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Page 1: THE FUTURE OF RETAIL: A DIGITALLY TRANSFORMED MACHINEstefanini.com › ... › english › e-books › eReport_Retail.pdf · The archetype for the retail store of the future appears

THE FUTURE OF RETAIL:A DIGITALLY TRANSFORMED MACHINE

Page 2: THE FUTURE OF RETAIL: A DIGITALLY TRANSFORMED MACHINEstefanini.com › ... › english › e-books › eReport_Retail.pdf · The archetype for the retail store of the future appears

Intr

oduc

tion

02

Introduction brick-and-mortar retailers to usher in a

new type of engagement with their

customers while attracting new

“omni-shoppers” who shop through

various media, whether it’s a retailer’s

website, physical store, or mobile

channel. Through the implementation of

technology-enabled resources—such as

devices, protocols, tools, methodologies,

teams, etc.—retailers are giving their

customers, and employees as well, the

opportunity to make more satisfying and

productive decisions. These choices are

often determined by content made

available by the retailer, in the form of

information, data, analysis, reviews, and

more.1 From a revenue perspective,

digital transformation positively impacts a

retailer by lowering business operation

costs through using technologies that

simplify processes that once required

significant manpower and funding.

The archetype for the retail store of the

future appears as an amalgam of both

digital and physical. That is, physical retail

stores will pour more digital onto their

canvas, and pure-play e-commerce

retailers will dip their brushes into the

world of brick and mortar. According to

author Greg Verdino,2 “Digital

transformation closes the gap between

what digital customers already expect

and what analog businesses actually

deliver.” One size fits all does not apply to

digital transformation strategies—every

business will achieve a different result,

made possible through different

methods. The goal, however, is the same:

to deliver progressive and unparalleled

value to customers. The textbook retail

strategy is not centered solely on selling

products anymore. This means that a shift

is occurring, where retailers are no longer

focusing simply on what is tangible—in

terms of products and services—but

broadening their scope to also include

what is abstract: experiences.

When 90 percent of all retail sales

transactions occur in-store,3 maintaining

these stores is critical, but so is reaching

the digital customer, who displays

changing behavior and is a paramount

part of fueling the retail industry. A survey

from PwC4 discovered that 58 percent of

the surveyed participants deemed

convenience to be the main reason they

shop online, with 34 percent admitting

that their mobile phones will be the main

avenue through which they complete

retail purchases. This may mean that

more brick-and-mortar or pure-play

retailers need to adopt omnichannel

strategies, but first, it is important for

brands to understand the customers they

are targeting and how their individual

personas make their way through the

shopping process—something that wildly

varies among all customers. In general,

digital is forcing retailers to reimagine

their business models, and a lot of these

metamorphoses are already occurring.

This is evident through new digital

practices that are currently present in

retail, as well as future technological

innovations anticipated to make an

impact. Customers are one of the main

catalysts in changing retail, but their

needs and demands are an assemblage

of ideas steered by technology and other

driving forces.

Going shopping doesn’t mean what it used to. The

image of a customer walking into a typical store,

finding her desired items, and then interfacing with a

cashier as she checks out at a cash register is colored

in black and white; it’s no longer the retail standard.

The confluence of technological advances and

changing customer demands is forcing retailers to

rethink the mold they originally created, in which

they shaped their businesses. Traditional processes of

purchasing products—and the whole retail experience

in general—have evolved drastically, and the

customer is one of the main forces dictating the

direction of the path that retailers will take, heavily

influenced by digital transformation.

The retail panorama is fluid, shifting directions and

moving with the current that technology emits.

E-commerce retailers, like Amazon, are quickly and

significantly growing while many traditional

brick-and-mortar retailers are seeing revenue loss

due to digital disruption. Essentially every industry is

experiencing a type of disruption in its processes,

operations, infrastructure, products, services, and

business in general. A hurricane of digital is sweeping

across enterprises of all types, leaving completely

reshaped business models in its wake. You may hear

a lot about it, but what does digital transformation

truly mean for retailers, their customers, and the

industry in general? Digital opens a door for

Page 3: THE FUTURE OF RETAIL: A DIGITALLY TRANSFORMED MACHINEstefanini.com › ... › english › e-books › eReport_Retail.pdf · The archetype for the retail store of the future appears

Intr

oduc

tion

03

brick-and-mortar retailers to usher in a

new type of engagement with their

customers while attracting new

“omni-shoppers” who shop through

various media, whether it’s a retailer’s

website, physical store, or mobile

channel. Through the implementation of

technology-enabled resources—such as

devices, protocols, tools, methodologies,

teams, etc.—retailers are giving their

customers, and employees as well, the

opportunity to make more satisfying and

productive decisions. These choices are

often determined by content made

available by the retailer, in the form of

information, data, analysis, reviews, and

more.1 From a revenue perspective,

digital transformation positively impacts a

retailer by lowering business operation

costs through using technologies that

simplify processes that once required

significant manpower and funding.

The archetype for the retail store of the

future appears as an amalgam of both

digital and physical. That is, physical retail

stores will pour more digital onto their

canvas, and pure-play e-commerce

retailers will dip their brushes into the

world of brick and mortar. According to

author Greg Verdino,2 “Digital

transformation closes the gap between

what digital customers already expect

and what analog businesses actually

deliver.” One size fits all does not apply to

digital transformation strategies—every

business will achieve a different result,

made possible through different

methods. The goal, however, is the same:

to deliver progressive and unparalleled

value to customers. The textbook retail

strategy is not centered solely on selling

products anymore. This means that a shift

is occurring, where retailers are no longer

focusing simply on what is tangible—in

terms of products and services—but

broadening their scope to also include

what is abstract: experiences.

When 90 percent of all retail sales

transactions occur in-store,3 maintaining

these stores is critical, but so is reaching

the digital customer, who displays

changing behavior and is a paramount

part of fueling the retail industry. A survey

from PwC4 discovered that 58 percent of

the surveyed participants deemed

convenience to be the main reason they

shop online, with 34 percent admitting

that their mobile phones will be the main

avenue through which they complete

retail purchases. This may mean that

more brick-and-mortar or pure-play

retailers need to adopt omnichannel

strategies, but first, it is important for

brands to understand the customers they

are targeting and how their individual

personas make their way through the

shopping process—something that wildly

varies among all customers. In general,

digital is forcing retailers to reimagine

their business models, and a lot of these

metamorphoses are already occurring.

This is evident through new digital

practices that are currently present in

retail, as well as future technological

innovations anticipated to make an

impact. Customers are one of the main

catalysts in changing retail, but their

needs and demands are an assemblage

of ideas steered by technology and other

driving forces.

Going shopping doesn’t mean what it used to. The

image of a customer walking into a typical store,

finding her desired items, and then interfacing with a

cashier as she checks out at a cash register is colored

in black and white; it’s no longer the retail standard.

The confluence of technological advances and

changing customer demands is forcing retailers to

rethink the mold they originally created, in which

they shaped their businesses. Traditional processes of

purchasing products—and the whole retail experience

in general—have evolved drastically, and the

customer is one of the main forces dictating the

direction of the path that retailers will take, heavily

influenced by digital transformation.

The retail panorama is fluid, shifting directions and

moving with the current that technology emits.

E-commerce retailers, like Amazon, are quickly and

significantly growing while many traditional

brick-and-mortar retailers are seeing revenue loss

due to digital disruption. Essentially every industry is

experiencing a type of disruption in its processes,

operations, infrastructure, products, services, and

business in general. A hurricane of digital is sweeping

across enterprises of all types, leaving completely

reshaped business models in its wake. You may hear

a lot about it, but what does digital transformation

truly mean for retailers, their customers, and the

industry in general? Digital opens a door for

Page 4: THE FUTURE OF RETAIL: A DIGITALLY TRANSFORMED MACHINEstefanini.com › ... › english › e-books › eReport_Retail.pdf · The archetype for the retail store of the future appears

Cont

ent

04

Factors Driving Digital Transformation in Retail05

Technology Trends in Retail06

Comparing Past and Future Retail Models08

The New Customer Experience08

Changes in Other Aspects of Retail09

Retailers Already in the Midst of the Digital Shift10

A Digital Partnership11

How Stefanini Can Help12

Retail Customer Cases13

Sources15 11

05

06 07

08

09

1112

10

Page 5: THE FUTURE OF RETAIL: A DIGITALLY TRANSFORMED MACHINEstefanini.com › ... › english › e-books › eReport_Retail.pdf · The archetype for the retail store of the future appears

Fact

ors

Driv

ing

Dig

ital T

rans

form

atio

n in

Ret

ail

05

In addition to the ever-evolving demands

and expectations of digital/omni-customers,

many other factors contribute to the drive for

digital transformation in retail.5 They include:

• An already-in-progress blurring of the

division between digital and physical, with

virtual/augmented reality, for example,

and enabled by IoT—to which many

customers are already exposed

• Challenges with supply chain, regarding

the need for clear insights as well as an

increased speed in a shorter amount of time

• Increasing pressure for lower costs

• Staff empowered by new technologies

• Opportunities for better optimization and

marketing made possible by data

• Customers’ desire for personalized

experiences, enabled by digital

technologies such as smart displays

• Social media’s power to influence

customers through reading reviews,

comments, advertisements, and promotions

Realizing what customers desire and

expect can help determine what

strategies retailers should focus on and

what is required for them to succeed with

digital. In a survey by the Chief Marketing

Officer (CMO) Council,6 nearly half of

surveyed North American and European

consumers stated that they would

disregard brand loyalty and shop

elsewhere if they endured poor customer

experiences on a continuous basis, across

multiple engagement channels. Other

critical aspects which customers

determined contributed to a great

customer experience included: fast

response time to needs or issues (52%)

and knowledgeable staff available

immediately to assist (47%). Another

notable fact from the study shows that 70

percent of consumers are willing to share

some amount of their personal data and

information with brands, while 22

percent said they are only willing to share

data if it will be used to deliver more

tailored and relevant offers. Likewise,

consumers explained that their

willingness to share data hinges on

whether they will receive value in return.

In the study, these consumers defined

value as saving money (77%), saving time

(49%), or making life easier (47%).5 In

some retailers, technology innovations

that address these drivers of digital

transformation and customer needs are

already in place and currently propelling

businesses to meet the pace of the digital

era, while other trends have yet to be

disseminated across the industry and

executed. Presently, technological trends

are altering the business DNA of many

retailers, and on the horizon are many

technologies that will likely be making an

impact soon.

70 percent of consumers are willing to share some amount

of their personal data and information

with brands.

Factors Driving Digital Transformation in Retail

Page 6: THE FUTURE OF RETAIL: A DIGITALLY TRANSFORMED MACHINEstefanini.com › ... › english › e-books › eReport_Retail.pdf · The archetype for the retail store of the future appears

Tech

nolo

gy T

rend

s in

Ret

ail

06

Technology Trends in Retail

Advancements are churning out of the IT

industry at a pace that makes it difficult for

retail to keep up. To match this increase,

retailers are putting more into their IT

budgets. Thirty percent of retailers say that

they increased their IT budget by more than

five percent7 —an adjustment necessary for

staying competitive and moving forward in

the industry. A recent Retail Systems

Research (RSR) report8 found that 72% of

surveyed retailers were reportedly in the

process of working on projects related to

IT. Putting new technologies into effect

not only requires a strategical change, but

a structural change—of a retailer’s entire

organization, people, processes, culture,

and business as a whole. But the most

important change comes in the mindset,

where new ways of thinking comprise

the component that truly breeds

transformation.

Some technological trends that will likely

begin to proliferate soon across the

industry, most prominently affecting

brick-and-mortar stores, are:

• More accurate item tracking and data

insights

Technology: RFID and smart barcodes

• Radio frequency Identification

(RFID) can be used in placing tags

on items for tracking purposes and

receiving data. The tags emit signals

which allow retail store owners or

managers to scan for the exact location of

the items and the quantity available in

inventory. This technology can help

retailers gain better insights into

customer purchase habits, item

popularity, and even theft prevention by

identifying customers leaving the

store with a tagged item. Likewise,

smart barcodes can serve similar

purposes and also have the ability to

present customers with product

information, push similar products to

the customer, and also deliver

relevant digital coupons.

A recent Retail Systems Research (RSR) report found that 72% of

surveyed retailers were reportedly in the process of

working on projects related to IT.

• Checkout without waiting in line

Technology: Mobile

• Customers can bypass the long

checkout lines by utilizing

mobile-enabled applications and

mobile pay—a function that may

eventually eradicate traditional retail

POS systems.

• Personalized signage and increased

customer acquisition

Technology: Smart beacons

• Through Bluetooth connectivity,

smart beacons can alert retailers

when customers are in close

proximity to their stores so they

can tailor their signs to market

them at specified times or ranges.

They also provide instant data

collection for retailers to find out

right away if their messages are

reaching their customers.

Page 7: THE FUTURE OF RETAIL: A DIGITALLY TRANSFORMED MACHINEstefanini.com › ... › english › e-books › eReport_Retail.pdf · The archetype for the retail store of the future appears

Tech

nolo

gy T

rend

s in

Ret

ail

07

• Virtual fitting rooms/showrooms

Technology: Augmented/virtual reality

• When one of the most significant

factors that prevents some

customers from purchasing items

online is the lack of physicality,

virtual fitting rooms or showrooms

can be a perfect alternative

solution. These virtual rooms are

powered by AR/VR and can provide

customers with the opportunity to

“experience” and demonstrate a

product without ever actually

touching or holding it.

• Virtual voice assistants

Technology: Artificial intelligence

• Like Amazon’s Alexa, virtual voice

assistants will likely increase in

popular usage and technical

capabilities, allowing customers to

order items from the comfort of their

own home. In-store, voice assistants

will be available for customers to

inquire about product information

and ask for different sizes, styles, or

colors. In many stores, AI assistants

will replace human consultants to

some degree, always available for

customers to inquire about in-depth

product information, including where

to find a specific item in the store and

which items would be best suited to

individual customer needs, based on

a preferences checklist.

Not all technologies will be right for every

retailer’s products or customers, but

formulating a flexible digital strategy can

provide the equipment to at least try new

technologies when they emerge—even if

they may end in failure. Finding the

balance between the palpable and the

imaginable, the physical and the digital, is

a challenging task for many retailers

aiming to attain an omnichannel approach

and leave behind the antiquated retail

construct of the past. Understanding how

retail has evolved throughout the years is

key to recognizing how many

technologies can act as an effective agent

of change, pushing retailers toward a

prosperous digital future.

Page 8: THE FUTURE OF RETAIL: A DIGITALLY TRANSFORMED MACHINEstefanini.com › ... › english › e-books › eReport_Retail.pdf · The archetype for the retail store of the future appears

brick-and-mortar retailers to usher in a

new type of engagement with their

customers while attracting new

“omni-shoppers” who shop through

various media, whether it’s a retailer’s

website, physical store, or mobile

channel. Through the implementation of

technology-enabled resources—such as

devices, protocols, tools, methodologies,

teams, etc.—retailers are giving their

customers, and employees as well, the

opportunity to make more satisfying and

productive decisions. These choices are

often determined by content made

available by the retailer, in the form of

information, data, analysis, reviews, and

more.1 From a revenue perspective,

digital transformation positively impacts a

retailer by lowering business operation

costs through using technologies that

simplify processes that once required

significant manpower and funding.

The archetype for the retail store of the

future appears as an amalgam of both

digital and physical. That is, physical retail

stores will pour more digital onto their

canvas, and pure-play e-commerce

retailers will dip their brushes into the

world of brick and mortar. According to

author Greg Verdino,2 “Digital

transformation closes the gap between

what digital customers already expect

and what analog businesses actually

deliver.” One size fits all does not apply to

digital transformation strategies—every

business will achieve a different result,

made possible through different

methods. The goal, however, is the same:

to deliver progressive and unparalleled

value to customers. The textbook retail

strategy is not centered solely on selling

products anymore. This means that a shift

is occurring, where retailers are no longer

focusing simply on what is tangible—in

terms of products and services—but

broadening their scope to also include

what is abstract: experiences.

When 90 percent of all retail sales

transactions occur in-store,3 maintaining

these stores is critical, but so is reaching

the digital customer, who displays

changing behavior and is a paramount

part of fueling the retail industry. A survey

from PwC4 discovered that 58 percent of

the surveyed participants deemed

convenience to be the main reason they

shop online, with 34 percent admitting

that their mobile phones will be the main

avenue through which they complete

retail purchases. This may mean that

more brick-and-mortar or pure-play

retailers need to adopt omnichannel

strategies, but first, it is important for

brands to understand the customers they

are targeting and how their individual

personas make their way through the

shopping process—something that wildly

varies among all customers. In general,

digital is forcing retailers to reimagine

their business models, and a lot of these

metamorphoses are already occurring.

This is evident through new digital

practices that are currently present in

retail, as well as future technological

innovations anticipated to make an

impact. Customers are one of the main

catalysts in changing retail, but their

needs and demands are an assemblage

of ideas steered by technology and other

driving forces.

Going shopping doesn’t mean what it used to. The

image of a customer walking into a typical store,

finding her desired items, and then interfacing with a

cashier as she checks out at a cash register is colored

in black and white; it’s no longer the retail standard.

The confluence of technological advances and

changing customer demands is forcing retailers to

rethink the mold they originally created, in which

they shaped their businesses. Traditional processes of

purchasing products—and the whole retail experience

in general—have evolved drastically, and the

customer is one of the main forces dictating the

direction of the path that retailers will take, heavily

influenced by digital transformation.

The retail panorama is fluid, shifting directions and

moving with the current that technology emits.

E-commerce retailers, like Amazon, are quickly and

significantly growing while many traditional

brick-and-mortar retailers are seeing revenue loss

due to digital disruption. Essentially every industry is

experiencing a type of disruption in its processes,

operations, infrastructure, products, services, and

business in general. A hurricane of digital is sweeping

across enterprises of all types, leaving completely

reshaped business models in its wake. You may hear

a lot about it, but what does digital transformation

truly mean for retailers, their customers, and the

industry in general? Digital opens a door for

Com

parin

g Pa

st a

nd F

utur

e Re

tail

Mod

els

• T

he N

ew C

usto

mer

Exp

erie

nce

08

Comparing Past and Future Retail Models

While customer needs and overall business

methodologies are factors that have

contributed to changing the face of retail,

technology has been the impetus with the

most noticeable effects. Retailers were once

confined to the “sales box,” in terms of the

services they provide, but now they have

become much more progressive—as their

area of work spans beyond store walls and

e-commerce boundaries, seeping into the

technology segment while becoming

creators and innovative thinkers in their own

right. Many elements are pushing retailers to

change virtually every facet of their

businesses to bring them up to speed

with future trends and assume the

identity of a digitally driven apparatus.1

The New Customer Experience

The essence of the conventional

customer retail experience was centered

on the ability to demonstrate functionality

across all touchpoints, emphasizing the

customer’s in-store journey. In the future,

the customer will encounter

individualized experiences tailored to his

or her specific buying habits or shopping

preferences, delivered through a

combination of multiple technologies in

stores. For example, behavioral analytics

can be utilized to look deeply into

customer preferences as well as aid in

delivering personalized promotions,

coupons, and offers on mobile phones.

Smart displays and kiosks will also play a

paramount role in reshaping the

customer experience for the digital era,

and store associates will be empowered

through new digital skills and deeper

insights derived from customers.

Traditional store layouts and visual

merchandising won’t hold as much

significance as they once did, as the store

of the future will contain virtual, 3D fitting

rooms, augmented reality, and more. The

manner through which sales associates

serve customers will also experience a

substantial change, aligning with

constantly fluctuating customer behavior.

Overall, the approach through which

retailers address the customer experience

will center on proactivity as opposed to

reactivity—actively anticipating and

preparing for future transitions in the

customer experience instead of taking

action only after a change occurs, catering

to customers through every channel of

their shopping journey.

In the future, the customer will encounter individualized

experiences tailored to his or her specific buying habits or

shopping preferences.

Page 9: THE FUTURE OF RETAIL: A DIGITALLY TRANSFORMED MACHINEstefanini.com › ... › english › e-books › eReport_Retail.pdf · The archetype for the retail store of the future appears

brick-and-mortar retailers to usher in a

new type of engagement with their

customers while attracting new

“omni-shoppers” who shop through

various media, whether it’s a retailer’s

website, physical store, or mobile

channel. Through the implementation of

technology-enabled resources—such as

devices, protocols, tools, methodologies,

teams, etc.—retailers are giving their

customers, and employees as well, the

opportunity to make more satisfying and

productive decisions. These choices are

often determined by content made

available by the retailer, in the form of

information, data, analysis, reviews, and

more.1 From a revenue perspective,

digital transformation positively impacts a

retailer by lowering business operation

costs through using technologies that

simplify processes that once required

significant manpower and funding.

The archetype for the retail store of the

future appears as an amalgam of both

digital and physical. That is, physical retail

stores will pour more digital onto their

canvas, and pure-play e-commerce

retailers will dip their brushes into the

world of brick and mortar. According to

author Greg Verdino,2 “Digital

transformation closes the gap between

what digital customers already expect

and what analog businesses actually

deliver.” One size fits all does not apply to

digital transformation strategies—every

business will achieve a different result,

made possible through different

methods. The goal, however, is the same:

to deliver progressive and unparalleled

value to customers. The textbook retail

strategy is not centered solely on selling

products anymore. This means that a shift

is occurring, where retailers are no longer

focusing simply on what is tangible—in

terms of products and services—but

broadening their scope to also include

what is abstract: experiences.

When 90 percent of all retail sales

transactions occur in-store,3 maintaining

these stores is critical, but so is reaching

the digital customer, who displays

changing behavior and is a paramount

part of fueling the retail industry. A survey

from PwC4 discovered that 58 percent of

the surveyed participants deemed

convenience to be the main reason they

shop online, with 34 percent admitting

that their mobile phones will be the main

avenue through which they complete

retail purchases. This may mean that

more brick-and-mortar or pure-play

retailers need to adopt omnichannel

strategies, but first, it is important for

brands to understand the customers they

are targeting and how their individual

personas make their way through the

shopping process—something that wildly

varies among all customers. In general,

digital is forcing retailers to reimagine

their business models, and a lot of these

metamorphoses are already occurring.

This is evident through new digital

practices that are currently present in

retail, as well as future technological

innovations anticipated to make an

impact. Customers are one of the main

catalysts in changing retail, but their

needs and demands are an assemblage

of ideas steered by technology and other

driving forces.

Going shopping doesn’t mean what it used to. The

image of a customer walking into a typical store,

finding her desired items, and then interfacing with a

cashier as she checks out at a cash register is colored

in black and white; it’s no longer the retail standard.

The confluence of technological advances and

changing customer demands is forcing retailers to

rethink the mold they originally created, in which

they shaped their businesses. Traditional processes of

purchasing products—and the whole retail experience

in general—have evolved drastically, and the

customer is one of the main forces dictating the

direction of the path that retailers will take, heavily

influenced by digital transformation.

The retail panorama is fluid, shifting directions and

moving with the current that technology emits.

E-commerce retailers, like Amazon, are quickly and

significantly growing while many traditional

brick-and-mortar retailers are seeing revenue loss

due to digital disruption. Essentially every industry is

experiencing a type of disruption in its processes,

operations, infrastructure, products, services, and

business in general. A hurricane of digital is sweeping

across enterprises of all types, leaving completely

reshaped business models in its wake. You may hear

a lot about it, but what does digital transformation

truly mean for retailers, their customers, and the

industry in general? Digital opens a door for

Chan

ges

in O

ther

Asp

ects

of

Reta

il

09

Changes in Other Aspects of Retail

Frequent customer stamp cards and loyalty

programs will also undergo a digital

makeover, as we’ll likely start to see the

incorporation of blockchain and,

subsequently, a more simplified version of

these often-complex programs. Blockchain

allows transactions to be shared across a

network of computers, potentially turning

rewards points into digital tokens that

customers can use at virtually any

retailer—therefore creating a markedly

improved ease of use of such loyalty

programs and increasing the likelihood that

more customers will take advantage of

them.9

Conventional methods of pricing items, using

stickers and labels, will shift to a more

dynamic variation, with digital shelf-edge

technology that will monitor competitor

prices to get a leg up on retail rivals;

likewise, coupons and sales will be

pushed to the customer through similar

technology. The giant POS systems of the

past will phase out, as the store checkout

process becomes more streamlined

through mobile and RFID payment

methods.

The way through which retailers actually

acquire their goods and deliver them to

customers is experiencing some major

modifications as well. Long-established

supply chain operations are becoming

dynamic, integrating with Agile and

increasing in flexibility and transparency.

New technology can increase efficiency,

reduce costs, and assuage risks in many

capacities. RFID, BLE, and other emerging

IoT sensors are crucial in incorporating

digital into supply chains. Drone deliveries

and automated monitoring are other

factors that will impact logistics and

warehouse operations. The use of

connected warehouses will simplify

material flows and increase warehouse

efficiencies, so store associates and

shoppers can find out more information

about inventory and shipping schedules.

The results of relying on this type of

connectivity will include a reduction in

inventory shrinkage and more accurate

supply-demand matching, based on

customer preferences.10

With marketing, complete cognizance of

the customer is essential in creating

multimodal, targeted, and personalized

engagement strategies. The use of

personas and data analysis of customer

history, context, and predictions helps

marketers gain a full view of the customer

journey, including both off- and online

footprints and interactions.

Lastly, but most importantly, the structure

of the entire organization and its people is

imperative for fully integrating digital

transformation into the retail business.

Customary ways of training staff and

managing talent based on

long-established values and plans of

action are outdated. The retail store of the

future will be dependent upon using

automation to streamline employee

processes, as well as gauge staff

performance and reward them through

KPI measurement. Adopting

IoT-connected smart systems to manage

staff shifts and checkout procedures will

also be paramount parts of the new retail

experience.8

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Reta

ilers

Alr

eady

in t

he M

idst

of

the

Dig

ital S

hift

10

Companies like Amazon and Walmart have

both already made major accomplishments

in the digital era as they incorporated IoT,

automation, virtual reality, and robotics.

Amazon’s opening of AmazonGo in January

2017 signaled a major milestone in retail.

The entire shopping experience was altered,

as customers gained the ability to walk into a

store and leave without having to stop at a

register and physically pay a cashier. New

technologies have enabled customers and

retailers to engage in a different way,

through the use of machine learning,

microphones, cameras, and data compiled

from multiple sensors. The “Just Walk Out

Technology” Amazon utilizes allows retailers

to detect when products are taken from or

returned to shelves, subsequently recording

these transactions in the customer’s Amazon

account and charging them accordingly.

Walmart has become another game-changer

in the retail industry, with their “Store No. 8”

technology incubation center, through

which they identify promising new

technologies and also invest in

entrepreneurship and startups. Likewise,

Walmart has also acquired an

e-commerce store to enrich their

already-strong digital presence. AR and

VR are regularly in use with employee

training, automation is part of the supply

chain, and robotics are present in many

stores. Walmart, in conjunction with their

acquisitions and investments, continually

aims to increase efficiency for their

customers and enhance their experiences

with digital, which is evident through

their success.11

Ulta Beauty is another retailer that has

applied digital transformation and has a

successful omnichannel strategy,

reaching customers across all touchpoints

and avenues while also managing

inventory seamlessly in real time for

thousands of products, in hundreds of

stores. They deliver their customers

personalized interactions and

recommendations for products based on

prior purchases and beauty interests. One

of the most important parts of succeeding

in the omnichannel revolution is ensuring

that customers and store staff access the

same information and data, unrelated to

what medium they are using—mobile,

desktop computer, or in-store, and Ulta’s

technology allows customers seamless

transitions throughout the entire retail

journey. This includes researching and

comparing products, deciding on what

they will buy, and then reviewing their

chosen, purchased items.8 As

demonstrated through their success, Ulta

has found the right way to transform their

company, through the convergence of

business and technology.

Retailers Already in the Midst of the Digital Shift

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A D

igita

l Par

tner

ship

11

A Digital Partnership

The backbone of successful digital

transformation is comprised of partnerships.

Strong collaboration and co-creation with

digital experts, IT technicians, business

executives, and customers themselves is

necessary for driving significant change in

the way retailers respond to the

increasing needs of customers. Many

digital shoppers are more in tune with

peer connection and engagement and

willing to provide feedback, which helps

retailers gain intimate insights into how

to best provide value and restructure

delivery models on a continuous basis.

When it comes to actually incorporating

new technologies and digital

transformation, retailers are often

confused about the best way to

accomplish it: utilizing their in-house IT

teams or hiring an outsourcing tech

company. According to a study from ISG,12

which tracked trends in outsourcing for a

Global 2,000 list of companies—including

104 retailers—80 percent of these

retailers depend on some degree of

outsourcing for completing projects,

software development, and digital

consulting. Internal IT teams may not

have the capacity to work with an

always-increasing flow of new

technologies and turn them into usable

solutions. Often, the more practical option

for retailers is to choose a company that

knows tech inside and out, focusing on it

as their core line of work; this usually also

ends up being less expensive than

utilizing in-house teams to keep up with

changing technology and the costs

necessary for creating valuable solutions

with them.

Having a partner that is willing to dive

deep to discover the ins and outs of an

individual business is critical, as well as

having esoteric knowledge on the

nuances of the retail industry. The tech

company a retailer chooses should be

well-versed in the unique challenges

facing retail as a whole and have an

arsenal of solutions to combat them.

Retailers have the responsibility to ensure

that the tech partner they choose operates

on the notion that digital transformation

expands beyond the borders of IT and

involves the evolution of existing

operational models. Becoming a retailer

with a successfully digitally transformed

business is dependent upon obtaining the

mindset and willingness to try, and fail, at

new things in order to identify and invest

in the best solutions.7

Having a partner that is willing to dive deep to discover the ins

and outs of an individual business is critical.

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How

Ste

fani

ni C

an H

elp

12

As a partner that is big enough to act

globally—investing in an innovation

ecosystem, while taking customers through

the digital journey—we are also small

enough to be customer-centric and flexible

to adapt to their individual needs. Our

business solutions for implementing digital

transformation into retail include digital

onboarding, e-commerce, new business

consulting, loyalty, online financing, and

media performance.

We actively work to enhance the

customer experience for our clients

through engagement-tailored services,

self-checkout and intelligent

displays/ATMs, indoor marketing,

omnichannel solutions, AR/VR, intelligent

delivery, and more. Cost reduction is also a

high priority on our radar of solutions, so we

offer content services and document

digitization, facial biometrics/image

recognition, analytics/big data, CRM and

omnichannel services, self-care solutions,

automation/RPA, machine

intelligence/chatbots, digital auditors,

digital replenishment, and back-office

automation.

How Stefanini Can Help

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Reta

il Cu

stom

er C

ases

13

We have a proven track record of delivering

successful digital solutions to many different

retailers—helping them transform their

businesses to keep up with the increasing

pace of technology. Here are several

examples of customer cases:

Leading Agricultural Equipment Company• Tablet-based digital solutions to

support sales

• Developed a tablet-based digital

solution that gives agility to Salesforce

by allowing them to quote and

implement prices in real-time, take

orders, and save quotes into the

central system.

Leading Retail Bank• Branding war room

• Designed a “Brand Connections” room

and developed dashboards for leading

Itaú’s branding campaigns’ indexes.

• Integrated real-time tracking of key

metrics, KPIs, and marketing

One of the Leading Beer Brands • Campaign and sales channel

reformulation

• Reframed the digital approach using

SEO techniques and good

media-performance practices to

achieve results.

• Boosted Facebook outcome, with

52% improvement in CPA efficiency,

4.8 times daily sales increase, and

3.1 times in total sales increase.

• Increased AdWords outcome, with

88% improvement in CPA efficiency

with direct impact on proposed SEO

and UX redesign, 44 times daily sales

increase, and 26 times total sales

increase. The overall outcome was a

50% Cost per Sales (CPA) decrease

and a 70% increase in sales volume

when compared to the previous

period.

goals, enabling the management

of creatives, channels, and media

investment.

• Expanded the project to the other

Itaú brands, such as Itaúcard,

Rede, and Personnalité, due to the

success of the model in achieving

the defined goals.

Leading Retail Athletic Company• Best practices for digital channels and

media

• Enabled the shopping process

through the right conversion goals,

with 100% adoption of media

channel resources.

• Developed media campaigns with

100% standardized parameterization.

• Used tagging coherence, with a

branding campaign, while making a

visible impact on Nike e-commerce.

• Branded campaigns and increased

sales by 16% (21% against a

historical average of 5%).

Retail Customer Cases

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!

Reta

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ases

14

Leading Technology Company• E-commerce usability testing and office

suite user perception

• Used test planning, according to

business objectives, and created

scripts and a selection of profiles

suitable for interviews.

• dentified usability problems in the

evaluation and shopping process for

Office 365.

• Understood the perception of the

Office 365 suite and its subscription

system.

• Recommended changes on how to

improve the usability of the

e-commerce platform, targeting an

increase in conversion rates.

Leading Food Processing Company• Development of digital platform

• Demonstrated great success in

displaying the Heinz portfolio through

organic access.

• Targeted successful recipes created

with Heinz ingredients.

• Translated the “no one does better

than Heinz” concept, highlighting

digital products.

• Focused on findability/SEO for

launching media support.

Quality of Life Services Company• A new approach to digital media

presence

• Discovered the behavior profile of

each target of the company.

• Tailored communication to suit the

needs of each type of customer.

• Focused on the “what” and “how”

of things that should be developed

for the digital platform, ensuring

Sodexo’s product development

pipeline in the medium- and

long-term.

Recycling Company• Created loyalty program and OEM

campaign.

Leading Food Processing Company• Created robotic inventory for small

stores or departments.

We are a business partner with the utmost

experience in our field and dedicated,

talented experts working with the common

goal of delivering value through technology.

We can support any retailer’s digital strategy

with scale, fulfilling their value purpose. Our

plug-and-play partner capabilities can

connect retail companies to all parts of an

innovative ecosystem, and our end-to-end

capabilities, integrated and modular at the

same time, help achieve their value

propositions faster and more efficiently.

Stefanini is a digital transformation partner

that will set the best strategy tailored to

your company’s purpose and technological

goals, exhibiting the commitment to initiate

top-down changes that permeate the

entirety of your retail business for success in

the new era of digital.

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1 “Disruptions in Retail through Digital Transformation: Reimagining the Store of the Future,” Deloitte, November 2017

https://www2.deloitte.com/content/dam/Deloitte/in/Documents/CIP/in-cip-disruptions-in-retail-noexp.pdf

2 “What is digital transformation?” The Enterprisers Project, https://enterprisersproject.com/what-is-digital-transformation

3 Frank Lavin, “Traditional Retail Might Not Be Dead, But It Is In A Coffin,” Forbes, 2017

https://www.forbes.com/sites/franklavin/2017/04/17/traditional-retail-might-not-be-dead-but-it-is-in-a-coffin/#1556b77a49e8

4 “2016 Total Retail Survey US,” PwC, 2016 https://www.pwc.com/us/en/industries/consumer-markets/library/2016-total-retail-survey-us/us-key-findings.html

5 “Digital transformation in retail: transforming for the new commerce reality,” i-SCOOP,

https://www.i-scoop.eu/digital-transformation/retail-industry-digital-mobile-shopping-transformation/

6 “Consumers Express Low Tolerance for Brands that Do Not Provide a Flawless Customer Experience,” CMO Council, July 2017

https://www.cmocouncil.org/media-center/press-releases/consumers-express-low-tolerance-for-brands-that-do-not-provide-a-flawless-customer-experience

7 Eleks, “Digital transformation in retail: industry vs. technology, who follows whom?” Medium, May 2017

https://medium.com/@ELEKSSoftware/digital-transformation-in-retail-industry-vs-technology-who-follows-whom-c49f052b9f81

8 Shelly Kramer, “How the IoT Will Change Retail,” Converge, August 2016 https://www.convergetechmedia.com/iot-will-change-retail/

9 Patrick Palacios, “5 benefits of blockchain technology for retailer loyalty rewards programs,” Digital Commerce 360, November 2017

https://www.digitalcommerce360.com/2017/11/17/5-benefits-blockchain-technology-retailer-loyalty-rewards-programs/

10 Chong Mock Seng, “The Digital Future of Retail,” Digitalist Magazine, March 2017

http://www.digitalistmag.com/customer-experience/2017/03/15/digital-future-of-retail-04964810

11 Daniel Newman, “Top 7 Digital Transformation Trends from NRF 2018,” Forbes, February 2018

https://www.forbes.com/sites/danielnewman/2018/02/14/top-7-digital-transformation-trends-from-nrf-2018/#459d2c6e6aff

12 Dan O’Shea, “Why more and more retailers are outsourcing their IT,” Retail Dive, August 2016

https://www.retaildive.com/news/why-more-and-more-retailers-are-outsourcing-their-it/423959/

Sources