Digitalization in retail is no longer just a trend; it's a reality that is redefining the sector. According to figures released in Digitail 2024, companies that embrace digital transformation are experiencing revenue growth up to five times greater than those that have not yet adopted these strategies.
The impact of digital transformation is global. Data from the World Economic Forum indicates that, by 2025, digitalization will contribute approximately US$100 trillion to the economy.
As João Paulo Amadio, vice president of strategy and growth at Coretava, a company specializing in customer loyalty, points out, “in a market that is increasingly focused on personalizing the customer experience, based on behaviors, to build loyalty, digital transformation is essential for companies to remain competitive and adapt to changes in consumer behavior. It's important to emphasize that these experiences go far beyond cashback. The general concept is that the business optimizes its marketing investments through technology, thus increasing repeat purchases.”
The survey revealed that, in 2023, 68% of the Brazilian population made purchases online, at a rate of 3.8 orders per month. More than half of the consumers surveyed – 55% – believe they can buy about 100% of the products they need online. “To survive in this environment, which is growing year after year and already represents the main way for a significant portion of the country's population to acquire goods, products and services, companies must understand what their customers need and offer solutions that meet those expectations,” emphasizes João Paulo.
Identifying – and overcoming – the challenges of digitalization in retail
Even in a deeply connected society, with online experiences increasingly present in people's daily lives, implementing technology in the day-to-day operations of retail has its challenges.
The Digital Transformation Radar in Retail – Brazil 2024 survey, conducted by BIP, indicated that 83% of the retailers surveyed still need to improve their strategies to put the consumer at the center of the business. Among those surveyed, 70% admitted that the company's digital channels are not intuitive and even complicated to use, while 83% indicated that they need to improve the use of customer journey data and feedback.
“Implementing digitalization in retail often requires a profound transformation in a company's culture, and this is not always easy or quick. Furthermore, this entire process stems from the company's knowledge and understanding of its customer, which also involves technology, data, and in-depth analysis,” explains João Paulo.
Resistance to change and a lack of knowledge about digital technologies are significant barriers for retail, which often operates using traditional methods. Furthermore, a lack of clarity in the digital transformation strategy can also impact the process, considering that data security and privacy are also growing concerns.
Coretava's Vice President of Strategy and Growth points out that, "to overcome the challenges, it is essential to stimulate and embrace a culture of innovation. This helps reduce resistance to change and promote an open mindset towards new ways of working, connected to the present and paving the way for the future. Facing these barriers and adopting appropriate solutions allows companies to reap the benefits of digital transformation, achieving greater efficiency, growth, and profitability.".
Data indicates that 86% of customers are willing to pay more for a great experience, and that 57% of consumers will not recommend a company with a poorly designed mobile website. And if a website is not mobile-friendly, exactly half of the customers will stop visiting it, even if they like the business.
How can technology become an ally in business?
Changes in consumer habits, especially those related to new technologies, are leading retailers to change the way they do business. There are several challenges, but they also bring good opportunities.
“Technology is a great ally, allowing companies to go further in terms of the digital experience of consumers. Through it, it is possible to improve everything from basic processes, such as offering a responsive website and effective customer service, to introducing a gamified experience that offers personalized benefits to each brand's customers, increasing average order value, retention, loyalty, and overall business success,” highlights João Paulo.
The expert emphasizes that the modern consumer seeks an increasingly simple and hyper-personalized shopping experience, which needs to be based on digitalization and data. "Customer loyalty in retail is the primary step in promoting brand recognition, establishing a lasting relationship between companies and consumers, and encouraging repeat purchases, creating a continuous cycle of engagement and loyalty that contributes to the sustainable growth of the business.".
Finally, although implementing digital transformation in retail may bring some challenges, this is an unavoidable change that will guarantee long-term success. "Understanding customer needs, integrating new technologies, and adopting a gradual approach are essential steps to achieving a successful digital transformation," concludes João Paulo Amadio.
