Digital transformation with smart retail: From buzzword to reality

Asia’s digital landscape has grown at an unprecedented rate, encompassing a broad range of innovations, from manufacturing automation to navigational advancements to digital payments. Digital and data-driven innovation is happening every day, even in highly regulated sectors such as healthcare and finance. 

In particular, the retail industry has transformed significantly in the last few years, changing how businesses interact with their customers and manage their day-to-day operations.

In fact, in Q3 of 2022, over 75% of all retail technology funding deals worldwide took place in Asia and North America. This chimes with the growing demand in Asia for more innovative retail environments. 64% of APAC consumers prefer retailers that adopt technology to improve their shopping experience.

Into the world of smart retail in Asia

There’s no doubt that the pandemic had a catalytic effect on ecommerce. Existing retailers moved to digital platforms, and many new brands launched online businesses. Revenue from online retail in Asia is set to double from 2019 levels to USD 2 trillion.

Shopee, Amazon, and Lazada are just a few major ecommerce players that have increased their revenue and influence over the last three years, leading some to believe that the influence of physical stores would completely disappear. This will not lead to the demise of physical stores though. As retail rebounds together with domestic and cross-border travel, they continue to play a vital, albeit different role in the customer journey.

We already see examples of data-enabled innovation ecosystems around customer experience. For instance, Apple has created an omnichannel experience across mobile and online shopping, along with spacious retail stores designed to encourage customers to try out their devices. Apple is taking things further by transforming their stores into ‘town squares’ where staff and customers can commune.

Creating a unique experience in physical stores is especially important for retailers to differentiate themselves from competitors. Retail businesses must stay connected with customers, employees and systems in the digital age, creating what some have dubbed a ‘phygital’ approach.

Tackling staff shortages and rising labour costs, Amazon has shown us that it’s possible to operate a self-checkout store where customers can walk in, shop, pay, and walk out without staff interaction. Some staffless convenience stores in Japan cater to a similar buying process. Advances in self-service free staff to provide higher-value services to consumers.

To achieve this, retailers must tap rising opportunities in smart retail such as the Internet of Things (IoT), real-time data, and virtual reality to be able to optimise space, staff, operations, and the total buying experience.
 

Transforming store operations and integrated shopping experiences

In Singapore’s first Smart Retail showcase, Singtel explored how we can address retailers’ pain points, such as maintaining customer loyalty, staff shortages, rising labour costs, and managing multi-channel environments (storefronts, webshops, flagship stores, pop-up stores, and other sites). 

Zühlke and other partners demonstrated various smart retail solutions like computer vision, augmented reality, and virtual reality at this showcase. They emphasised the importance of integrating separate data sources and replacing purpose-built devices like laser scanners with software solutions on everyday devices.

One device, unlimited possibilities

Eliminating the need for specialised hardware like hand-held barcode scanners and standalone price checkers makes data more accessible to both staff and consumers. To support this, Zühlke worked with the Scandit Smart Data Capture solution.

Staff can use a smartphone and easily extensible app to access systems for inventory or client relationships to simplify shelf management and order fulfilment and enhance customer interaction. Imagine staff walking through the store as their phone’s cameras detect empty shelves and automatically notify the back of the house to restock, allowing them to continue their tasks without interruption. 

With AR technology embedded into a brand’s app, customers can use their smartphones, scan a product or barcode, and instantly see information on their screens. The app can provide details like size or colour options, stock availability, and related products or use cases for inspiration. Computer vision and AR are rising technologies to ensure adoption by lowering the barrier to entry.

Ecosystem partnering for software solutions

The key here is to approach new technologies and trends in a way that produces immediate, valuable business outcomes. At Zühlke, we work with clients to connect technology with business. This typically starts with sitting down with our clients to understand their challenges, needs, and desires to determine how technology can address their concerns.

To do that, we draw on the expertise of a global network of technologists across disciplines like DevOps, cybersecurity, software engineering, and cloud architecture.

What’s next for digital transformation in retail?

With digital systems, retailers can streamline workflows and offer personalised experiences with new insights. Staff and customers can access live information, gain knowledge, and understand the brand more easily. Customers can enjoy more convenient and efficient in-store and out-of-store experiences. This creates a cycle that keeps customers engaged with the brand’s ecosystem longer, fostering lasting relationships instead of brief store visits.

It remains essential to balance business progress with fostering genuine customer connections. Technology can free up potential to engage more often and meaningfully with consumers. But at the same time, it runs the risk of overwhelming and driving customers towards competitors that take a more low-key approach.

When modernising, focus on early results and adopt agile development, emphasising small, iterative outcomes. Strike a balance between realistic, timely delivery and efficiency. The primary objective is to connect the various systems you rely on so your business can respond to customers more intuitively.

Become part of smart retail’s data-enabled ecosystem and discover how you can unlock the business potential of omnichannel commerce. You can also contact us to learn more about Zühlke’s innovative approach to digital transformation.