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5 Guaranteed Benefits of Digital Transformation in Retail

9 Mins read

In the past year (not least thanks to the coronavirus pandemic) retail businesses have been affected drastically — from forced lockdowns to unpredictable dips and surges in demand of goods and services creating a supply chain shock. 

Now, it’s clear to all retail businesses (from mom-and-pop shops to retail giants) that they can benefit from running their business online, as well as in-store, in the long term. The benefits of digital transformation in retail have been made apparent. Digital transformation (DT) is not just required for retailers to stay ahead of the curve but also to stay afloat. 

A sign that a bookstore will remain closed, due to the COVID outbreak and that services will be available online (Photo by Stephen Yang/Reuters, NY 3/26/2020)

Some traditional retail business owners are undergoing digital transformation reluctantly. But its value will become apparent overtime, making them adapt to digitalization more willingly for the future. 

In this blog, we will look into the five chief benefits of digital transformation in retail with related case studies. 

The 5 main benefits of digital transformation in retail

Digital transformation can bring a lot of value to retailers. Namely, DT can help you:

  1. Increase profits
  2. Create a phygital customer experience
  3. Make data-driven decisions
  4. Increase customer loyalty
  5. Achieve greater employee wellness and productivity

Here’s a more detailed breakdown:

1. Increase profits 

Businesses that undergo digital transformation improve their internal profitability and efficiency across all verticals. For instance, DT can help retailers grow revenue by improving customer experience or by planning online marketing and advertising activities at a cost-effective price. 

Case in point, here’s what SAP Center for Business Insights and Oxford Economics reported:

  • Eighty-five percent of companies say that digital transformation has increased their market share. 
  • Eighty percent say that after a complete digital transformation they increased profits.

Moreover, according to Gartner, 56 percent of CEOs say digital improvements have led to increased revenue.

Let’s look at the real-life examples of increased revenue brought by DT.

Case Study: Chipotle 


The Mexican fast-food restaurant chain Chipotle is an excellent example of how digital maturity boosts revenue. The restaurant decided to upgrade its food-ordering app to enable customers to customize their dishes by simply choosing options. Its complete customization app feature allows users to make any ingredient light, standard or extra. 

Customers at home craving food can get their orders customized like they would have while eating at the restaurant. This is done by simply swiping from left to right on an ingredient in the app as they build their digital entrée.  

Customers can order the kind of burrito they’d like just by tapping a few options in the app. Source.

As a result, their digital sales increased by 202.5 percent, amounting to 48.8 percent of total sales of Q3 in 2020. Revenue increased from 14.1 percent to $1.6 billion. DT well done.

2. Create a phygital customer experience 

Phygital customer experience offers customers the best of both worlds — physical and digital. It enables retailers to deliver competitive prices, faster delivery and endless choices to the customers. 

Ordering kiosks, curbside pick-ups, and apps with customer loyalty programs are some ways a business can deliver a phygital customer experience.

According to Forrester Research, here are reasons why phygital experiences are important:

  • Forty-five percent of in-store shoppers expect sales associates to be knowledgeable about products only available online. 
  • Seventy-one percent of shoppers want to be able to view inventory information for in-store products like they can for online products. 
  • Fifty percent of shoppers expect to be able to make a purchase online and then pick up in-store.

All this shows the inclination of customers towards wanting a phygital customer experience.

Here’s how companies have actually done it:

 Case Study: Walgreens


Walgreen, an American pharmacy giant, allows users to manage their pharmacy prescriptions, find deals on products in the stores, fill out rapid refill requests, and make orders that they can pick up at the nearest location all through their app. While this is a mobile-focused shopping experience, the app is actually oriented toward improving a user’s in-store experience. This is the brilliance behind Walgreens’ strategy.


Case study: Chipotle

Chipotle Mexican Grill, along with a complete customization app feature, has also introduced dedicated in-store production lines and pick-up spaces where customers can pick up their ready orders placed online. 


3. Make data-driven decisions

If your goal is to create a people-centric business, making data-driven business decisions should be your absolute priority. Data, both personal data like email and phone numbers, and aggregated data, like social media metrics, are important to understand the needs of your customers. 

For example, data-driven insights help you create content, customized customer experience, and tailored business strategies. Retailers can track, view and optimize the entire customer journey, business operations, finance, and other business opportunities with a data-driven approach.

And digital transformation supports your data-driven approach — it enables any business to collect, store and analyze massive loads of data easily all from one place.

Let’s look at examples.

Case study: TentCraft

TentCraft is a US-based tent seller that offers services to event producers for concerts. After the Coronavirus took away their business, they pivoted to a creative solution: they converted the tents into portable COVID testing centers. 

However, they did not know which hospitals would want to tie up with them. So, they got in touch with ZoomInfo, a B2B SaaS data provider.


 ZoomInfo helped TentCraft to create an outreaching list of all hospitals first containing 2000-3000 leads. The marketing team started to target this segment. The click-to-open rate for the first emails sent to this broad segment ranged from 15 to 28 percent. 

Then, ZoomInfo narrowed down the list of hospitals and healthcare providers to 200 to 300 based on specific pain points and parameters like job titles and geographical location. TentCraft saw an increase in the click-to-open rates — between 35 to 50 percent at times, reaching 60 percent.

After two months of taking data-driven action using technology, the company gained more than $2 million in revenue, which was 12 percent more than what they made selling tents in concerts and events.

Case Study: Amazon

Image Source 

This retail giant’s practices are something all retailers can learn, implement, and benefit from.

One of the reasons for Amazon’s success is that it has gotten its basics right — one of them being, offering personalized recommendations. Its advanced recommendation engine collects data from the location, and purchase history of the customers, viewings, clicks, search queries, and in-cart items. 

Leveraging data and machine learning, Amazon shows amazingly accurate suggestions and, at the same time, manages to sell more slow-moving products. This coupled with cross-selling of recommended products garners Amazon huge revenue. Did you know according to McKinsey, in 2013 alone 35 percent of all sales on Amazon were due to its recommendation engine? 

4. Increase customer loyalty

Loyal customers are a gold mine. Firstly, they are more likely to buy from you again. And secondly, selling to them costs many times less than selling to a new customer.

DT supports your efforts to create loyal customers in three ways: it helps you deliver great CX, offer amazing discounts, and provide customer support 24/7.

1. A happy customer is a loyal customer

According to PwC, 32 percent of consumers say they will walk away from a brand they love after just one bad experience.

A happy customer, on the other hand, will have a bigger customer lifetime value (CLV). They will run word-of-mouth marketing campaigns for you by sharing their positive experiences with your brand to their friends and family, increasing your social proof and enhancing your brand image. 

So, to achieve great CX, you can use DT to offer round-the-clock customer support, and make data-driven decisions to personalize experiences for customers.

2.  Keep a customer loyal by solving their problems quickly 24/7

Another way of digital transformation helps increase customer loyalty is through round-the-clock customer support. Quick resolution time not only drives more sales but also retains a customer for a longer time. Fast support also gives customers the assurance that their problems and queries will always be solved, making it easy for them to make future purchases.

This is made possible by AI-based conversational chatbots, knowledge-based software, and more. Such technologies allow you to answer customers’ FAQs without needing a live agent. So, regardless of whether your employees are available or not, your customers and visitors will not leave your business without having received the support they need.

3. Awesome deals and discounts through loyalty programs

Online loyalty and referral programs are the biggest drivers of customer loyalty, as they offer customer rewards and discounts which they otherwise wouldn’t get. Other benefits include  early access to sales and new product launches, and customized offers and recommendations. 

Digital transformation allows for more sophisticated loyalty programs — redeemable digital coins for goods, bonus points for online reviews on Yelp and Google, sharing experiences on Twitter and Facebook, and uploading goods and products’ photos on Instagram are a few examples.

Here are two good examples we discovered:

Case study: Blume

Bodycare retailer US-based Blume uses a points system called Blume Bucks for its loyalty program, “Blumetopia.” 

Customers can earn Blume Bucks by taking online actions like following the brand on Instagram, placing an order, or telling friends about Blume. Each action taken gains the customer different amounts of Blume Bucks. With Blume Bucks, customers can get products and other cool gifts.


Case Study: Starbucks

Source: Alex Tai/SOPA Images/LightRocket via Getty Images

Starbucks has one of the most sophisticated reward programs. First, customers can make a free user account to get started with the loyalty program. Then, they can earn stars with every purchase they make online, in-store, or by drive-through pick-ups. They get a star for every dollar they spend, no matter where they spend it (online or offline). These stars can then be redeemed to get free goods.

To create a more engaging reward program, customers are given a chance to earn two stars per dollar and get other benefits if they make purchases on special occasions, pay through special cards, or play member only games online.

5. Achieve greater employee wellness and productivity

Take care of your employees, and your employees will take care of your customers. This (admittedly overused) saying by Richard Branson is timelessly true. 

Automation streamlines and speeds up your business processes while greatly enhancing your employee experience. Automation takes up routine tasks from your employees and allows them to focus on other important tasks (like creating more happy customers.) This is one of the most important benefits of digital transformation in retail.

For instance, chatbots can answer FAQs, and if integrated with a knowledge base software, they can provide more sophisticated customer service and support without needing a live agent.

Here are some examples:

Case Study: Odd Duck 


Odd Duck, a New American food restaurant based out of Austin, TX, deployed a mobile and tablet POS system for its employees, replacing the traditional stationary billing counters. 

This helped employees take orders and pass them on instantly in the kitchen without leaving the table. 

As a result, Odd Duck staff went from serving 240 guests a night at a maximum to seamlessly serving 400 guests a night. Since POS systems allow patrons to get their food faster, they’re also giving bigger tips to the staff. They have gained $6000- $7000 a year just in tips.

Case Study: Dufresne


Dufresne is a Canadian furniture retail brand, and it is also an excellent example of how customer experience technology can enhance employee productivity and their working environment. 

Norm Algeria, the director of Guest Care at Dufresne, said that Acquire motivated his team with the feeling that they will overcome this (COVID-19) and will win. These new technologies drive his team every day and fill them with joy as their business has started to gain momentum again. 

After Acquire, Dufresne saw a 100 percent increase in virtual sales, and 1000 sales conversions per day in the first two weeks. More importantly, they saw a 50 percent reduction in home repair visits, which prevented their employees from possible virus exhaustion and also general fatigue.

Dufresne deployed our conversational customer experience platform to tackle the heavy dip in sales caused by the pandemic in their otherwise in-store-only business. 

If you want to learn more about how Dufresne used Acquire to enhance their employee satisfaction, read the case study here.

How do I start with digital transformation? 

So, if you’re sold on the benefits of digital transformation in retail, you may wonder: how do I begin? Here are the five main steps you can take:

  1. Bring cultural shift. Get buy-in from marketing, IT, and C-suite to make implementation easier.
  2. Invest in tools and technology. Arm your team AI-based chatbots, Live Chat, Cobrowse, Knowledge-base software, and Video Calls to help them deliver great CX. 
  3. Create tailored experience. Make every customer feel special by personalizing interactions.
  4. People-based targeting. Find and target prospects with the highest likelihood to buy. 
  5. Enable Digital Payment. Cashless is more convenient, try to offer as many digital payment options as possible.

DT — a boon for retailers

For retailers, digital transformation is a must. From better data collection and analysis to delivering phygital customer experience, businesses are seeing both cost savings and increased profitability with digital transformation. 

And, digital transformation adoption will keep on accelerating. IDC forecasts that by 2023, 53 percent of all investments made in information and communication technology will be in digital transformation. That is an increase in spending by more than 50 percent from 2019, showing once more how important DT will be for retailers as well as other businesses.

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Senior Content Writer

Shubham Rajpara is a clinical psychology student, brand enthusiast, and a T-shaped marketer with content writing being his forte. He has written extensively about AI, ML, IoT, Blockchain, and all things marketing. You can find him on LinkedIn:

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