There’s been a major shift in the way consumers shop. With global retail giants like Alibaba and Amazon disrupting the traditional order of things, businesses have begun to realize the importance of data, AI, automation and omnichannel innovation.
Customers, meanwhile, are present across more channels. They are less predictable, and they leave behind a constant footprint of data. These data trails, when combined with other circumstantial information, are the key to unlocking the future of commerce. The biggest retailers are already vast, data-driven machines. They use granular insights to make automated decisions that ensure their customers’ needs are answered at every turn.
Smaller or more traditional retailers, however, shouldn’t lose hope. Such businesses are in the perfect position to innovate alongside the commerce behemoths in the digital landscape, and embrace new innovative technologies to improve their own local and global marketing strategies and customer experiences.
What’s changed in retail?
The ubiquitous adoption of smart devices and technology is responsible for the rise of demanding consumers, and is key to providing a more seamless experience for shoppers. The customer journey has drastically shifted over recent years; a purchase may start offline and finish online or vice versa, making a single customer view incredibly hard.
“By analysing and exploiting data effectively, and using micro-location-based beacon technology, retailers can target customers more effectively with personalized deals or suggestions. Retailers that dedicate resources to a data science specialist will discover the secret behind modern customers’ predictability and enhanced user experiences; the cornerstones to successful modern retailing.”
Chief Executive Officer, Blue Yonder GmbH
Getting ahead of the competition has always been a struggle in retail, as a fiercely competitive field in which product availability and competitive pricing can easily lure shoppers away.
Over the last 18-24 months, over 2000 new companies have launched in the analytics space. Retailers now realize they have to enhance their analytics capabilities, but that there’s no simple, turn-key solution.
Innovation is nothing to fear
For the biggest retailers across the globe, like Alibaba and Amazon, data and AI has been part of their operational and cost-saving strategies for some time. For others just starting on their innovative journies, the concept is daunting, generating fears over job losses and skills consolidations.
The fear of AI needs to be understood and tackled by all retailers, regardless of their size. Progression in data science is no scarier than other technological advances we take for granted as consumers.
“With the rapid development of technology disrupting entire markets, retailers must make AI central to their business strategy in order to push innovation forward. In the era of digital transformation, they must take the initiative and move to more advanced environments that are compatible with the new breed of digital services. Those who continue to operate on old and outdated replenishment solutions will be left behind."
Chief Executive Officer, Blue Yonder GmbH
To compete with the major disruptors in the industry, retailers may consider innovating at a tactical level. This may mean using technology to improve the customer experience in the physical store environment.
A single customer view
In an industry that has had access to huge datasets for decades, it’s surprising that only 8% of retailers say that data has given them a single view over their consumers’ behavior, according to PWC.
What’s more, the skills that retailers need to achieve this view are not all native to the retail industry. For many, innovation will require investments in strengthening their IT and technological capabilities outside of the store.
A third-party provider like Blue Yonder, with proven expertise in retail data insights and AI, can help retailers understand their disparate customer data, as well as analyzing local demographics, buying patterns, and other circumstantial data, to achieve an elevated customer viewpoint.
The AI-driven solutions from Blue Yonder, for example, can provide retailers the opportunity to automate high-level strategic stock and price decisions, as well as offer highly personalized experiences.
You don’t, therefore, have to be an Alibaba or an Amazon to truly innovate; all retailers have the opportunity to use data and automation to improve their customer experiences, and win in the next era of commerce.