How Artificial Intelligence is Powering Retail Transformation
Artificial intelligence will very soon be a cost of doing business for retailers. That’s one of the messages that emerged strongly from a recent retail forum hosted by Microsoft in Melbourne.The rules of engagement in retail have changed but many retailers are continuing the practices of 60 years ago.
Today, retailers need to empower their employees with data-driven insights about their customers, and use data to optimise their operations and build an agile organisation. Of the retail leaders who are taking the digital transformation bull by the horns, 55% cite changing customer behaviours and preferences as the primary catalyst. Born-in-the-cloud retailers such as Amazon and eBay set the bar high for meaningful recommendations, optimised product assortments, fast shipping, easy payments and so on. And increasingly savvy customers expect no less than exceptional, personalised shopping experiences.
Meanwhile, the democratisation of AI means it is rapidly becoming available to all retailers.
Microsoft provided some key statistics to support this:
- A majority (57%) of retailers expect AI will improve customer service and support.
- By next year, 40% of retailers will develop customer experience architecture supported by AI.
- That number rises to 45% when looking at the proportion of retailers who plan to use AI in the next three years.
Artificial Intelligence enhances customer engagement and operations by accelerating what can be done with data in an even more compelling way.For instance, the digital assistant is taking more of a central role in the customer experience, anticipating customers’ needs before they voice them. The Internet of Things and Augmented Reality are also key to transforming the in-store experience and bridging the digital and physical shopping divide. Despite that, the use of in-store behavioural data to create compelling in-store experiences is still a relatively untapped opportunity.
This was Microsoft’s version of the shifting Retail Paradigm:
- Information scarce to Information abundant
- Command and control to Stores have a Voice
- Stores to Clubs
- Individual productivity to Collaborate to Win
- Efficiency of Process to Experiment, Learn and respond
- Big Data, Insights to Hyper local, Small data
- Screens to Voice
- Mobile-first to AI-first
- Online, offline to Commerce – a single, seamless channel
There were also some great examples of innovation and digital transformation at the coalface of retail. In one such case, wellness brand Blackmores revealed how they developed a smart bottle with which customers could interact in real time via their phone for localised offers or information. It was also integrated with a stock monitor that alerted distribution centres when to arrange re-supply for that particular SKU. Amazingly, this prototype was launched within five weeks from concept to development.
New Zealand furniture brand Città described how they empowered salespeople with real-time CRM data to create better customer experiences – and it helped them not only to attract more customers, but also to provide better customer service during each interaction. They also leveraged AI during the forecasting and planning processes for better accuracy and speed in fulfilment. As Città chief operating officer Grant Taylor pointed out, it’s not just about implementing new technologies, it’s what you do with them. He also encouraged retailers to challenge business processes to create new and unique opportunities.
At Simple, we are working on a new Intelligent Marketing Platform that will enable retailers to optimise processes and create more informed marketing campaigns from conception. AI will inform the briefing process with the knowledge of what has worked before, and what is likely to work well in the future.