What Is Digital Retail? (Examples & Tools)

Ecommerce. DTC. Omnichannel sales. B2B…

There are several terms to keep track of in the retail world—especially in an industry prone to lightning-fast innovation and new trends.

It can be challenging to keep up. The good news is you only have to understand concepts that will improve your retail business and help you make more money.

For this article, let’s focus on understanding one of those money-making terms—digital retail. You'll learn everything you need to know about moving into digital retail and the tools you need to succeed.

What is digital retail?

Digital retail encompasses all aspects of a business’s digital presence—including online and offline integration. It focuses on creating a seamless shopping experience across all potential digital channels.

So, it’s ecommerce, right? Well, yes and no. Ecommerce is the part of digital retail that focuses on selling products over the internet. But digital retail is more expansive as it also includes things like mobile apps, online and in-store digital technologies, and augmented reality (AR).

Take Rebecca Minkoff, for example. The company has an ecommerce branch where customers can buy products online. But Rebecca Minkoff is also a digital retailer because people can interact with digital sales tools (online and in-person) like its smart mirrors in fitting rooms. 

Sephora’s mirror uses real-time 3D technology to simulate makeup on a user's face, showing them how different products would look without physically applying them.

Benefits of digital retail

Why would a retailer want to extend their services beyond ecommerce capabilities? Here are the main benefits of adopting a digital retail strategy:

• Enhanced customer experience. Digital retail integrates various channels, providing a more personalized shopping experience. For example, Nike has interactive touchscreens (i.e., “Nike Fit”) that scan customers’ feet and recommend the best shoe size and style. 
• Increased sales opportunities. Digital tools like augmented reality and personalized recommendations help retailers expand their sales force and drive more sales. North Face's "XPS" uses IBM Watson to offer AI-powered personal online shoppers that provide personalized recommendations to customers.
• Data-driven insights. Digital retail tools collect data across different touchpoints. This data helps retailers optimize inventory management, improve the shopping experience, and customize marketing efforts. Kroger Edge is a good example. It uses real-time data to update pricing, promotions, and nutritional information displayed on Kroger’s digital shelves.
• Broader market reach. Using multiple digital platforms allows retailers to collect helpful customer data and reach a wider audience. Take the customer service robot, LoweBot. It collects data on customer inquiries and movements within the store, giving Lowe’s information about frequently asked questions, popular product locations, customer needs, and more.
• Improved brand visibility. A strong digital presence across various channels and stores keeps the brand top-of-mind for consumers. Consider H&M's use of digital signage in its window displays and within its stores. The digital signs showcase promotions, introduce new products with holograms, attract attention, and encourage more foot traffic.

8 ways to implement digital retailing into your business

You may be convinced that expanding your ecommerce business into the world of digital retailing is your next step. But how do you start with the retail digital transformation?

Here are eight ways to implement digital retailing into your business model:

1. Smart sensors for real-time food monitoring

Retailers in the food business should consider using smart sensors as part of their digital transformation. These sensors provide real-time data on food temperatures and quality. 

Implementing these smart sensors in the supply chain helps food retailers monitor perishable items, reduce spoilage, and maintain outstanding quality from production to store shelves.

Walmart uses Internet of Things (IoT) technology to monitor the temperature of perishable goods as they travel through the supply chain. This helps Walmart ensure its products are fresh and safe for consumption.

2. Cloud-based ERP system integrated with ecommerce

Retailers looking to stay organized as they move into digital retailing should consider adopting a cloud-based ERP system. ERP systems streamline business processes by integrating various functions like inventory, order management, and finance. 

Zara is a good example of a retailer that uses a cloud-based ERP system to manage its inventory and order processing. Its system allows for real-time tracking of products across all its global retail locations and rapid restocking.

3. Big data analytics

Big data analytics involves analyzing large sets of data to uncover patterns and trends in customer behavior. Retailers like Amazon use these insights to analyze customer purchase history, browsing behavior, and preferences. 

With these analytics, Amazon can offer personalized recommendations, target marketing campaigns, and optimize inventory management so that popular items are always in stock.

4. Artificial intelligence (AI) 

Retailers can implement AI on their websites and mobile apps to improve anything from SEO and website content to providing better product recommendations and customer service.

Shopify Magic helps with this. It uses AI to generate SEO-friendly product descriptions, simplify your email marketing efforts, and turn live chats into sales opportunities.

5. Automation and robotics in manufacturing

Automation and robotics eliminate human error. These technologies automate repetitive tasks like assembly and quality control. The result? Speedy production and reduced labor costs.

Amazon is a prime example of a retailer using automation and robotics to enhance its fulfillment operations. Its Kiva robots transport shelves of products directly to human workers. This innovation reduces the time employees spend walking around the warehouse and boosts picking efficiency.

6. Mobile apps

Retailers can develop mobile apps that let customers scan barcodes for product details, access relevant product information, and even earn customer loyalty points for purchases.

Starbucks is a digital retailer famous for its mobile app. With a click of a button, customers can find drink recipes, look up nutritional information, see recommendations, and find fun promotions. 

What’s more, Starbucks goes above and beyond to reward customers with stars for using the app to place orders in-store or on-the-go. Customers can redeem these stars for free drinks, food, and other perks.

7. Smart packaging with QR codes

QR codes have come a long way in recent years to help retailers retain relevance in the digital world. By adding smart packaging with QR codes, retailers can drive customers to a landing page with product information or promotional content.

Coca-Cola does this. Customers can buy a Coke and scan the QR code on the can. The code will take them to an interactive landing page with more info about Coke and its new promotions.

8. Augmented or virtual reality

Augmented and virtual reality are fun, new ways for retailers to create immersive brand experiences and product tours.

We’ve already discussed Sephora’s mirror, which offers an AR experience to help customers try on products without physically touching them. But other retailers use this, too. Crate and Barrel's AR scans physical spaces to show customers what products (like tables and chairs) would look like in their space. 

Using AR or VR is the perfect way to showcase your products to customers who use devices regularly.

3 examples of digital retailers 

1. Ruggable

Ruggable is the perfect example of a digital retailer because of its innovative use of augmented reality. 

By integrating AR into its shopping experience, Ruggable allows customers to visualize how different rugs will look in their own spaces. Ruggable achieves this by uploading 3D files to Shopify, which are rendered on the product page and can launch an AR experience. 

Customers can see the rug placed virtually under their furniture, enhancing their decision-making and ensuring they choose the perfect product for their home. This immersive experience improves customer satisfaction and reduces return rates, as customers are more confident in their purchases.

2. Pepper Palace

Pepper Palace is another example of a digital retailer example due to its strategic implementation of Shopify POS. By centralizing its operations under Shopify, Pepper Palace unified its sales channels, inventory, payments, and data into one seamless system. 

This integration helped the brand to scale from 40 to over 100 store locations and grow its customer database by 900%. 

Shopify POS enhanced Pepper Palace’s efficiency, providing faster transactions and improved data capture at checkout. Now, Pepper Palace offers a cohesive and engaging customer journey both in-store and online.

3. Slam Jam

Slam Jam stands out as another successful retail digital transformation story. By integrating Shopify POS, Slam Jam successfully unified its online and in-store experiences, creating a seamless omnichannel strategy. 

This integration enables Slam Jam to provide in-store kiosks, pick-up in-store, click-and-collect, and ship-from-store options. With the help of Shopify POS, Slam Jam was able to personalize shopping experiences, improve inventory management, and capture valuable customer data directly in their stores. 

Since this implementation, Slam Jam has seen a 15% increase in average daily orders and a 122% compounded average growth rate.

Top digital retail tools

1. Shopify Point of Sale (POS)

Shopify POS is a versatile point-of-sale system that integrates with Shopify's ecommerce platform. This system unifies online and offline sales channels, allowing retailers to manage in-store and online inventory from a single dashboard and enhance operational efficiency.

Shopify POS allows target customers to purchase products online, buy online and then pick up in-store (BOPIS), or buy products in physical locations. What’s more, Shopify POS integrates sales data from all channels into one unified system.

2. Customer Relationship Management (CRM) Systems

A CRM, or customer relationship managent,system is essential for managing a retailer’s interactions with current and potential customers. It consolidates customer information, tracks sales interactions, and automates marketing efforts, making it easier to deliver personalized service and targeted marketing campaigns.

By analyzing customer data, CRM systems help retailers understand purchasing behaviors (whether online or in stores), consumer behaviors, identify sales trends, and improve customer retention strategies. 

The integration of CRM software with other digital retail tools ensures a seamless flow of information, enhancing the ability to provide a consistent and personalized shopping experience both online and offline.

3. Augmented Reality 

Augmented reality tools allow customers to visualize products in their own environment using their smartphones or tablets, making it easier to see how items like furniture, clothing, or accessories will look and fit. 

AR enhances the online shopping experience by bridging the gap between digital and physical shopping, reducing the uncertainty that often accompanies online purchases. 

Retailers using AR tools can differentiate themselves from competitors, attract tech-savvy consumers, and boost overall sales by offering an innovative in-store and online shopping experience.

Become a digital retailer today

If you’ve been seeing high sales in your brick-and-mortar stores or crushing your ecommerce sales goals, now might be a perfect time to explore expanding your operations.

There are several tools (including Shopify POS) to help you grow your retail business, keep your processes and inventory organized, and connect with your audience—whether they are online, in your store, or both.