What is digital transformation?

Digital transformation (DX) refers to the integration of digital technologies into business processes to better address changing market demands and customer needs.

Explaining digital transformation

Source: Gettyimagesbank

Digital transformation reimagines brands for the information age. In this reevaluation, companies take a step back, revisit how they do business, and integrate digital technologies where necessary. It takes a closer look at company culture and all business processes – from internal systems to client interaction – and implements fundamental changes to current practices. Essentially, it is a technology-focused cultural shift that reexamines the status quo. This process asks whether a company is doing things right and where it can do better.

The DX process varies for every organization. It attempts to answer a problem or plan towards a goal or opportunity unique to the company itself. Entrepreneurs might engage in this undertaking to reduce friction in the purchase journey, boost productivity, improve the brand’s agility, or even ensure the company’s survival amid shifting market demands and intensifying competition. Although its reasons may vary, digital transformation always focuses on the customer and aims to provide better value to them.

Digital transformation can happen in different ways. For example, a brick-and-mortar retail store could set up a Direct-to-Consumer (DTC) e-commerce website to create a more omnichannel presence. Doing so opens up access to new audiences. It offers the capability to nurture prospects at scale without the extra costs of rent or utilities. Meanwhile, a company relying on billboard advertising can instead shift its budget towards social media ad campaigns and email marketing. The latter can offer greater personalization and targeting options.

Why digital transformation matters

Companies worldwide are increasingly engaging in digital transformation. Projections expect spending on digital transformation technologies and services to reach 2.39 trillion dollars by 2024, in line with its steady year-on-year increase since 2017. Its growth continued even amid pandemic-induced economic downturns. By 2023, 52% of enterprises would have digitally transformed their operations. These statistics show how crucial DX is for any business moving forward, and it is no different for retailers and e-commerce brands.

DX transcends the mere adoption of new tech and addresses changing customer expectations and industry disruptions. This idea is particularly important for e-commerce merchants, as today’s shoppers increasingly look online for purchases and prefer having a seamless omnichannel shopping experience. Successful digital transformation can propel online entrepreneurs to greater heights of success.

One merit of digital transformation for e-commerce is its enrichment of the customer experience. Techs like virtual reality (VR) and augmented reality (AR) make the purchase journey more immersive, while artificial intelligence (AI) helps tailor special offers and product recommendations to each shopper. These innovations bridge the gap between online shopping and the in-store shopping experience. As Cafe24 CEO Lee Jaesuk said, adoption of these digital capabilities in e-commerce will eventually help “fulfill that enjoyment aspect in shopping, which in the past was only offered via brick-and-mortar retailers.”

With digital technology at the center of operations, businesses – especially DTC ones – gain broader access to vital data like website performance metrics and customer behavior analytics. These data points help brands make sound business decisions based on tangible, quantitative information. By steering merchants towards a more data-driven approach to e-commerce, DX empowers them to outperform the competition.

Moreover, DX prepares businesses to be more responsive to market shifts, customer demands, and unexpected disruptions. Interconnected digital systems make it easier for merchants to adapt to sudden changes – even if those are beyond their control – and come out on top.

Cafe24 offers robust support for DTC brands’ digital transformation journeys

Cafe24 understands the critical need for digital transformation among players in the e-commerce space, which is why it assists merchants in their respective DX efforts. The Cafe24 Store is home to apps that utilize cutting-edge technology, which entrepreneurs can then integrate into their DTC stores to bolster their digital capabilities.

Merchants who are interested in AI can use Cafe24’s self-developed tool Edibot for content design. Groobee is another app that harnesses the power of AI to deliver personalized product recommendations, winning over customers by tailoring the shopping experience to individual preferences. Meanwhile, in the case of AR, online entrepreneurs’ options include Lololooks and Style AR – both of which enable virtual try-ons of various products like jewelry, bags, eyeglasses, hats, and shoes.

These services bridge the gap between e-commerce and in-store shopping, creating remarkably immersive online counterparts to traditionally offline experiences. With Cafe24, merchants have a way to utilize the latest technologies to gain a competitive edge and a partner that clears the path to local and global success.

View All