Digital Transformation of the Retail Industry

Purchasing behavior is changing rapidly and incorporating technology in increasingly sophisticated ways. As a result, retailers must offer a diversified value proposition and customize experiences to cater to individual needs. Digital evolution is the best way for retail enterprises to rethink and change their models.

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Challenges Facing the Retail Industry

The world of retail is changing dramatically. Retailers used to have anonymous, transactional relationships with their customers. Emerging technology now offers tools that deepen the connection and optimize the buying process.

The retailers that win today are the ones that use digital technology to transform the digital retail experience and increase customer satisfaction. Referred to widely as Retail 4.0, these digital transformation initiatives are evolving the retail industry. However, it isn’t always easy to implement new solutions with existing systems.

Some challenges include:

Integrated software and applications used throughout the enterprise permit the free flow of data. Data connectivity enables retailers to create unique customer profiles that applications can use to customize personalized shopping experiences.

Customers are increasingly ordering online and demanding greater product selection and competitive prices. Having a competitive advantage requires digital evolution to leverage the power of data to connect applications, understand consumer behaviors, and meet ever-growing demands.

Supply chains are the mechanism that powers retailing across all sectors. However, breakdowns and disruptions like those experienced during the Covid-19 pandemic paralyzed retail businesses worldwide. 

Digital innovation such as retail IoT solutions enable supply chain partners to prevent issues while informing end-retailers and customers about product availability and shipping times.

Understanding the Retail Digital Transformation Journey

With the accelerating changes in the global market, retail stores are leveraging technology to refine business models, improve customer experiences, and drive revenue. 

But before you start making decisions, it is necessary to understand the various aspects of retail digital transformation.

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Applying Digital Transformation to the Retail Sector

Digital Transformation is already happening in almost every industry and field, including education, healthcare, banking, finance, and media. Organizations are going digital to engage customers, lower costs, boost sales, increase customer retention, and improve employee motivation. 

But what is it exactly? The way we see it, digital transformation strategies require adopting new technologies and improving existing processes to understand and serve customers better. 

Note that there are two parts to this process that include (1) technology adoption, and (2) modernizing and optimizing processes. Both work together to ensure buy-in at all enterprise levels to promote adoption.

AVIO uses strategy, tools, and training in harmony to help business realize their full potential. If one of these aspects is missing, the transformation will not be as effective.

Large retail companies and legacy retailers will find it hard to survive without digital evolution. Technology enables businesses to adapt and serve customers as swiftly as their smaller, digitally-native competitors and take advantage of data produced by applications. 

Once more, digital evolution is not just about adopting new technologies. The changes must start at the strategy level and optimize both front-end and back-end operations. All aspects work together to make the entire process faster, more efficient, and less costly while improving the experience for your customers.

Three Ways to Adapt to the Challenges in the Retail Industry

AVIO’s strategic approach to digital evolution targets the most common roadblocks that slow down a company’s transformation.

Three ways to adapt to the growing challenges retailers face include:

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Employing the Right Strategy

The first big challenge of effective digital evolution is to ensure that change comes from the strategy level, and that processes must be evaluated and optimized. Adding tools to an existing (and possibly outdated) business model will not have the necessary impact unless it is accompanied by a change in the culture.

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Change Management and Adoption

Buy-in from all stakeholders is crucial for a digital transformation to succeed. Management must take the time to educate everyone about the importance and benefits of technological change, and encourage adoption through training and reward systems. Failure to do this may compromise the whole program.

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Choosing the Right Technology

New digital retail technologies are constantly emerging. Choosing the right solutions requires an expert to select the best technologies that align with your business’s strategic goals and objectives.

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Trends in Retail Technologies

Technologies for retail have long evolved past online ecommerce solutions and digital inventory applications into smart, hyper-connected systems that do much more than ever before. Besides adding additional efficiencies, the new shopping experience delivers a personalized shopping experience like never before.

Some of the most talked-about trends include:

Artificial intelligence (AI) and machine learning (ML) help applications perform tasks using human-like “intelligence” that enables them to progressively improve based on the collected information. Given the amount of data collected by retail applications, AI and ML have allowed retailers to optimize buying experiences. In addition, AI-powered tools help managers create forecasts, improve inventory management, and obtain additional data-driven insights that enhance decision-making.

Augmented reality (AR) tools complement online shopping applications to help consumers feel more confident when buying a product. For example, Amazon’s use of AR has lowered return rates from online shoppers.

In addition, accessibility and low-barrier access improve the buyer experience. Recent evidence confirmed this trend with a recently launched an AR program by Toyota that allowed potential buyers to test cars without downloading any additional applications.

Currently, over 2.7 billion people have smartphones, and experts predict this number to increase to 7.3 billion by 2023. Additionally, statistics show that the average mobile phone owner spends almost 3 hours daily using their device

Sales through mobile phones, known as m-commerce, are an important market. Social media platforms like Facebook and Instagram have jumped on the trend by offering direct sales channels on their platforms. Referred to as “social shopping”, these applications enlist influencers and celebrities to promote products. Besides improving conversions, this strategy enables customers to buy using their mobile devices without leaving the platform.

Customer segmentation is evolving thanks to the increasing amount of data available and analytic processing power. Current segmentation trends point to an eventual “segment of one” that enables full personalization. 

Full personalization customizes the shopping experience and improves customer engagement. Recommendations and advertising are tailored to each shopper instead of their overarching demographic. Factors used in hyper-personalization include their shopping and browsing history, location, social media use, and even the weather at their current location.

AVIO helps evolve your retail operations with MuleSoft technology

One of the most powerful aspects of MuleSoft’s Anypoint Platform is how it integrates information, systems, and processes into a cohesive, coordinated whole to increase efficiency, lower costs, and speed up business processes. MuleSoft retail integration solutions can do all of this, and more.


360-degree customer view

MuleSoft integrates information from multiple sources such as marketing, ERP, and POS to create a single view of your customer. Powerful platform tools increase the chance of conversion and help you deliver a personalized customer experience and buyer’s journey.

Omnichannel experience

Customers purchase through various in-store and online channels, including websites, mobile and social media. The AnyPoint Platform can ensure a unified customer experience and smooth transactions across all sales channels.

Automated supply chain management

Amazon has changed customer expectations to deliver customers what they want with shorter delivery times than ever before. MuleSoft technology enables retail enterprises to have a similar real-time flow of information from internal and external sources. This ensures supply chains are smart, agile, and uninterrupted.

"AVIO really helped us to leverage MuleSoft's full potential with this app, but the real ROI was with our ability to take the knowledge we gained from their solution and implement it in future projects."


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Digital Evolution for the Retail Sector

The retail market is constantly changing to adapt to the shopping habits and expectations of digitally-native customers. Traditional retail companies have the strategic imperative of adopting new technologies and evolving their models to meet these demands and gain a competitive advantage. 

Digital evolution across sales channels and supply chains enhances the buying experience, improves customer service, increases sales, and makes operations more productive and profitable. 

AVIO helps digital businesses with a powerful API-led approach that leverages the power of data analytics to adapt to the changing retail landscape. Contact us for a complimentary assessment to identify how MuleSoft can accelerate your digital evolution.