This blog post is based on article from Dimova, N. (2021) Influence of Digitalisation on Consumer Behaviour in Retail.
In the article Dimova discusses how digitalisation has impacted on consumer behavior in retail. How globalisation as well technology are the primary reasons for the changes. How consumers lifestyles, values and desires are changing as well consumers themselves. What was the impact of the Covid 19 pandemic and what are the changes that retails have to do to be able to respond to consumers needs. She will focus in the general changes on consumer behaviour as a result of digitalisation without including specific changes in it.
Traditional retail vs virtual retail
Altough people see the 21st century modern technologies mostly as a good thing it has also brought some challenges in retail businesses as it has changed the way people live and think. More and more people spend time in the internet. This has increased the need of digital marketing. Traditional retailers have faced challenges while trying to meet the needs of younger generation as well the older generation.
There are few differences in traditional retailers and virtual retailers.
While traditional retailers have advance of:
- Convenience location
- Direct contact with the product
- Atmosphere in site
Virtual retailers really benefit of:
- Possibility of purchasing products when ever where ever
- Transparency of information
- Speed of the purchase
How ever the line between these industries have been blurring and more retailers have been starting to practice omnichannel business model. That will give retailers the opportunity to meet the customers needs better. Only retailers who are able to combine both of the indrusties have the competitive advantage.
The importance of trends in changes of consumer behaviour in retail
Trends are big part of the changes in consumer behaviour in retail. Here a few examples of the trends:
- Clean living & minimalist lifestyle
- Pursuing access instead of property
- Artificial intelligence in customer service
- Visual element used in content marketing
- Influencer marketing
Especially young generations favor healthy lifestyles and like to pursue access instead of property. They don’t really want to commit but prefer more freedom and flexibility. Artificial intelligence is used in retail mostly as chatbots. They speed up the process in customer service and are suitable for simple repetitive tasks. While visual marketing and influencer marketing are good ways to attract possible customers.
Retailers reaction to digitalisation
Retailers face serious challenges while transforming their businesses due digitalisation. Companies with physical stores have to focus also offering products online so they can compete with online stores. Many companies live in the belief that something that was successful once should not be replaced. As this is not the case in modern world of digitalisation. If the company lack on digital technology it will have serious consequences both on sales and for business itself. Retailers should pay attention to trends and try to include them in their businesses. For example mobile applications are a big advantage for retailers.
Retailers need to understand and meet their customers needs while digitalisation is transforming retail as well consumers behaviour. The future will certainly belong to online stores.
Conclusion
As a conlusion, digitalisation has really changed the game. Online stores are favoured especially in younger generations such as Y or X. While older generations appreciate traditional retailers. The change have been and will be challenging to the companies while they try to adapt in their best abilities. Trends will control consumer behaviour also in the future and retailers really have to pay attention to it. Retailers really need to listen to their customers even more. As right now but especially in the future digital technology will be necessary tool and without it chances of succeeding as a company will be slim.
Thoughts?
Before this article I didn’t really know that much about digitalisation or its influence on consumer behaviour in retail. I knew the word but not really the information behind it. As scared as I was to start writing this reaction paper about the influence of digitalisation on consumer behaviour in retail I think I learned a lot along the way. What comes to my opinions on the subject, I think digitalisation is a good thing. I just have always wondered can it go too far? And how about artificial intelligence? Can it really happen like in movies that robots take over the world? I surely hope not!
But what comes to the effect of digitalisation on consumer behaviour in retail, I think it’s a good thing. Of course it can be challenging to some of the companies but generally I think companies and retailers mostly benefit from it. The world is constantly changing and I think it’s important to keep up with it.