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Digital transformation in the retail sector has come a long way since the rise of e-commerce and mobile-friendly shopping, with a slew of emerging technologies like artificial intelligence and virtual reality tools poised to transform the way brands and customers interact.
Today's evolving retail landscape is one focused on improving the customer experience and optimising supply chain efficiency; a world in which online platforms and in-store experiences merge to bring real benefits to retail employees and customers.
From imaginative solutions to long-standing problems, to the role of augmented reality and AI tools in exceeding consumer expectations, below we delve into some of the most exciting technological advancements driving retail businesses forwards.
These are the top software and transformations shaping the future of retail.
Just like in many other industries, digital transformation has had a big impact on the retail sector.
Retail brands of all shapes and sizes are increasingly turning towards new technologies as they commit to providing faster, smoother and more engaging shopping experiences.
Where once digital transformation in the retail industry mostly revolved around investments into online shopping, modern developments focus on using supply chain and customer data to revolutionise retail operations across both online and offline channels
In 2024, the global market for Retail Digital Transformation was valued at $305 billion, with analysts expecting this figure to rise to around $860 billion by 2030.
But value alone doesn't quite illustrate the true impact of digital transformation across the retail sector.
To do that, we should look into how retail businesses and customers currently use digital technologies.
These insights illustrate the rising importance of digital transformation in retail, showing how new technologies are positioned to improve life on the shop floor for everybody.
That said, we can also see there's a long way to go before retail operations across the board are fully modernised.
This means many companies are currently engaged in retail transformations, with new business models, technologies and processes being introduced all the time. But with change often comes business challenges, including difficulties helping employees see the benefits of new practices and making them stick.
In many cases, creating a structure plan and prioritising open communication can help teams overcome hardships. This is why major retailers like M&S and Primark lean on the benefits of change management transformation models and employee idea management solutions like Sideways 6 to help motivate their teams to embrace change.
Speaking of change, we should take a closer look at what types of transformations modern retailers are exploring, their purpose and the benefits they might bring to shoppers and staff.
From novel uses of artificial intelligence to analyse and act on sales data, to what customers think about virtual reality shopping experiences, here are 4 examples of software and transformations shaping the future of retail.
Idea management software helps leaders work insights from employees into retail transformations, using ideas put forward by those who know a business best to improve how shops are run day-to-day. Through a solution like Sideways 6, workers can suggest insightful improvements they think will make life easier for their colleagues and customers, all with the aim to build better retail spaces.
In many ways, idea management tools are key to successful transformations across all areas of the retail industry. When the people who speak to customers and manage the shop floor everyday are given a way to share their experiences, businesses can make changes that have real, measurable impacts.
When businesses show they value employee ideas, they incentivise intrapreneurship and can even raise the probability of change success by 24%. An example of this can be seen in M&S’ Sideways 6-powered Suggest to Steve program, a custom idea management platform which ultimately helped the business to boost engagement in change initiatives by 70%.
Similarly, Primark embraced idea management software and found that a single employee idea (introducing a minor product tweak) immediately led to substantial sales growth. As Josh Vincent from Primark states: 'No one knows the business better than those working within it.'
Embracing new technologies in retail is like upgrading from navigating with a basic map to using a GPS. Sure, it can take some getting used to, but once adopted you'll wonder how you ever did without it. Recent coverage in Retail Week and The Times shows how change management tools help to smoothen this process, highlighting Sideways 6’s pivotal role in helping retail giants streamline operational improvements through employee-driven ideas.
Demand and interest in artificial intelligence seems to grow by the day across most modern industries, with businesses of all sizes looking to improve efficiencies and gain a competitive advantage using data analytics and automated systems. In the evolving retail landscape, AI stands at the forefront of modernisation, leading some experts to suggest AI tools may boost industry margins by almost 2%.
Some of the most impactful uses of AI in the retail industry involve predictive analytics. Companies are using the computational power of AI to predict things like how much stock they might need at certain times and how changes they make might impact their finances.
AIs trained on internal company data can be used to identify key areas where a brand may be losing time or money, helping teams fine-tune operations and even propel up to 5% of incremental sales.
With the ability to read and understand much more data than a human, AIs use machine learning algorithms to anticipate what customers might want and create new promotions that appeal to specific groups. Of all the new technologies sweeping the retail industry, AI might be the most flexible, with current uses ranging from the above to virtual assistants, flexible pricing strategies and even AI-generated product images have shown to boost click-through rates (CTRs) by 40%.
Efforts to reduce waste and save time across retail supply chains are important to many businesses, both to keep costs down and meet rising customer demands for sustainability.
Data suggests modern consumers increasingly consider a brand's eco-credentials before making a purchase, with 60% willing to pay more for eco-friendly goods and 78% saying sustainability is important to them.
What does this have to do with software and transformations shaping the future of retail? Well, modern combinations of retail software and hardware are being used to help brands better-understand the inner workings of supply chains and inventory management practices, with the Internet of Things in particular helping retailers meet eco-targets.
Real-time inventory tracking, powered by IoT sensors and RFID tags, gives retailers instant visibility over stock, simplifying life on the shop floor. Physical stores can make sure they're only ordering what they need when they need it to cut down on energy and resource waste, helping to meet consumer expectations of sustainability and improve supply chain visibility.
For many retailers, the most impactful transformations shaping the future of retail are those that boost customer satisfaction. For business models that thrive on higher customer engagement in-store and online, any new technologies that help make the customer journey more involved and exciting can bring significant benefits.
AR is one such retail technology; a tool that when applied to both in-store and e-commerce operations can boost customer engagement via unique, interactive experiences. AR allows customers to visualise products in their own homes, or on their own person, adding a new dimension to shopping experiences and helping customers make more informed decisions.
In practice, AR retail technology has shown promise in boosting customer satisfaction and enhancing customer interactions, in some cases even improving conversion rates by up to 40%. Consumer data further demonstrates the benefits of this retail technology, with 80% of shoppers claiming to feel more confident in a purchase after using AR and 61% preferring shopping in stores that offer AR experiences.
Emerging technologies are helping online and physical stores improve business processes and boost customer confidence, but for staff, these changes can be overwhelming. Retailers looking to act on key trends must be agile, adaptable and have plans in place to help their teams embrace and enjoy change.
Idea management solutions like Sideways 6 allow employees to take ownership over change, boosting engagement by making it clear that every opinion holds value. To make the most out of software and transformations shaping the future of retail, new processes should always be shaped around the people who perform them, with their ideas and first-hand experiences used to guide continuous improvements.
Discover how Sideways 6 can help your teams embrace new technologies, try our product with a free demo today.
