Differentiating Digitally: Understanding Digital Transformation and its Impact on the Customer Experience
The notion of differentiating your retail brand based on price and merchandising is over. Today, winning customers boils down to the experience you provide. Easier said than done. According to a recent study by PwC, one in three consumers said they will walk away from a brand they love after just one bad experience. That’s why retailers should make digital transformation a priority in 2020.
Digital transformation isn’t just about what you do to your online storefront; it’s about bringing technology into every facet of your business to improve the way you serve your customers.
The State of Digital Transformation in Retail
The good news is retailers are prioritizing digital transformation. NCR recently surveyed retail IT decision makers and learned 82 percent are actively working on their digital transformation strategy. Furthermore, these retailers are investing a significant portion of their 2020 IT budgets to make technology improvements that will impact the customer experience.
However, for those respondents with digital transformation underway, they said the success of their efforts so far varied from the good, the bad and the ugly.
Tackling Transformation the Right Way
Let’s talk improvement. With big steps forward toward transformation, the opportunity for error is high. For example, when retailers deploy more technology in-store, it creates more potential points of failure.
Different devices and functions that haven't had to be managed in the past are now the norm — and the norm is different year to year. When incorporating new solutions into your IT mix, remember that uptime is paramount in delivering customer experience. Luckily, the Internet of Things (IoT) can automate monitoring so that your systems can be repaired before failure occurs.
Successful digital transformation creates a connected experience for both the consumer and retailer. In other words, there should be no hiccups between retail channels. From back office and inventory to a friction-free checkout in-store and online, all digital assets need to be aligned.
Connect your assets.
By strategically utilizing technology, like virtualization, IoT, process automation and analytics, retailers can connect all of their assets and create a single view into every piece of technology and process that impacts operations. Not only does this create an improved customer experience, but it also helps employees appropriately manage processes at every touchpoint.
Bring your employees in the fold.
Speaking of employees, your workforce needs to buy into your digital transformation goals. Education is paramount to ensuring employees understand the importance of taking a digital-first approach across the organization and the impact it will have on improving customer service.
Monitor and measure performance.
Throughout your digital transformation efforts, you should continuously stop and take stock of how well new processes and technology are performing. For example, look at things like:
- Is your inventory management almost always up-to-date or are customers constantly disappointed by in-store stock-outs?
- Are customers able to use their preferred method of payment or are you missing a payment channel?
- Are you able to accurately pull the data you need to measure a store’s performance?
Additionally, it’s important to stay on the pulse of what's top of mind for consumers. As their digital solutions change, your systems need to be both flexible and cost effective to accommodate for new waves of technology — and won’t require a rip-and-replace strategy. Efficient innovation with your existing technology should start with creating an open infrastructure that simplifies the introduction of new innovations and services. Therefore, you can leverage what you currently have in place to make way for the solutions of the future.
Whether you’re in the thick of a digital transformation, or planning to start in the near future, have confidence you're moving in the right direction. You’re committing to expand into different channels, use data and other technologies to reduce customer churn, and ultimately create better experiences with your brand.
Investing in your customers always pays off.
David Wilkinson is senior vice president/general manager of global retail at NCR Corp., a leader in banking and commerce solutions, powering incredible experiences that make life easier.
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