Digital Transformation in Retail is Acquiring Momentum
With all the exciting changes underway in the retail industry, it appears that retail itself is getting some therapy. The retail industry has been transforming itself for quite a while, beginning with the online commerce trend as brick and mortar stores expanded into an omni-channel strategy. Given the hyper-competitiveness of the industry, retailers continue to strive to differentiate themselves with data-driven strategies for enhanced customer experience, faster & reliable services, and improved operational efficiencies.
Digital transformation has been well underway for the past few years. Most retailers have an online presence and many have expanded their online interfaces beyond e-commerce to offer improved services. Now guests and customers can browse the store inventory, locate their purchase, and accelerate in-store pickups by informing their arrival at stores. Retailers are increasingly relying on data analytics for store operations including product placements, inventory optimizations, and supply-demand forecasting.
These and other digital transformation efforts have already provided positive impact in improving sales and reducing costs. Recent events have caused supply chain disruption due to asymmetrical demand and supply, and shift in customer purchase behavior driven by health and safety. Recent earnings offer a glimpse of the impact of this shift. The earnings of major retailers of general merchandising, home improvements and grocery show record earnings and profits witnessed across the spectrum. Grocery chains show similar strengths. High-end apparels did not fare as well. Here are some common themes that we were able to observe:
- E-Commerce is growing fast: Retailers with a strong online presence were quite successful. E-commerce transactions saw tremendous growth, doubling or tripling in some cases. Retailers who were ready with a scalable and capable e-commerce platform were able to grow despite dynamic market conditions.
- Buy-Online Pick-up In Store (BOPIS) and “curbside pickup” saw significant increase in demand. Big retailers like Walmart and Target saw their curbside pickup traffic setting record volume registering triple digit growth. This trend is seen across the spectrum including rural chains like tractor supply.
- Focus on touch-free commerce: Driven by the health safety needs, retailers are looking into touch-free commerce wherever possible, including social distancing and touch-free commerce. The process for touch-free commerce is rapidly evolving and we’re seeing it beginning at the check-out counters.
Role of the Stores (or the Edge)
Though e-commerce is picking up, brick and mortar stores continue to play an important role. As mentioned, stores are transforming themselves to offer new services like curbside pickup and BOPIS. The changes require improvements to store-side processes including:
- Increased inventory visibility with accuracy
- Inventory protection (perishable goods)
- Order fulfillment at the store
- Curbside pickup coordination
- Ensuring a consistent customer experience
How Dell Technologies Can Help
Dell Technologies empowers retailers to expedite actionable insights, digitize business processes, and transform their customer experiences by applying the right technology solution for every environment. To help unlock the value of data at the Edge, our broad portfolio delivers consistent infrastructure, consistent operations and intrinsic security paired with experienced support around the world. Here are three additional areas where Dell Technologies is supporting our retail customers in their efforts:
1. Fast growing e-commerce
We can help capacity augmentation to process increased volume of transactions. Dell Technologies has been helping customers transform their existing e-commerce platform into scalable infrastructure for scale and resiliency using our server, virtualization and enterprise application orchestration portfolio.
2. Increase in Curb-side pickup
Customers are looking at ways to improve the curbside pickup process for faster servicing. Dell Technologies, working with our partners, are enabling Computer vision-based solutions for faster processing for curbside pickup service.
3. Increased visibility into inventory
Same day and curbside pickup requires in-store fulfillment. Retailers need to have better insight into their inventory for availability and count to enable the transaction.