Abstract
The study examines digital transformation’s effects on Tamil Nadu’s retail and manufacturing sectors by incorporating digital technologies into operations. It compares traditional methods with digital approaches to assess impacts on profitability, customer retention, and efficiency. Data was collected from three retail and two manufacturing firms using a structured questionnaire with 50 respondents. Both quantitative and qualitative analyses were conducted to assess changes in sales, inventory, and customer interaction. Traditional retailers saw a 20.8% drop in growth and profitability due to online shopping, which changed customer behavior and reduced store visits. Customer retention rates fell from 85% to 70%, highlighting the need for improved engagement strategies. Manufacturing firms gained from digital transformation through enhanced efficiency and supply chain management, though they faced challenges such as resistance to change. The findings indicate that traditional retailers must adopt digital marketing, hybrid models, and training to address resistance and skill shortages. Manufacturing companies should continue improving digital capabilities to enhance production and stay competitive in a changing market. The study concludes that while digital transformation poses challenges like reduced retail profitability, it also provides opportunities for efficiency and market growth in both sectors. These insights guide companies and policymakers toward a strategic approach to digitalization for sustainable growth and competitive advantage.
Keywords: Consumer Behaviour, Digital Transformation, Manufacturing Firms, Online Shopping, Retail Industry