By: Sunil Munshi, CEO- India, Denave
Redefinition of the retail industry is not new. In fact, this revamp has been set in motion now for a couple of years. Considered to be buzzwords not so soon ago, technologies like AI, Machine Learning, IoT, 3-D Hologram etc. have today changed the retail landscape in a major way. More so, with the digital transformation picking up pace, the most critical entity for any retail business, i.e. consumers, have also undergone a makeover and emerged as a digitally-empowered creed. What other reason could have been pressing enough for the industry to pick up the baton for transformation and jump into the sprint!
How AI and Big Data Analytics are changing the Retailing game
AI enabled recommendation engines have been the source of increased sales for retail players, esp. e-commerce, since quite some time now. Even for the already established brands like North Face leveraging IBM Watson for helping consumers determine what jacket will be best suited for their requirement, has been a successful experience. Amazon Go’s check-out free stores have also been a huge hit owing to the level of customised automation enabled by AI integration. Major brands like Tesco leveraged big data analytics for customising coupons and vouchers for their customers and increased their coupon redemption rate from 3% to 70% is nothing short of a validation of how impactful data analytics can be in retail.
Data is the foremost element for any technology to work upon and in retail landscape, unlike a B2B model, churns out tons of data every day. Having data is like having a gold mine but mining out and processing that gold is also necessary to be able to generate value. Similarly, being able to derive actionable and intelligent insights from that data is like one of the biggest asset retailers can work upon.
With the derived intelligence from data, retailers can:
- Widen their customer landscape because customer retention must always be supported with customer base expansion in order to survive in the competitive market
- Define the sales probability to be able to understand the extent of likelihood for the purchase to happen (and work upon to amplify it)
- Increase sales propensity and thus the likelihood of a consumer making a purchase
- Get directions for doing targeted marketing efforts
AI with Analytics is a hard to ignore case for retailers now. Even on the workforce front, retailers are working in the direction of managing the challenges like lack of familiarity or skill gap.
Fast-paced transformation - What can we expect
Upping the ante in terms of end-consumer experience is one impact while effective and impactful prospect outreach for marketplace expansion is another one which these technology integrations are enabling. Any trends – be it AI, Analytics, Machine Learning or IOT integration etc. they are facilitating our transition into an intelligent retail space from a traditional one.
Things like management of inventory pipeline and how IoT can really help by predicting the inventory exhaustion much in advance or Analytics giving out information which helps retailers make much more informed rather than just gut-based decisions about their campaigns or even AI helping in capturing consumer’s in-store reaction – the possibilities are boundless. And this is not the future we are talking about; all this has already started happening with more and more retailers joining the squad each day.
In a nutshell –we seem to be heading towards a time which may be envisaged as the best time for retail, or rather, intelligent retail. With the tech-supported journey of an untapped entity becoming a prospect and the prospect becoming a buyer and later becoming a loyalist, retailers have a bright way ahead with technology becoming their best ally in ushering them into this journey.