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With the advancements in technology in recent years, companies are trying to keep up with the concept called Digital Transformation. As technology is continuously getting updated, it is essential to digitally transform the product and process to survive the market in the future. 

However, the retail industry's digital transformation is more than e-commerce and online purchasing. It also includes technologies like AI, AR/VR, data analytics, and more to modify retail operations to sustain the competitive market and deliver the best customer service. 

What is Digital Transformation in the Retail Industry?

The main purpose of digital transformation in the retail industry is to digitalize the manual process that assists the employee to work efficiently. The combination of retail and digital transformation is expected to hit new heights. This forecast provides confidence to the retailers that embracing this retail digital transformation will offer them growth opportunities and potential customers. 

Digital transformation in retail is incorporating technology into the retail industry to enhance the existing process and introduce new business activities. They streamline the overall processes to enhance the customer experience, improve operational efficiency, and generate revenue.

Why Retail Digital Transformation is Important?

Roughly every industry is moving toward digital transformation and retail is no exception. Dispending on traditional technology will prevent the business from remaining updated in the current market, fulfilling customer demand, and resolving their queries will become unattainable. 

Retail digital transformation provides unique solutions to each type of business, thus embarking on this modification is just adapting the existing business with added technological advancements.

Some of the reasons to implement retail digital transformation are:

- There is a sudden swift of people using smartphones for calling purposes to use them for other purposes like buying things and making payments. or opting for any service they want. To benefit from this change, retailers brought their business online. 

- Nowadays people are using wearables on a larger scale. Retailers utilized this as an opportunity to send notifications regarding their personalized recommendations to make purchase decisions.

- Physical store owners implement smart beacons that provide notifications to customers who are in the predetermined location around the shop. They help the retailers capture new customers who are in the location by sending them offers and promotions.

How can Digital Transformation Improve the Retail Industry?

The future is going to be digital and internet-based, so digitalizing the shopping experience is mandatory. Some facets of business where retailers are working hard to provide effective support to customers are:

Customer Service: Not only in the physical store, but retailers also approach several touchpoints to resolve the issues faced by the customer. They are focused on providing enhanced customer service through CRM software which also gives insights about customer satisfaction. 

Marketing: Retailers are enabling their marketing strategies, and promotion through social media simultaneously they extract data from digital media. Unlike traditional methods, this helps to understand their customer preferences to a greater extent.

In-Store Experience: Combining several technologies they analyze customer choice through behavior analysis, and they provide personalized promotions to deliver exclusive experience. Providing kiosks and store associates will improve customer retention and loyalty.

Buying: Leveraging the latest technologies like IoT, and AI, retailers can get insights about the customer demand and offer them the buying options and suggestions accordingly.

Supply Chain: Products can be accurately tracked during the transition in the supply chain by implementing the latest technologies. Unlike classic methods, products can be prevented from getting lost or stolen.

Application of the Retail Industry Digital Transformation

With the advent of technology, the operation of the retailers has changed.  Let's explore some of the applications where digital transformation has modified the operational industry.

Self-Checkout Systems

They enable the customer to scan the item they purchased and pay for it without the interference of the store's assistance. They analyze the product barcode in them to provide the price. They cut down the waiting time at the billing counter.

POS System

POS (Point Of Sale) is not only a transactional portal but also combined with the latest technologies is used for gathering sales and customer data and real-time inventory management. As they gather customer data, they provide valuable insight into their preferences and help them efficiently manage inventory by reducing waste.

Personalized Recommendation

Merging AI-driven personalization into digital transformation enables retailers to provide crafted individual recommendations to improve the shopping experience and customer loyalty. This personalization is essential to stay updated on the changing customer demand and market trends.

Branded Mobile App

Mobile applications are available for all the retailers that can downloaded on smartphones. It becomes a channel through which customer receives notifications about the deals and offers at the same time retailers can communicate and promote their products.

VR/AR Showrooms

AR/VR technology enables retailers to provide customers with a digital representation through the digital screen of how their products will look on themselves or in their homes. They can try on the product with the physical item. Virtual reality in the showroom allows you to visualize how it fits your home environment. 


It is a location-based service where notifications are sent to the customer when they enter a virtual geographic boundary. Depending on the location of the store, they send customized notifications such as virtual offers.

Worker Devices

Each employee of the store is equipped with scanning devices that instantly collect information about the product and display it to customers. This improves the overall operation and job satisfaction of the employee.

Future Trends of Retail Industry Digital Transformation

Some of the digital trends that the retailers have to include in the transformation process to grow in the respective industries are listed below. This digital transformation in processes and products is mandatory for retailers to stay updated in the advanced technological market.


IoT development has revolutionized the way how items can be traced in the supply chain with the help of GPS and RFID. IoT has played a major role in preventing and controlling shoplifting where products get stolen in the retail store. This helps the employee create a virtual barrier around the store which reduces the theft. 

Big Data 

Retailers implement big data to manage the vast amount of data to understand the customers precisely. They use predictive analysis to handle the inventory, merchandising, and business strategy. With the help of this, retailers can fulfill the customer's expectations about personalization and shopping.


Augmented Reality offers a distinguished shopping experience. Retailers are adopting AR to improve the interaction between customers and brands. It allows the customer to see the real-world scenario with the digital object projection through a digital screen. This helps to choose the product from their comfort place.

Omni Channel

Customers opting for both retail and online stores are a precious asset to the retailers. So retailers connect and synchronize their digital and physical channels with customers via social media, email, and websites. This helps to provide a smooth shopping experience to the customer.


Blockchain in retail is not restricted only to digital payment but also offers help in tracking the item in the supply chain and data storage in the decentralized system. So retailers are acquiring blockchain technology in their systems to improve efficiency, transparency, and security.


Automation of manual processes will make us even more efficient in our work. It reduces the workload of the employees so that they concentrate more on serving the customer. Automating repetitive, time-consuming, and prone-to-error tasks will prevent us from making expensive mistakes.

Artificial Intelligence 

AI in retail will assist the store operator in deciding the price, forecasting the demand, and optimizing product placement almost accurately. This helps the customers as they can easily find the product they want. They also provide personalized suggestions according to the customer's behavior.

Voice Assistance

Voice assistance is becoming popular with the emergence of voice-enabled devices like Amazon Echo and Google Home. This is extremely useful for people on the go and physically challenged ones. This assists the customer in finding the product, comparing prices, and buying them with voice. 

Challenges in Retail Digital Transformation 

This retail digital transformation has not only assisted retailers in reaching a larger user base but also created many challenges. Some of the challenges faced during this journey are:

Surviving the chance: Traditional business retailers and stakeholder associates with the retailers find it difficult to accept the changes. Clear communication and a proper plan that includes adopting the new system are required.

Complex: Using the latest technology makes it complicated for people with little expertise to travel through this digital transformation. This makes many businesses opt for advice from an IT consulting company

Lack of Manpower: this transformation requires skilled talents to handle the new technology integration. For training the existing workers, we need money, time, and effort which slows down the overall efficiency.

Benefits of Digital Transformation in Retail

Adopting the retail industry's digital transformation offers benefits to both customers and retailers. Some of the remarkable benefits are:

Improved Customer Service: with omnichannel customer experiences and chatbots, customer can resolve their query at any time and receive real-time personalization thus enhancing customer service.

Amplified Operational Efficiency: Incorporating digital transformation in the retail industry, utilizing AI technologies brings automation to the forefront. These upgrades will optimize the retail operations, decrease the waiting time, and mitigate manual work thus resulting in effective and efficient retail operation.

Data-Driven Decision Making: Market insights can be generated by utilizing customer data analysis which can be used to outline a strategy. This can then be utilized by the retail operator to understand the customer and to increase their sales. 

Cost Optimization: With the retail industry's digital transformation, retailers can diminish the cost associated with the labor used for inventory management and other processes. Moreover, installing cloud computing services is a scalable solution thus reducing IT costs.

Inventory Management: They allow the retailer to use this digitalization to optimize and automate the inventory processes which in turn reduces manual labor. Digitalization of Inventory management improves operational efficiency, handles warehouse activity, and also safeguards the stocks from getting lost or stolen.

Efficient Marketing Campaigns: Utilizing the latest technologies like data analytics, retailers can use the collected data to design personalized marketing campaigns for each customer. Identifying the pattern and adjusting the marketing campaigns will increase the retention rate.

Innovation: It amplifies the retailer’s innovative capabilities, and helps them test the new ideas and efficiently scale them by leveraging the agile method, cloud computing, and APIs. These technologies allow the retailer to extract the potential from the insights and use them to stay innovative in the market.

Increased Revenue: Digitalization helps retailers communicate in a better way which creates an opportunity for the retailers to reach more customers simultaneously increasing sales and generating more revenue.

Better Risk Management: They enable the retail operator to handle the risks efficiently by implementing AI technologies and also adhering to the regulations. This helps to safeguard the data from cyber-attacks and theft.

Employee Engagement: It encourages the employee and caters to innovation and collaboration by providing training to the employee to handle the digital environment. This positive work environment to work creatively with long-term success.

What Makes Maticz The Best Company For Retail Digital Transformation?

Digital transformation is an opportunity for retailers to enhance the overall operation of their systems. To cope with the evolving market trends and changing demands of the customer, it is important to get assistance in your digital transformation journey. Collaborate with Maticz, a leading digital transformation company helping you to reach your goals by implementing various technologies that will improve your ROI.

We are passionate about working closely to deeply understand the objectives to deliver end-to-end support to optimize the operation and generate revenue. We continuously work on the areas of improvement to support our retailers to stay at the forefront of the competitive landscape. Contact our experts to get a brief about digital transformation in retail.

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