If developments of the last few years are anything to go by, no one would bat an eye if retailers felt like Julius Caesar during the Ides of March.
In India, malls and retail stores have seen a substantial drop in footfall as well as revenue since the onset of COVID-19 in early February last year. According to a survey conducted by the Retailers Associations of India, business in the retail segment dropped 20-25 percent last year. Recently another crisis also hit the shores on March 23, which took the retail industry into another spin – a ship sailed into a canal.
This may sound like a joke, but certainly not for retailers. After all, the ship that ran aground in the Suez Canal was the 400-meter-long Ever Given. The subsequent blockade was all over the news worldwide and was also part of social media memes. This got aggravated and the incident had been generating daily losses of more than US$9 billion by restricting a shipping lane that handles 12 percent of the global trade.
The worst bit? Natural and manmade disasters doubled up troubles in the retail ecosystem.
Data and the Double Whammy
BlueDot, an AI-based outbreak risk prediction system, recognized the indicators of an epidemic by analyzing real-time data from thousands of sources long before COVID-19 was classified as a pandemic. Long before governments announced full-scale lockdowns to stem the rapid spread of COVID-19, the alarm was raised on December 30, 2019. Industry losses would have been substantially lower if retail players had paid attention to and used the data to make informed business decisions.
The level of unpreparedness in the case of the Ever Given disaster, was even more perplexing. Even though experts had warned about the exponential expansion in ship sizes for several years, the port handling capabilities and shipping channel capacities had remained essentially unchanged. Concerns have also been raised on the incremental hazards posed by megaships, where a single delayed vessel might have a cascade effect on trade and businesses across regions and industries. No one paid attention until the worst of forecasts came true.
These two scenarios may appear to be diametrically opposed at first. After all, one was a decade-long man-made disaster, while the other was a natural tragedy that was unavoidable. On a closer look, both situations were linked by data. There was a wealth of information accessible before and throughout both incidents. The retail industry could have overcome these situations if they had utilized the available data effectively.
It is during such hard times that companies should apply Active Intelligence in their business, which is a new paradigm that delivers continuous intelligence using real-time and up-to-date information. Implementing Active Intelligence would have helped the industry to handle such crises more efficiently by understanding what was happening in the business through analysis of the information and insights available.
Future-Ready Retail Sector
Let us take a real-world example - Sathya Agencies. Sathya Agencies is an e-commerce and bricks-and-mortar retailer with 140 stores in Tamil Nadu and Pondicherry. They offer products across consumer electronics and home appliances. The company has been continuously using insights from the data available and developed business strategies, models, and policies based on it.
With the help of Qlik Sense, Sathya Agencies has been able to lower their trade average inventory days from 60 days to 45 days. By effectively analyzing data and making data available for the business team to use, the quality of data-driven decisions drastically improved even during the crisis.
Building a Resilient Global Retail Industry
In the event of a pandemic, retailers using an Active Intelligence-based architecture can factor in the effect and transmission of COVID-19. This will help them in their supply chains by including healthcare incidence and travel data. Such real-time, contextual information generated based on current conditions and future estimates, can aid in the development of alternative sourcing and distribution channels, allowing businesses to stay ahead of the competition.
Active Intelligence could have played a pivotal role in the Ever Given crisis. At least, the impact would have been minimized if Active Intelligence, along with proper analysis, had been applied. Once the crisis was underway, the system could have helped retailers contain its impact on their operations by evaluating various factors such as shipment delays, container availability, demand-supply dynamics, and healthcare information, among other factors.
There are companies that have considered data and analytics as a major driving force to overcome the pandemic. Indian Oil used Qlik solutions to analyze the situation and take necessary steps to adjust their business. During the pandemic when mobility was restricted, Indian Oil depended on data for insights which was derived from sales analytics, purchase patterns, loyalty-based analytics, bank data, and customer feedback. The contextual insights gained aided them in avoiding future disruptions and identifying other potential bottlenecks and obstacles, such as the second wave of globalization sweeping across many South Asian nations. Hence, AI-based predictive analysis enables resilient and adaptive supply chain architectures.
This simply is the tip of the iceberg when it comes to the impact that Active Intelligence's hyper-contextualized data can have. It can assist retailers in implementing dynamic pricing based on real-time elements like demand and supply, and procurement prices. It can also assist retailers in implementing hyper-personalization in their marketing and client retention efforts. Inventory management can be automated and streamlined to improve operations and deliver better business outcomes.
Saying that the pandemic and the Ever Given blockage are once-in-a-lifetime events will be more than an understatement – it will be a prayer that such cataclysmic events never happen again. There is, however, no certainty, and retailers must become more resilient and flexible in order to prepare for current and future mayhem. In a world as interconnected and dynamic as ours, Active Intelligence is the only option.