Those being hesitant to digitalization, will soon struggle being competitive!

Digitalisierung im Handel

Everyone is currently talking about the “digitization of trade”. The current market environment for the retail trade has changed rapidly over the past few years and continues to do so at high speed. E-commerce giants have established themselves and continue to gain market share, while stationary retail and traditional shopping methods are being pushed back more and more. The customer behavior is currently subject to a very dynamic and constant change process.

Therefore, the question arises: How should retailers best respond to these challenges? Unfortunately, there is no universal answer to this question. What is clear, however, is the fact that the stationary retail trade is under enormous pressure. The pace of market consolidation will continue to accelerate in the coming years. In the medium term, only those companies will be able to hold their ground in the market that understand how to utilize the upcoming changes in order to make their customers an overall convincing offer. This requires an in-depth understanding of customers’ needs and expectations. The customer has to be put back into the focus of all activities of the retailer. However, this must be done primarily in the context of the alternatives already available on the market. In essence, this means refocusing on what has made the retail trade successful: understanding today’s customer needs and satisfying them better than the competition.

Digitization is the main trigger for this change. E-commerce giants have managed to combine choice, convenience and, increasingly, immediate availability in a form never seen before. Other aspects, such sense targeting, personal advice and a social experience in the real world, will continue to be customer needs that should not be underestimated in the future, where classic stationary retail still has a clear advantage.

At the end of the day, it is a question of which concept can best meet the needs of the customer.


Digitization provides many opportunities to approach customers with new offers and services.

The decision as to whether a digitization approach is the right one or not must be accompanied by the examination of the following aspects: 1. a noticeable added value is created for the customer, 2. processes of the retailer are simplified and thereby costs are reduced, or 3. a direct positive influence is expected on frequency, turnover or calculation achieved and thus on gross profit.

Through optimized processes, employees resources are released, and the dealer can use these free capacities to devote himself more intensively and comprehensively to the needs of the customers. Saved costs can be invested in continuous employees development and training to build new consulting capabilities that maintain and perhaps even extend the lead of consulting quality over the Internet by addressing more general customer concerns (not just individual product needs).

However, absolute caution is required here, because especially with many digitization gimmicks for the POS, the added value for the customer is to be seen very critically. A retrospective of the cost-benefit ratio can quickly turn out to be very sobering. Many pioneers of digitization in retail have already made these painful experiences. 

In principle, it should never be forgotten that the core competence and strength of online retailing lies in digitization itself. The stationary trade must therefore be very careful not to lose itself in the attempt of digital emulation but must concentrate on using it where supplementary added value is created. Digitalization is therefore never an end in itself, but always a means to an end to improve the offer to the customer.

A very important focus of digitization in stationary retail should therefore be on the more intelligent analysis and processing of the available data. With the help of artificial intelligence, better decision bases can be generated in many areas and partly decisions and processes can be fully automated. Companies that position themselves accordingly and gain experience in this area build up the necessary competitive advantages to survive the upcoming market consolidation.

Our Dynamic Pricing software, Panther Pricing, drives this approach as it allows retailers to conduct AI-based price optimizations that are individually tailored to the trader’s performance, inventory, and target situation. This allows a significant increase in gross profits and sales.

Electronic Shelf Labels, digitale preisschilder
Electronic Shelf Labels, digitale preisschilder

In this context, ESL (Electronic Price Labelling) systems, plays an important role. ESL systems provide the ideal example for a digitization approach as the help to simplify processes, collect data and flexibly transfer information flows to the customer. ESL systems offer the ideal synergy to the use of dynamic Pricing systems, as they enable the optimization potential to be fully exploited. 

In summary, digital price labeling in combination with other systems enables an increased degree of flexibility and an associated cost optimization potential. Particularly noteworthy is the enormous revenue potential from the combination of ESL systems with Panther Pricing.

Digitization is a decisive success factor for securing future survival in stationary retail. However, the value-generating components of digitization approaches should be reviewed very critically.

Digitization in the retail sector does not per se lead to success. It is not a one-time change but a constant process of confrontation and struggle with new technologies and application possibilities in comparison to customer needs. Digitization should be implemented specifically where verifiable dealer or customer added value can be generated. It should complement the core competence of stationary retail in a meaningful way to be able to maintain a needs-oriented, highly attractive customer offering in the future.

The survival of retailers will therefore significantly depend on their ability to harness digitalization in a meaningful way and to integrate external experts where their own digital expertise is lacking.

David Picardi
David Picardi
Director of Sales & Marketing
Tel: +49 (0)69/348 76 59 40


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