Digital Transformation and its Impact on the Retail Industry

In the last few years, there has been a radical change in the use of technology and to improve performance, retail enterprises have begun looking at their existing business models to strategize, and add innovations which are digital-inclusive. While several digital innovations are changing the pace of the retail industry most of them are centered around ‘engaging customers’ and ‘upgrading operations’.

Retailers are also investing in the right infrastructure and technologies such as chat bots, cloud artificial intelligence, and recommendation engines that enhance the sales capabilities of the in-store associate towards delighting customers. Personalization, for example, plays a pivotal role in enhancing customer experience but not stopping there, digitalization offers added perks such as data intelligence and streamlined processes that in turn help to reduce costs and improve efficiency across the transactional cycle. By adopting digitalization, retailers will experience cost savings and operational efficiency across all areas of their business starting from sourcing to pricing strategies, inventory planning, employee training, and finally customer engagement

Given below is a table which outlines the challenges and opportunities of digital transformation:

Retail Consumer Journey Digitally Challenged Digitally Transformed
  • One-way communication
  • Shoppers know as much as sales people
  • Customers are driven by loyalty and brand awareness
  • TV advertisement, banners used as the medium to promote products
  • Mobile devices with intelligent mobile apps which infuse personalized shopping experience
  • Transparent dynamic pricing
  • Continuous availability- Cloud
  • Big Data and Analytics
Product Delivery
  • Ambiguity with regard to customer preference
  • Product journey traceability
  • Limited payment options
  • Return and exchange policy dependent on trust and loyalty
  • Alternate payment mechanisms
  • Better exchange and return policy
Post Purchase
  • Servicing sporadic and undependable
  • Low user influence
  • Self-Service
  • 360 degree customer engagement

Digital transformation should be strategically designed to help in communication to evangelize and bring innovation into the business. There should be a change management strategy in place. Finally, retails must build partnerships, so they can leverage the strength of their partners to expedite transformation.


  • Diksha Sinha in working with Trigent Software as a Executive Digital Marketing. She provides marketing support across areas such as SEO, social media, Google analytics and content production.