In recent years, we have noticed a significant change in the purchasing behavior of consumers, who have become much more digital, critical, and informed. This forced companies to work hard on a few fronts.

  • Relationship
  • Digital channels
  • Innovation
  • Personalization

This change was accompanied by the leading players in the market, who began to implement omnichannel strategies, significant data capture and analysis tools, artificial intelligence, and some logistics 4.0 innovations. The technological and strategic evolution in retail trade occurred at a slow pace, mainly in Latin America.

However, many plans were anticipated with the e-commerce boom during the pandemic, mainly in logistics and retail. After all, due to the restrictions, most companies had to adapt their structures to continue serving their customers, but remotely.

Which, of course, accelerated some digital transformation processes in retail, already present in other countries. And this evolution must not only be limited to the current situation; finally, the benefits acquired have shown how essential some innovations are to serve the current customer and ensure a competitive advantage, even in the post-pandemic.

Digital transformation in retail

We can say that digital transformation in retail is implementing digital tools and strategies in all processes and stages of companies, from production to management, administration, logistics, and customer relations. The main idea is to integrate digital technology into the company's modus operandi as a whole. This means we are talking about more than just digitization, data capture, or cloud storage.

The digital transformation in retail began with digitization, but with the increasingly rapid emergence of innovations and technologies, a much more profound transformation became necessary. Not only to adapt to the digital age but also to prepare companies for this constant evolution. This means there is no finite digital transformation process in retail; it is an evolutionary development and must have a structure prepared to adapt and embrace new technologies.

In short, a company implementing digital transformation in retail needs.

  • Establish innovation as an integral part of the organizational culture
  • Develop a structure to automate processes, steps, and functions
  • Implement optimization tools
  • Invest in training, research, and development

As you can imagine, digital retail transformation benefits the market, the company, and, of course, the customers.

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The challenges of digital transformation in the retail sector

There are some digital transformation trends in retail, but more and more ways are emerging to meet customers' needs and reach them through digital channels. However, challenges still prevent or hinder the digital transformation of companies.

  • The sector with resistance to change on the part of the least innovative companies.
  • Millennials impose other consumption models that are much more connected.
  • Lack of strategic vision on the part of managers and ignorance of the advantages of digitization.
  • Shortage of talent and digital skills in companies.
  • The low average level of ICT training hinders businesses' digital improvement.
  • Current digital commerce developments focus on the retailer perspective and ignore the consumer.
  • Difficulties were inherent to online purchasing products that cannot be touched or tried.
  • Logistics continues to be a pending issue for e-commerce retailers.
  • Doubts and need for more confidence on the part of consumers on issues such as privacy, personal data, or payments.
  • Absence of initiatives that disseminate the applications and services associated with the digitization of retail.

Main digital transformation trends in retail

As you may have noticed, digital transformation is not just about technological tools but a vast and more profound change in the company's organizational culture. But some tools are essential to enable this digital process. Digitization of physical stores.

More and more retail stores are joining online sales. The creation of e-commerce allows customers to buy at any time from any device, eliminating queues and creating a new user experience. In this sense, it is essential to offer a good browsing experience to the user, a safe purchase method, and an adequate shipping experience. If we control these three aspects, the chances of visitors buying increase.

  • Omnichannel
    Omnichannel takes advantage of all channels so consumers can buy how and when they want. Thanks to this, we can maintain a relationship with the client online and offline.
  • The processes of automation, personalization, and recommendation
    Digital transformation implies reducing those manual processes to focus your attention on other actions that generate profit for your company.
    Thanks to automation, recommendation, and personalization through digital technologies, retail stores can anticipate user needs and make recommendations based on them.
  • Big Data & Business Intelligence
    Closely related to the previous point, applying Big Data and Business Intelligence solutions allows retailers to obtain more information about their customers, such as their behavior in the online store or their preferences, and thus be able to detect through intelligent analytics of data opportunities or weaknesses to improve, being able to create customizations and recommendations with this information.
  • Virtual reality testers
    Another trend in retail is the creation of virtual fitting rooms so that customers can try on the garments or objects from your online store through technologies that combine the live image so that the customer wishes to taste. You can also focus the camera of your smartphone towards the place where you want to see an object placed to see how it would look, for example, a piece of furniture in your living room.
  • Click & Collect
    Buying a product online and picking it up at a point of sale is another trend increasingly being implemented in many retail stores. To carry out a Click & Collect service, it is necessary to have developed a well-defined omnichannel strategy, which allows you to provide this service efficiently and without affecting the customer.
  • Social shopping
    There are currently applications that allow you, through a photo or a live image from your camera, to search for an item on the Internet and buy it.

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Digital transformation is not a solution; it is a process to follow, a path of continuous improvement that requires cultural and strategic change. In this context, technology is a fundamental element of the equation because it allows us to keep up with the increasingly volatile market needs, optimizing the resources and costs allocated.

The retail sector is transforming the digital world, in which the customer is constantly involved, the axis of the actions carried out. Data is imperative to success in this process since we need correct information about our customers and the market to compete.

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