Customer Success Transformation Consulting

Operations Pain Points Solved: Transformation in Retail

This blog is part of a series about the operations pain points that many organizations face as they tackle digital transformation and change management. Our experts provide insights and recommendations based on their decades of hands-on experience and tackle some of the most pressing business and technology pain points.

The profound and rapid advancement of technology is continuing to push consumer expectations forward at the accelerated pace that originated during the COVID-19 pandemic.

Ever-evolving change has resulted in the empowerment of both customers and retailers to embrace it and even expect it. If something is wrong, both employees and customers expect things to change for the better—fast.

Gone are the days when poor service, defective products, or substandard experiences had minimal exposure. In today’s digital world, there’s little tolerance for inefficiencies and oversights. Comparisons with your competitors are just a click away, and one viral social media post or video by either an employee or a customer can have the power to tarnish your brand’s reputation, lower your stock value, or negatively impact your bottom line.

If you’re contemplating a transformation in the retail space, the way to remain competitive or lead in your industry is to enable customer-centric operations in partnership with employee-centric policies.

What are some key tactics for transformation in retail?

There are seven actionable steps to consider for retail technology transformation:

  1. Define a clear strategy: Align your digital transformation roadmap and desired outcomes with the company’s business goals and customer expectations. This includes identifying areas for improvement, setting measurable objectives, and defining a realistic timeline and roadmap to get to your future state.
  2. Embrace a digital and omnichannel approach: Build a connected e-commerce and online presence across multiple sales channels including e-commerce platforms, mobile applications, and seamless integration with online and offline channels. Implement features such as click and collect, ship from store or to store, and unified customer profiles across channels.
  3. Leverage data and AI: Invest in data analytics tools that incorporate machine learning and AI to gain insights into customer behavior, market trends, and operations. These tools can enable informed decision-making for personalized marketing and forecasting and provide enhancements such as customer service chatbots or virtual assistants.
  4. Enhance the customer experience: Focus on delivering exceptional customer experiences by providing personalized interactions, convenient purchase options, and easy-to-use post-purchase support. Utilize technologies such as AI, augmented reality, and virtual reality to offer immersive and personalized experiences both online and in person.
  5. Optimize supply chain and inventory management: Digitize supply chain processes to improve efficiencies, reduce costs, and enhance inventory management. Technologies such as RFID tagging, real-time tracking, and predictive analytics for inventory levels will provide specific, logistical stock information to help increase customer trust in stock reliability and, in turn, increase sales.
  6. Foster a digital culture: Encourage a digital-first mindset among employees and foster a culture of transparency, innovation, and adaptability. Provide training programs to upskill employees in digital technologies and ensure that your organization is open to experimenting with and embracing emerging ideas and technologies.
  7. Collaborate and partner: Seek partnerships and alliances with technology providers, startups, or other relevant industry groups such as non-profits or significant customer communities.

Consider each of these areas as you develop your future-forward plans for transformation.

What are some examples of transformation in retail?

The following four retailers can provide a little inspiration for any organization that is starting the transformation journey.

Example 1: A large global department and grocery chain invested in e-commerce, supply chain automation, and data analytics. They implemented robotics for inventory management, AI for demand forecasting, and machine learning for personalized recommendations for their customers. They also invested in streamlining their online grocery shopping application, curbside pickup processes, and same-day delivery operations to enhance convenience for their customers.

Example 2: A large global athletics clothing and shoe company integrated technology into their wearables and services. They developed an ecosystem that combines the technology in wearable devices with mobile applications to track fitness activities and provide personalized coaching. They pivoted from a business-to-business wholesale model to incorporate a direct-to-consumer model and focused on enhancing their e-commerce and online shopping experiences for customers.

Example 3: An online-only retailer pioneered the concept of online shopping but must continue to innovate to deliver a robust and convenient shopping experience that includes one-click purchasing and a trusted reviews system. This retailer is continuing to expand into other industries such as cloud computing, entertainment, and home assistant devices while carrying over the shopping experience innovations in its original online shopping sector.

Example 4: A cosmetics retailer is leveraging augmented reality and AI within their application to allow customers to virtually try on makeup using their smartphones. They also implemented AI-powered chatbots for customer support and personalization, providing product recommendations and beauty tips.

With each example above, it’s important to note that regardless of industry, these retailers took a customer-first approach when implementing their digital transformations. While it’s imperative to have streamlined, cost-effective operations and organizational processes, customer satisfaction and loyalty drive growth and profit.

What are the future-state benefits to expect from a transformation in retail?

There’s one application that I frequently use for a retailer, and it never fails to impress and delight me. The application shows the current inventory of the product I want, its in-store location, and product details during my search. Sure, it can help me place my order and get it shipped to me. But it can also seamlessly transition to give me directions to my product once I step inside the actual store. It’s priceless customer satisfaction, and it always makes me wish that every retailer had these capabilities within their app. This app doesn’t make me sorry that I allow it to track my location and other details because the payoff is convenience and help in navigating me directly to what I want to purchase. I often choose this retailer over its competitor simply because of the ease of use of their app.

This leads me to the benefits an organization can expect from implementing customer-centric transformation. In a nutshell: competitive advantage.

When customers become familiar with apps like the one I describe above, it sets a high standard of expectation. Customers may start to wonder why other retailers can’t improve the frustrating aspects of their applications since they know that a great application experience exists.

In addition to customer experience, transformation for competitive advantage includes scalability and agility, cost savings through data-driven insights, and cost savings and employee experience improvement through operational efficiencies.

Want to learn more?

The “Operations Pain Points Solved” series highlights common issues faced by organizations everywhere. Read the other blogs in this series to learn about establishing a target operating modeloptimizing the customer experiencetransformation planningmanaging people, and more.


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