Another impactful digital transformation in retail trend is the development of digital payment processes. Although ACH debit historically hasn’t been a major player within the retail space, the rise of open banking has enabled ecommerce retailers to partner with buy now, pay later (BNPL) services, which require payment by installment. In addition, plenty of retailers are transitioning out of a singular focus on one-off purchases, allowing customers to set up recurring orders or offering subscription services. ACH debit is the payment method of choice for these types of digital payment processes, which is why GoCardless, an ACH debit solution that takes payment directly from customers’ bank accounts, could be a fantastic option for businesses that want to extend retail digital transformation to their payment process.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.