Digital transformation
6 min read
23 August 2023

Digital transformation in the retail industry

Kelly van der Horst
digital transformation

In recent years, the retail sector has been revolutionised, and customer experiences transformed. We can buy almost anything we want online, and from anywhere in the world. Lightning-speed delivery means we can even receive goods on the same day we purchase them. Consumer expectations have risen, with many of us demanding stand-out brand experiences that are personalised to our tastes. All these trends, opportunities and challenges have driven a massive and unprecedented digital transformation across the retail industry.

In this article, we’re going to look at digital transformation in the retail sector, what it is and why it’s important, some of the associated challenges and also some of the trends, particularly in relation to the digital workspace.

What is digital transformation in retail?

Retail digital transformation can be regarded as technology-enabled change that has a deep and extensive impact on both customer and employee experiences, organisational processes and even company culture within retail organisations. Digital transformation may result in new products and services, new ways of working, a change in profitability, an increase in productivity, a new approach to logistics and even a pivot in activities.

For example, digital transformation in fashion retail could involve a new emphasis on online shopping, better data-gathering to drive faster responses to consumer fashion trends and improvement to workflow across the supply chain, driving a faster journey to market for new fashion items.

The benefits of digital transformation in retail

The advantages of digital transformation in retail are clear: the retailers that are successful are far more likely to grow, be profitable and survive in the long-term. The companies that are less mature in their retail digital transformation journey may simply not last or end up being acquired by a competitor.

This has never been more obvious than during the COVID-19 crisis. Because of lockdown conditions around the world, the number of people entering physical retail outlets, particularly in city centres, has fallen dramatically. Surveys show that online shopping has increased, and is likely to change consumer habits for the long-term. Those retail companies who have already focused their digital transformation on online experiences are more likely to successfully navigate the challenges of the pandemic. Those who are behind in their digital transformation curve are less likely to, and may not even survive.

More specific benefits from retail digital transformation include the ability to:

  • Improve the consumer experience of online shopping, and meet demand
  • Drive efficiencies across the supply chain, often involving multiple third parties
  • Use and analyse data to improve both internal processes and customer experiences
  • Use innovation to differentiate a retail brand from its competitors
  • React more quickly with products and services to meet consumer needs and demands
  • Engage and inform frontline employees, initiating a real-world impact on customer service
  • Tap into the wisdom of employees to drive ideas that will also fuel innovation and improvement.

What are the challenges of digital transformation in retail?

There are a number of challenges associated with retail digital transformation.

Deskless and disconnected employees

Within the retail sector, there are a high proportion of deskless and disconnected employees working in retail outlets and distribution centres who do not have digital identities or easy access to a computer during the working day. Without straight-forward access to the digital workspace, digital transformation can be that much harder to achieve.

Lack of connection between HQ and stores

Digital transformation requires leading change and often standardising approaches. This direction usually comes from the centre of the organisation, but to succeed, it requires strong communication and buy-in from stores which may be geographically dispersed. When there is a weak connection between HQ and stores, retail digital transformation can be harder to achieve.

Relentless pace of change and constant competition

We live in highly volatile times, forcing a relentless pace of change within all sectors, but especially retail. Here, the COVID-19 pandemic, fragile economies, political events, advancing technology and more are all forcing almost constant change.

The retail sector is also particularly competitive, with commercial pressures driving a need for continuous improvement. While this provides the reason for digital transformation, it can also mean changes required by a transformation program stack up on top of other developments already being worked on.

High expectations and changing consumer trends

Consumers are changing the way they shop, buy goods and interact with brands, moving markedly towards online experiences. They also have high expectations of the kind of experiences they want; consumer habits are in a constant state of flux, and retailers have to adapt quickly and imaginatively to demand.


COVID-19 has resulted in huge pressure for retailers who have had to close down shops and reduce headcount because of lockdown measures, initiating a dramatic reduction in people coming into towns and city centres.

Digital transformation trends in retail

There are a number of trends in the digital transformation of the retail sector in which the digital workspace plays a significant role.

Providing smooth communication between HQ and stores

A strong digital workspace provides clear, strong two-way communication with retail outlets to ensure that operations run efficiently, urgent tasks are carried out and change is managed properly. Digital transformation often involves changing communication flows and using task management tools and communication platforms to ensure there is seamless communication between HQ and stores, allowing for minimal disruption while driving through changes and improvements.

Providing information to help serve customers

Digital platforms can also help customer-facing staff provide better service to customers, both on the telephone and in-store. When employees have comprehensive information about products and services at their fingertips, they can answer questions from customers on areas such as pricing and availability, and also resolve any issues. For staff working in retail outlets, they frequently need to access this on tablets or smartphones.

Engaging customer-facing staff

Digital transformation in retail often involves engaging customer-facing staff using digital workspace channels so they feel like a more engaged part of the organisation and brand, allowing for a shift in culture that can drive further change. In the past, it has been difficult to communicate digitally with frontline staff; providing access to social tools and content through personal mobile devices allows all frontline employees to feel connected to the brand and interact with each other.

Driving process improvement and innovation

Digital transformation in retail is often about improving processes, digitising previously manual tasks and even driving innovation. Because, in the past, frontline employees have not had access to digital services, it’s meant that some processes are manual. By introducing access to the digital workspace, it means core tasks such as roster planning, employee self-service, staff training and more can all be done far more efficiently. Digital tools can additionally drive innovation and knowledge-sharing to improve services.

The role of the digital workspace

A co-ordinated and optimised digital workspace that all employees can access plays a pivotal role in retail digital transformation. If you’d like to understand how Workspace 365 can support digital transformation, then request a demo!

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