June 7

The ultimate guide to digital transformation in retail

Digital transformation in retail is booming. What is it, and how can digital transformation help your retail company succeed?


What do omnichannel marketing, personalized digital experiences and augmented reality all have in common? They are all facets of digital transformation in retail.

Today, the percentage of retail sales occurring online has more than doubled from ten years ago and continues to increase. Retail businesses that thrive adopt digital transformation strategies, which means it’s crucial to understand and apply them.

So, to start, let’s define digital transformation in retail.

Key takeaways:

  • Digital transformation is how organizations leverage the latest digital technology to grow their business.
  • Three reasons for digital transformation are: the competition is already doing it, in-store shopping is no longer the primary method of selling, and technology is an active part of a buyer’s journey.
  • An omnichannel marketing strategy should present a brand’s content and message consistently across all the channels, whether in-store, through email, on the website, mobile app, social media or any new medium that emerges in the future.
  • Augmented reality (AR) is an interactive, real-time, 3D experience that combines a physical view with computer-generated elements.

What is digital transformation in retail?

Digital transformation is how organizations leverage the latest digital technology to grow their business. The company strives to incorporate these tools in all areas, including:

  • employee software (e.g., customer service tools like chatbots)
  • data structuring and analytics for data-driven decision-making
  • any customer interaction with the brand (e.g., social media, website, in-store)

Digital transformation in retail is how businesses that sell products or services apply these technologies to thrive and have a competitive edge.

Why digital transformation in retail matters

There are at least three reasons digital transformation in retail merits serious consideration:

  • The retail giants are already doing it. Brands like Walmart, Amazon, and Apple are creating pleasant and personalized digital experiences. Retail companies must match that customer-centric focus to retain and gain buyers. 
  • In-store shopping is no longer the primary method retailers sell to customers. Starting in the Spring of 2022, CVS plans to close approximately 300 stores each year over the next three years. These closures represent almost 10% of CVS locations as the drugstore chain turns away from retail toward health care services. CVS recognized consumer buying patterns as a reason for the change and added that it is “rapidly expanding [its] digital presence.” As this example highlights, adopting digital transformation isn’t just about thriving. It’s also about surviving.
  • Technology is an active part of the buyer’s journey. With a mobile device, a customer can “enter” a store from anywhere in the world. Most ads customers see are on social media. A buyer can virtually try on an outfit or place a piece of furniture in their room before purchasing.

Four digital transformation approaches to employ

Now, let’s examine four ways to apply the latest digital tools in different areas of the retail business and see examples of companies that have been successful as a result.

1. Omnichannel marketing

What is omnichannel marketing? Omnichannel marketing delivers your brand’s product and message across many digital channels and media. 

Your omnichannel marketing strategy should present your content and message consistently across all the channels, whether in-store, through email, on the website, mobile app, social media or any new medium that emerges in the future. Keep in mind the devices used by your customers (e.g., phone, tablet, TV) and adjust the layout accordingly so your message remains impactful. 

Example: Target partnered with Pinterest to incorporate Pinterest’s Lens into their mobile app so individuals can use their smartphones to take a picture of a product they like and see if the Target app shows them a comparable item available for purchase. Target increased its sales by almost 10% using this omnichannel marketing strategy.

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2. Employee Collaboration and Communication

Interdepartmental collaboration is necessary for a company to deliver consistent, quality experiences to customers. And with many companies offering work-from-home or hybrid options to employees, ensuring that collaboration and communication are imperative. Even if someone is on the move, quick access to resources from a mobile app should be possible. 

Cloud-based tools allow your employees to share data in real-time (e.g., video conferencing, time away updates) and access a complete set of resources for improved communication and collaboration.

Example: Since 2016, Superoffice has ensured that its Sales and Marketing teams became more aligned by conducting frequent meetings to discuss goals, content, campaigns and digital strategies. Since starting this initiative, Superoffice has seen a 168% increase in business leads, a 61% in web traffic from social media, and a monthly increase in social media impressions by 500%.

3. Augmented reality

Augmented reality (AR) is an interactive, real-time, 3D experience that combines a physical view with computer-generated elements. You can achieve AR in several ways, such as through goggles or pointing the smartphone’s camera at an area to combine the scene of the individual’s immediate surroundings with computer graphics.

Arguably, AR’s more significant application is in retail. With more consumers shopping from home, augmented reality allows individuals to see how products will look in their homes before buying them. 

Example: Houzz enhanced its marketing strategy in 2017 with AR and helped customers see how a product would look in their home. The CEO noted that buyers were 11 times more likely to purchase on their site after using AR.

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4. Artificial intelligence

Artificial intelligence (AI) is already playing a prominent role in retail. Marketers, for instance, use AI in customer relationship management (CRM) software to automate aspects of marketing, such as sending a customer a personalized email about their favorite product on sale. 

A particular type of AI known as computer vision (CV) is gaining popularity in retail. Smart cameras and sensor systems can track inventory numbers and products on shelves. An AI/CV system can automatically charge the customer for the products they choose when they exit the store.

Example: Amazon Go is an example of a cashier-less retail store. The stores use computer vision and AI technology to automate and streamline customer checkout.

Partner with Optimizely for your digital retail transformation

Optimizely excels in digital transformation projects. Our team can assess your current digital solutions and open up some areas for consideration as you expand your digital channels.

Ready to unlock your digital potential? Contact us today!