Retail industry, one of the most fundamental industries of any economy was at cross-roads in 2019. 2017 had seen bankruptcy of household names like Toys R Us, while the same year Walmart posted record sales. During the same time, Amazon was becoming a bigger behemoth with each passing year, while traditional retail was still the leader in market. Digital transformation of the industry was inevitable in all aspects, but there were retail firms dwelling on it.

2. Retail industry, one of the most fundamental industries of any
economy was at cross-roads in 2019. 2017 had seen bankruptcy
of household names like Toys R Us, while the same year
Walmart posted record sales. During the same time, Amazon
was becoming a bigger behemoth with each passing year, while
traditional retail was still the leader in market. Digital
transformation of the industry was inevitable in all aspects, but
there were retail firms dwelling on it.
In early 2020, COVID-19 virus infection spread across the world
and entire world was caught in a never experienced before
lockdown. Retail emerged as both one of the biggest victims
and at the same time one of the winners in the ensuing 2 years.
As the world is still trying to adapt to the post-pandemic new
normal, the crossroads of retail is no more there. The writing is
on the wall — “Digitalize the Supply Chain or Perish”. It is
clear in 2022, that for retail business to go into the next era, have
to leverage technology and rethink their business model.

3. Primary learnings in retail digitalization:
Technology adoption speed: Retailers with a system to quickly
experiment with new technology and adopt it across the value chain
are more likely to succeed in the digitalization journey. The two areas
which have emerged as critical for the next decade are following:
Adoption of Artificial Intelligence (AI): Even though digital
transformation of retail has been ongoing for the past 3 decades, the
almost infinite ability of AI and Machine Learning in predicting
demand, inventory management and customer behavior analysis has
enabled the digitalization possibilities tremendously.
Adoption of cloud servers and technologies: Cloud based
technology allows retailers to achieve scalability and flexibility of
operations without the costs and responsibilities of local
infrastructure
Consumer experience: Consumer experience, both in online and
offline retail is greatly enriched with new technologies. Technologies
like Internet of Things (IoT), Beacons, High Speed Connectivity,
Robotics etc. are giving consumers improved check out experience,
browsing experience, personalized sales and marketing offers and
compressing delivery mediums.

4. Better asset and security management: Technology like IoT using
RFID and sensors can help in locating assets and inventory
management. AI and ML based behavioral analysis combined with
sensor technologies at the exit and checkout counters can effectively
put an end to theft or suspicious activities.
Key technologies leading digital transformation in retail:
Sales & Marketing improvements:
1. Enabling Multi-channel strategies
Customer expectations fuelled by internet, are changing at a very fast
pace. They do not care about the source and process involved in the
back end. They are also likely to use multiple channels for shopping
and it is imperative for a true retail player to be present in multiple
channels and look at delivering high quality customer experience at
each level. However, the experience in each channel has to be backed
by central promise and consistent across channels. Multi-channel
digital strategy must focus on data insights generated using ML to
build a cohesive view of customer’s buying behavior. Harvard
Business Review, has analyzed customer spends and come to a
conclusion that shoppers using 4 or more channels for purchase are
likely to spend more than customers who use 1 channel.

5. 2. AI powered customer service
Customer service has seen a sea change in recent years with the
advent of 24/7 chatbots. What we have seen actually delivering the
best results is a hybrid combination of chatbots and human
intervention if the chatbots are not able to solve customer query.
Hybrid combination has improved resolution time and decrease cost
significantly. Chatbots are AI powered, which means that with time
and more data, they will be solve more customer queries in future
and in faster time.
3. Beacons
Apple introduced beacons in 2013 and since been a leader in beacon
technology use in retail. As per beacon technology, the customers
will have beacon enabled wearables or mobile phones and upon
agreeing to marketing offers will receive personalized marketing and
promotional offers. Retail outlets have beacon sensors which identify
customers using beacons and provide personalized offers as per the
analytics of each customer. Beacons are expected to reach a market
size of $25bn by 2024.
Assets and logistics management:

6. 1. Use of IoT in inventory management
RFID tag enabled smart shelves have been developed by Amazon
which directly interact with AI applications based on the cloud. This
enables real-time analysis and predictive inventory management
2. Use of Blockchain in better visibility and security of the logistics
chain
Blockchain enables visibility of the supply chain without
compromising on the security. As Blockchain Technology is almost
impossible to be breached, it will also provide better clarity and
transparency of processes.
3. Cloud computing networks to provide flexibility, scalability and
sustainability
High speed data connectivity has enabled Cloud Computing to
become the choice for all future application development. Logistics
in supply chain requires remote access and seamless data flow. Cloud
computing is the best and cheapest way to achieve that. It also
reduces fixed cost by eliminating server investments. Cloud
computing also reduces retail industry’s carbon footprint as the
industry tries to score better on rising consumer demands of
sustainable growth.

7. Process improvements using power of data analytics:
1. Machine learning powered retail analytics
High number of transactions in a retail environment also generate
massive amounts of data at all levels of the value chain. Data
analytics has shown to directly improve revenue by an estimated of
8–9%. Machine learning allows much faster processing of big data
and throw insights which can be directly implemented. In
combination with AI models, the insights generated from data
analytics using ML, performance can be tested across processes in
logistics, marketing, design etc. and implemented.
2. Process mining
Process mining is used when a deep dive is required to understand
any particular process and make improvements. The data and
insights churned by ML is used in various algorithms and applied to
processes and simulations are conducted. Then the conditions are
tested in real time against test parameters provide process
improvement actionable strategies. Process mining is best used in
measurement of value creation using digitization actions as it
identifies root causes and provides potential solution, even in real-
time environment.

8. Operational Automation
3. Automation at an enterprise level
Any process or system that can reduce human impact and at the same
time increases overall productivity of the system can be considered as
automation. Automation helps inf reduction of operational costs,
errors and processing time. Primary enterprise level automation in
the retail industry are as follows:
a. Inventory/supply chain management using IoT and cloud
technology
b. Cloud based ERP technology
4. Automation at store level
Application of robotics in combination with IoT, cloud-based
applications and robotics has enabled Self-checkout systems to make
rapid progress in the last few years. Apple, Amazon, Walmart and
Microsoft are betting big on the self-checkout automation process.
Consumers can use RFID or tag readers and their payment details can
be stored on a Blockchain enabled secure cloud location. The
checkout is largely automated due to smart tagging using RFID and
payment is settled at the click of a button by the consumer. This has
resulted in higher revenue per session, shorter cues and improved
checkout experience

9. In Conclusion:
Retail industry is poised to get on a new journey of digital
transformation starting in 2022. Along with the exponential
growth expected in e-commerce, conventional retail is also
expected to continue to exist in somewhat of a hybrid format. It
is an imperative for the industry to not only adopt digital
technology but also work with IT firms to develop innovative
digital solutions.
Supply chain innovations like AI powered smart transportation,
robotics to eliminate human error and predictive analysis of
demand are all going to grow at an explosive pace. Retail players
are needed to be more agile and updated now than ever before
in the fast-changing post COVID-19 pandemic world.
Like other businesses, if you too are looking to develop retail
solutions, Mindfire Solutions can be your partner of choice.
We have a team of highly skilled and certified software
professionals, that have developed many custom solutions for
our global clients over the years.

10. Content Source: Medium
Contented by: Mindfire Solutions