In 2012, most people thought that physical retail was dead. In 2016, an Atlantic article talked about the retail apocalypse and emphasized the tragedy of store closings. Today, everyone is talking about the metaverse and our transition into the digital world.
But is digitalization really going to take over our brick-and-mortar stores?
Experts in the retail space say now, more than ever, retail is undergoing a renaissance and a dramatic transformation. Although we’ve already seen some significant digital shifts, in-person experiences are making a comeback — especially with the integration of technology.
There are three pillars for driving digital success within the physical space. The first is customer-driven innovation. You shouldn’t innovate simply for the sake of it, but brands should always look for the unmet human need and cater their developments with the customer in mind.
The second pillar is ensuring your digital strategy is people-centered. In the areas of physical retail, hospitality, restaurants, and travel, people are generally at the center of a transaction. So, you must harmonize technology with the human element. Additionally, Holden Bale explains that “employee adoption is mission critical to the success in any case for technology and physical spaces, regardless of what the technology is.”
The final pillar is crucial: don’t take a one-size-fits-all approach. Retail is contextual — you won't get by with smart shopping carts or pickup lockers in every case. Integrating technology into the customer experience requires varying strategies and technologies within your brand, but testing and learning what works for your brand, your customers, and your employees will help you reach success in both the digital and physical retail spaces.
Your brand should exist in more than just the physical space. Finding a balance between the physical and digital world will get you results, and many brands achieve that balance with great success.
Online shopping is dominant for stores selling clothing, accessories, shoes, and various other products. Although Vans has major success through online retail, they’re still working to drive foot traffic into stores and create an enjoyable experience for its customers. “We have stores with skateboarding displays,” Sid Arigapudi explains, “where you can come in, and you can build a skateboard and have that conversation and shop that new collaboration that's come in with a new musician, or skateboarding champion, or sponsor. So, we want to drive those experiences. And we've seen our customers react to that in a positive way.”
Although Domino’s sells a very different type of product, they reflect a similar sentiment. The brand got its start focused on its store presence without concentrating much on technology. But in the early 2000s, when they began using a new recipe, Domino’s followed up with in-store transformations. They updated their physical stores, created pizza theaters where customers could see pizza being made, and began investing in technology. Thus, the pizza order tracker was created. Jason McMann explains, “We also look at how we can use technology to improve that store experience. Sometimes, I think that's the best use of technology. How can we use technology to improve a team member in the store’s day-to-day job, so they can focus on making that pizza [and] focus on talking to the customers as they walk into the store? So it's gotten to the point where now carryout is actually a very large portion of our business. And people still think about Domino's as a delivery company, but actually, [we’re] the top carryout pizza company in the state…I think technology is a key part of that.”
The future of retail isn’t just about technology. Nicole France says, “It’s about how technology facilitates the kinds of relationships and interactions that [people] want to have.”
Robots, drone deliveries, and pie-in-the-sky technologies get a lot of attention, but it’s the smaller-scope technology goals that will help a brand advance and build new experiences. When your technologies empower employees on the frontlines, help develop the customer experience, and improve your business’ services, that’s how your brand will thrive through the integration of technology and the in-person experience.
With the expansion of automated technology, digital transformation is essential for acclimating to various changes in the digital space, including evolving consumer interests and operational strategies.
Yet, digital maturity — the process of responding to these developments — involves applying organizational changes to a business’ infrastructure.
Many companies lack the fundamental framework required to modernize operations. As a result, 80% of businesses fail in their digital transformation efforts, according to Holden Bale, GVP and Head of Commerce at Huge.
So, how can you streamline digital transformation to enhance your organization and stay on top of trends?
When developing a digital transformation strategy, it’s important to view it as an ongoing process. As Jarid Lukin, the Global Senior Director at Mars, says, “there’s always another phase, another project; you have to keep iterating and evolving.” Once you acknowledge this factor, you can begin to structure your business for the future.
The 4Ps framework involves assessing your company’s digital capabilities in terms of people, processes, platforms, and performance. Holden Bale notes that businesses must take the initiative “to own, operationalize, and evolve [their] digital capabilities.”
To execute this model in its entirety, organizations should form strategic partnerships with experts who can implement forward-thinking processes to optimize performance. It’s also crucial to adopt innovative platforms suitable for your functional strategies and customer needs.
By taking an integrated approach to digital transformation, you can develop a course of action that aligns with your business goals.
One of the core components of digital transformation is the integration of new technologies and platforms. But, with these new programs come significant investments, so allocating and prioritizing your resources is paramount.
How can you determine the most profitable technological investments to strengthen value in your company?
Jarid Lukin advises incorporating short-term and long-term financial strategies into your business plan. A short-term strategy includes considering digital investments in terms of your value proposition. Evaluating potential benefits such as first-party data or consumer insights drives ROI. In the long run, upgrading platforms to serve your customers better and secure your resources may be beneficial.
The final stage of digital maturity is determining which aspect of your business to reconstruct. The three most common forms of digital transformation are omnichannel abilities, digital finance, and business model optimization.
With an omnichannel approach, you can utilize digital automation to expedite product deliveries and manage your inventory effectively. Digital financial transformation entails converting website traffic into new leads to maximize top-line growth. Enhancing your business model requires shifting from manual to digital processes. Russ Barnes, General Manager of Digital Business at BSN SPORTS, maintains that the “digital world has a lot more customer touchpoints than the one-to-one relationship you might have in the analog world.” Hence, it’s critical to understand how to expand your reach.
You can construct the best path forward by approaching digital transformation with practical and progressive strategies.