As retailers face sustained economic pressures, shifting consumer expectations and rapid technological change, digital transformation has become a strategic priority. Our latest blog highlights where we see leading retailers focusing their investments – and why a measured, long-term approach is key to staying competitive in a connected retail landscape.
Retail continues to evolve at pace. From economic pressures to burgeoning consumer expectations and the accelerating impact of technology, retail leaders are navigating a constantly shifting landscape that is markedly more complex than it was even just a few years ago. However, it’s also more full of opportunity; according to PwC, global spend on retail technology is forecast to grow 10% annually between 2024 and 2028, more than double the growth rate of the previous four years.
“Retailers today are navigating changing and competing demands – where the most successful retailers embed agility in their organisation to respond and pivot quickly. They make decisions faster (and learn from them). They make use of partners and select acquisitions. And they continually self-fund growth.”
Jacqueline Windsor, Partner, Strategy & UK, PwC United Kingdom
Digital transformation has moved from an aspirational concept to a critical enabler of both operational resilience and long-term growth; few businesses can afford to ignore this trend and still survive. As expectations rise and competitive pressures increase, now is a pivotal moment for decision-makers to assess which investments will best support their strategic objectives, and whether they can withstand the longer-term implications of falling behind.
Why digital transformation matters now
Retail technology is no longer optional; it’s a critical lever for differentiation and long-term value creation. “Retail technology is critical to mitigate headwinds in the short-term, and create sources of differentiation and value in the longer-term,” explains Sam Farnfield, Director at Strategy& UK, PwC. “There are opportunities right across the value chain, with technology giving retailers the ability to revolutionise their approach, adding simplification and efficiency to cut-out cost while improving the customer experience.”
Consumers, meanwhile, are expecting seamless, meaningful experiences. With the UK leading Europe in mobile commerce – 43% of retail sales are now made via smartphones or tablets – an integrated digital infrastructure is no longer just nice to have; it’s essential for relevance. In parallel, there has also been a clear resurgence in the value of physical retail – provided it delivers on ease, efficiency and experience.
And omnichannel shoppers are well worth holding onto. According to WARC’s ‘The future of digital commerce 2024’ report, these adaptable repeat customers have a 30% higher lifetime value than single-channel shoppers. This makes investment not just beneficial, but essential for retailers aiming to retain and grow their customer base.
Top investments forward-thinking retailers are prioritising
Retailers are increasingly finding that achieving meaningful progress requires both operational and experiential improvements – ensuring that what happens behind the scenes is as considered as what the customer sees and feels. Here are a few of the key areas in which we’ve seen particularly strong interest:
Omnichannel strategy optimisation
Creating a coherent and consistent customer journey across digital and physical touchpoints is now expected as a minimum. Retailers are refining capabilities in areas such as real-time inventory visibility, click-and-collect and seamless returns – practices that offer both convenience to the customer and efficiency to the organisation.
Progressive brands are focusing on making omnichannel logistics and customer interactions feel less like a patchwork of systems and more like a single, intuitive journey. For example, brands like B&Q have transformed parts of their stores into fulfilment centres to streamline last-mile delivery; shifting to ‘dark stores’ leverages existing infrastructure meets booming e-commerce demand without sacrificing convenience or speed.
In-store technology integration
From mobile point-of-sale and contactless payment to interactive displays and self-service kiosks, in-store technologies are reducing friction and enriching the customer experience. Currys, for example, is deploying automation (from electronic shelf labels to robotics), to counter rising labour costs and improve operational efficiency.
In many cases, these enhancements do more than improve satisfaction, they support increased dwell time, better conversion rates and valuable insights into customer preferences and behaviours.
Our own Aura survey supports this direction of travel: 68% of retailers said they plan to invest in digital in-store experience technology in the next two years, including intelligent digital signage (45%) and immersive interactive displays (35%).
Personalisation and data-driven insights
Retailers are continuing to invest in data platforms that enable more tailored engagement—whether through personalised offers, product recommendations or content. Machine learning and AI are playing an increasing role in anticipating customer behaviour, which can support smarter merchandising, more relevant marketing, and more informed strategic decisions.
Done well, personalisation can help retailers foster loyalty in an environment where differentiation is increasingly difficult to achieve. Tesco’s expansion of AI-based personalisation using Clubcard data exemplifies this; by anticipating customer preferences and tailoring the shopping journey, retailers can foster loyalty and reduce waste – a win-win.
Three in ten of the retailers we polled have already implemented AI solutions in-store. And given that omnichannel customers typically deliver higher lifetime value, investment in real-time data, predictive analytics and personalised touchpoints is fast becoming a strategic imperative.
Sustainable digital practices
Sustainability remains a strategic priority for many retail organisations, with customers, employees and investors alike paying closer attention to environmental and ethical performance.
Digital tools are helping retailers to surface and share sustainability credentials more effectively – whether through supply chain transparency, product labelling, or digital content that communicates progress and purpose. At the same time, more efficient digital operations are contributing to long-term environmental targets.
The cost of inaction
While digital transformation is not without its challenges, the risks of underinvestment are becoming clearer. Brands that failed to respond to changing customer behaviour in time—often due to inflexible estates, underdeveloped digital strategies, or internal silos—have lost market relevance, sometimes permanently.
The cautionary tales of Debenhams and Topshop are stark reminders that no retailer is too big to fail. Both brands fell victim to outdated models, underinvestment in digital and an inability to keep pace with changing consumer behaviours, as well as the drag created by the fact they had large estates and sizeable, inflexible overheads. While online-first competitors thrived with nimble omnichannel and personalised offerings, these legacy giants faded – ultimately becoming online-only after administration.
Conversely, early adopters of integrated digital strategies have often seen long-term returns in terms of customer retention, brand value, and operational flexibility.
The cost of inaction isn’t just financial; it can mean missing opportunities to modernise infrastructure, future-proof capabilities, and attract the next generation of customers.
How retailers can get started
For many organisations, the starting point is not a technology conversation, it’s a strategic one. The most effective programmes of change are built around business goals, with digital transformation designed to support long-term growth and efficiency, a more resilient and responsive operating model, and improved colleague and customer experience.
Key early steps often include aligning digital investments with overarching business priorities, ensuring projects are tied to measurable outcomes and long-term value. It’s important to balance quick wins with lasting impact – phased roadmaps allow room for experimentation while maintaining a clear strategic direction. Equally vital is considering the human element: engaging colleagues through training, internal communications and change management can significantly boost adoption and success.
Finally, selecting the right technology partners brings both expertise and objectivity, helping to navigate complexity with greater confidence and clarity. Retailers today are operating in an environment that rewards clarity, agility and sustained focus. While transformation is rarely simple, it can be made more manageable – as well as more successful and profitable – by building strong cross-organisational teams and drawing on the support of the most knowledgeable specialists.
Those making thoughtful, well-aligned digital investments now are better placed to adapt, compete and lead in a connected, customer-centric future.
To find out more, speak to one of our friendly, knowledgeable team members on 0207 2 400 800 or email info@aurafutures.com.
