Digital transformation in the retail industry: Outstanding benefits and trends

In the era of 4.0 technology developing strongly, digital transformation is an important trend if retail businesses want to stand firm in the market. This trend was most evident during the Covid 19 outbreak when customers switched from traditional shopping to online shopping. So what is digital transformation in the retail industry ? What benefits does it bring to businesses? What are the trends in digital transformation in the retail industry? Join 1C Vietnam to find out immediately through the information in the article below.

1. What is digital transformation in the retail industry?

Digital transformation is a sales trend that uses digital technologies to apply to the business model, creating new opportunities, value and revenue. Digital transformation in the retail industry is a change from a business model focusing on products along the supply chain to focusing primarily on customer experience, following a digital value chain model based on real data. .

In addition, digital transformation is also the process of connecting technology with people, applying modern operating models in business based on new technology software such as: Big Data (big data), IoT ( Internet of Things), Cloud (cloud computing)... They contribute to positive improvements in operating methods, work processes and even in the labor and production culture of the enterprise.

2. Current status of digital transformation in the retail industry in Vietnam

After the Covid 19 pandemic, as of March 2021, more than 8,700 Vietnamese businesses declared bankruptcy and left the retail business market. Therefore, to escape the negative changes in the economy and cope with the pandemic, Vietnamese businesses have been moving towards a digital transformation business model in the retail industry.

As concrete evidence, a series of supermarkets in Vietnam have successfully launched online shopping applications such as VinID, BigC,... on many online shopping platforms such as: Shopee, Lazada, Tiki, Chotot,... Providing a full range of products from necessities to equipment, machinery,...

According to statistics from the Ministry of Industry and Trade, by 2022, the retail e-commerce market in Vietnam is estimated to reach 16.4 billion USD, accounting for 7.5% of the total revenue of consumer goods and services in Vietnam. country. From there, it can be seen that digital transformation in the retail industry is a positive step forward to help retail businesses stand firm in the 4.0 era with main trends, including:

• Switch from traditional sales channels to online sales channels: Focus on building online sales channels such as sales channels via social networks (Facebook, Instagram,...), sales channels via e-commerce platforms (Tiktok Shop, Shopee,...) instead of selling at points such as stores, stalls,...
• Business processes are closely linked with digital services: Digitizing data, records, invoices, documents, customer information, electronic payments, providing door-to-door delivery services, discount codes prices, refunds, allowing users to accumulate points, etc. to improve services and products.
• Automated customer care and management: Thanks to the application of electronic software in the customer care process (cloud computing, support software, chatbots), the management and customer care process takes place automatically. automatically when fully updated with necessary data.
• Applying digital technology to manage and operate businesses: Integrating goods management software, financial management,... to handle automatic sales processes.

3. Digital transformation and benefits for the retail industry

3.1. Enhance customer experience

Currently, user demand is increasing day by day. Improving and enhancing customer experience has become a top priority for businesses. Applying modern technology will help retail businesses increase their competitiveness with the following advantages:

• Fast payment: Using AI artificial intelligence and heat sensor technology makes payment faster and easier with bank cards, e-wallets such as Momo, Viettel Pay, ZaloPay,...
• Product visualization using Virtual Reality (AR): Leading the AR trend is the furniture and automobile retail industry. The application of this technology helps to perfectly recreate products through realistic 3D images. helping customers, even far away, still have an overview and details about the product.
• Check products with QR codes: Consumers can find out all information about products and services and check fake and real products through just a small operation with their smartphone.

3.2. Automate workflows and operations

One of the benefits that digital technology transformation in the retail industry cannot ignore is the ability to automate the sales process. The application of modern technology in business operations helps save time and improve work efficiency. At the same time, simplify and improve management processes such as: human resource management, distribution - transportation process management, sales process,...

Modern technology software will support retail businesses in the following aspects:

• Retail management: Allows electronic payments, creates electronic invoices, easily manages products and methods of connecting with customers.
• Accounting management: Helps businesses control invoices, estimate operating costs, track and report revenue, debt, contracts, create detailed financial reports,...
• CRM management (customer relationship management): Manage customer information scientifically and easily, allowing decentralization of care for each customer item to each employee, automatically managing and preparing expense reports Details of customer service activities.
• Human resource management: Easily manage candidate and employee information, support recruitment planning, track and manage internal training programs, and allow support for accurate salary calculation.
• Manage records, documents, and vouchers: Helps store and classify invoices, records, and documents in a smart and clear way. Supports easy editing and updating of data when done on digital archives.

3.3.Improve competitiveness for retail businesses

Reality shows that business in the retail market is very competitive. Vietnam Report's survey results show that: up to 41.7% of businesses are seriously affected by the COVID 19 pandemic, 50% of businesses are moderately seriously affected and only 8.3% of businesses are slightly affected. affected.

It can be seen that if a business does not grasp customer demand trends, it will easily be eliminated. Digital technology transformation in the retail industry helps businesses increase competitiveness and create a good impression with customers.

4. Current digital transformation trends in the retail industry

4.1. "Contactless" shopping experience

Many retail businesses have actively promoted the development of stores on e-commerce platforms in the hope of increasing interaction between customers and brands. Customers will receive information about products, services, and promotions with a subtle shopping appeal.

The "contactless" shopping experience helps businesses save space rental and personnel costs. Therefore, retail businesses are encouraged to apply digital technology to address users' concerns about not being able to directly experience the product.

For example, thanks to realistic 3D models or AR virtual reality technology, it has brought a general and multi-angle view of products, helping customers have an intuitive view and honest evaluation.

According to the measured report, up to 61% of consumers choose brands that use AR virtual reality technology and 72% are persuaded to buy products that they had no intention of buying before.

4.2. Personalized

Digital technology transformation in the retail industry helps businesses personalize customers based on collected data, including information related to trends, preferences, consumer behavior,... to Determine the correct target to promote.

To effectively personalize customers, businesses can apply the following forms:

• Ad personalization: Proceeds by using online user data to display ads relevant to target customer groups.
• Personalize Email: By using subscriber information and data to provide email information and content suitable for each customer.

Customer personalization not only helps retailers attract more potential customers but also effectively optimizes consumer satisfaction and retention, thereby increasing sales revenue.

4.3. Application of artificial intelligence AI

Applying AI intelligence to digital technology transformation business activities in the retail industry will provide effective solutions, helping to optimize business processes easily, simply and quickly:

• Automate business processes: Applying AI technology helps businesses track, synthesize and analyze accurate data for supply and demand activities in a specific area, inventory management and sales. Flexible and easy retail.
• Analyze surface data: Analyze data quickly, helping to identify potential sales opportunities.
• Prediction and forecasting: AI helps businesses analyze sales data in transaction history. From there, AI predicts transaction results, opportunities to sell additional products or higher-end products than the products consumers currently have, or increase the price of goods accordingly,...

A popular example is the chatbot of Facebook platform, Website or e-commerce platforms,... allowing support to resolve questions about certain customer issues without the presence of a manager.

4.4. Shopping on mobile devices

Many retail businesses have used smartphone apps to increase user experience such as Shopee, Tiki, Lazada, Watson, Hasaki, etc. Thereby, product information and promotions will be automatically provided. sent to customers' devices to remind them to shop.

In addition, mobile devices also allow cashless online payments through apps such as Momo, Zalo Pay, Viettel Pay, Alipay,... creating convenience and ease for the purchase payment process.

4.5. IoT connected technology

Internet Of Things (IoT) is a system of mechanical, computational, digital and human devices that allows data to be transmitted over the Internet without human intervention with computers. Connection can be done via Wifi network, telecommunications network (3G, 4G), infrared, Bluetooth, ZigBee,...

In digital technology transformation in the retail industry, IoT brings benefits, including:

• Facial recognition: Using IoT helps retailers recognize customers' faces as soon as they enter the store. Through that, online customer data will be collected and uploaded directly to the system, helping the company optimize and personalize the customer experience.
• Set up a shopping cart: Allow buyers to download a list of products in the store, then guide them to find and choose the right product.
• Price tags/electronic information tags: Help retailers update all product information using the Internet and directly monitor the movement of goods, helping to manage goods more effectively.

With the above actual data, it can be seen that digital transformation in the retail industry is an inevitable trend that retail businesses need to apply. Understanding that, 1C Vietnam has provided the digital transformation solution for the retail industry 1C:Retail Chain. The software helps automate operations at stores as well as the entire retail chain, synchronizing data in real time, meeting the expansion needs of businesses. For detailed information about this solution, please contact 1C Vietnam immediately for support