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How Exceeding Customer Expectations Starts With Retail Digital Transformation


Mar 30, 2022 - 4 minute read

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Małgorzata Caban Senior Content Marketing Specialist

She specialises in translation, writing and knowledge management. In her work, she combines her passion for languages with an interest in technology. Privately, she was part of a team of volunteers responsible for the Polish translation of “Baldur’s Gate: Siege of Dragonspear” video game.

See all Małgorzata's posts

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In modern retail, businesses must adapt to fast-changing consumer expectations and behaviours. Whether inspired by the recent lockdowns or simply by the breadth of emerging technologies, customers demand convenience and seamless shopping journeys that are increasingly shaped and informed by digital experiences.

Currently, certain aspects of e-commerce give it an advantage over brick-and-mortar retail. The majority of shoppers (64%) find it easier to discover new items online and 54% consider browsing online more enjoyable than in-store. So, retailers need to accelerate their digital transformation — according to Gartner, digitally transforming physical stores is key to winning in today’s market. At the same time, e-commerce is evolving as well, therefore optimising business processes across both physical and digital channels is becoming a strategic necessity.

What Does Digital Transformation Mean for Today’s Retail?

The goal of retail digital transformation is to respond to customers’ changing needs and preferences in ways that exceed their expectations. However, employing innovative technologies to deliver exceptional experiences requires the ability to understand the customer’s shopping mission. Consequently, retailers should present the next best offer or message based on any engagement that infers the customer’s intent, such as placing an item in an online basket, using a coupon or ordering something online to pick up in-store. Moreover, the accelerating pace of change in the industry necessitates creating “composable” business models that can easily be scaled and adapted to market dynamics.

Gartner finds that, without introducing a composable approach to stores, people and technology, retailers will fail to gain a competitive edge and boost revenue. Creating an organisation based on interchangeable building blocks enables agility and resilience in today’s retail environment. To achieve it, retailers need to monitor customer preferences and processes and collect data-driven insights to guide their strategy. For example, smart inventory planning can help present a more personalised offer and increase customer trust in the brand. Live streaming from stores is also an emerging digital channel that can drive both online and in-store sales. Here, we’ll take a closer look at these three examples and how they can support retail digital transformation efforts.

Customer-Centric Retail Operations

A holistic approach is needed to improve shopping experiences that should take a variety of modern consumer needs into account. Customers increasingly expect retailers to personalise their services by presenting a more targeted offer, highly curated and well-merchandised range. For apparel brands and retailers, this also includes improved sizing — many retailers already offer “best fit” suggestions based on technologies such as augmented reality. However, personalisation requires understanding your customer first, and solutions leveraging artificial intelligence (AI) and machine learning (ML) are key here. They utilise data from brand apps, loyalty programmes and shopping history to provide you with a complete picture of your customers that can inform product design and buying, as well as planning and forecasting.

Consider also the convenience of the purchasing process and how this can be the factor that differentiates your store from the competition. Nearly 60% of consumers are interested in the click-and-collect shopping service, and other convenient options, such as smart checkouts and kerbside or drive-thru pickup. Looking for new means of digital transformation in retail should also include ensuring solutions that can increase store throughput. Here, micro and auto-fulfilment systems are driving efficiencies at the back of the store too.

Next Level Inventory Management

Tailoring an assortment to the needs of a retailer’s best customers not only increases their satisfaction but can also help lower return rates and reduce the overall number of products held in stock. Therefore, drawing meaningful insights from the customer data you collect is an important capability of retail digitalisation and should also have a role to play in inventory planning processes. Since inventory accounts for the largest capital expense for most retailers, leveraging technology to optimise its management that results in increased profit margins only benefits the bottom line.

Algorithmic merchandising, which combines advanced data analytics and the power of AI, offers retailers an efficient way of ensuring the right product availability and managing prices across all touchpoints. Such forecasting models help merchandisers understand the performance of the sold goods, adjust the offer to customer expectations and optimise buying plans and stock levels.

Live Commerce on the Rise

As customer expectations grow around all shopping channels, live commerce presents retailers with new potential for creating value and expanding their digital transformation. Gartner predicts that “by 2025, sales initiated through live commerce will constitute more than 20% of global online sales for non-food multichannel retailers”. Live commerce, typically delivered through mobile apps or social media, leverages live streaming to digitally interact with customers in real time by blending multimedia entertainment with instant shopping.

Even though low entry barriers of live commerce technologies allow for fast adoption of the concept, companies should carefully choose their approach based on appropriate use cases. Selecting the right live commerce platforms, employee training, and investing in supporting technologies are also important. However, well-planned and executed live commerce can help you accelerate conversion and improve brand appeal and differentiation, and can become part of the exceptional experience your customers are looking for online that could also attract them into a store.


When deciding on the next steps of a retail digital transformation journey, it’s worth exploring how digitising existing processes and introducing new ones can help you stay ahead of the market changes. Furthermore, placing customers at the centre of your transformative efforts will help you anticipate their needs, increase trust in the brand and drive sales. Retailers can choose from a wide range of technologies to modernise and optimise their operations. Particularly, AI/ML and data analytics can be applied across many channels and help you improve your inventory management and address your customers’ expectations even before they express them.


  1. Retail Digital Transformation and Innovation Primer for 2022. Gartner. 2022
  2. Top Trends in Retail Digital Transformation and Innovation for 2021. Gartner. 2021
  3. Predicts 2022: Mastery of Inventory Is Critical to Drive Customer Trust for the Future of Retail. Gartner. 2022
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Małgorzata Caban Senior Content Marketing Specialist

She specialises in translation, writing and knowledge management. In her work, she combines her passion for languages with an interest in technology. Privately, she was part of a team of volunteers responsible for the Polish translation of “Baldur’s Gate: Siege of Dragonspear” video game.

See all Małgorzata's posts

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