AI’s role in changing the outlook of the retail industry

Artificial Intelligence is defined as the study of “intelligent agents” and takes place when a device perceives its environment and takes actions that maximize its chance of success at some goal. Colloquially, the term “artificial intelligence” is applied when a machine mimics “cognitive” functions that humans associate with other human minds, such as “learning” and “problem solving.” While traditional data mining extracts data for humans to analyze, AI draws conclusions on its own. AI churns complex data to re-engineer simpler and more streamlined experiences for both retailers and customers at every touch point. AI uses predictive models and machine-learning to advance company strategy and relieve end-user efforts. Research shows that over 45% US retailers plan to use AI in next 3 years. In retail, AI arms retailers with sharper forecasting tools to make smarter business decisions. The use of algorithms increase visibility into ROI implications, translating to results like lower costs and higher sales. AI has brought positive disruption to the retail sector by improving efficiency and it is predicted that by 2020, 85% of customer interactions will be managed by AI. Based on a recent survey, 70% of US millennials and 62% of millennials in the UK say they would appreciate a brand or retailer using AI technology to show interesting products. Below are some of the ways in which AI is helping retail: Inventory effectiveness – Inaccurate inventory management is a high risk for retailers since having too much of inventory is a costly affair, while merchandise being out-of-stock leads to lost sales and customer frustration. The use of AI systems in inventory management reduces the uncertainty...

The Impact of Customer Analytics on Assortment

One of the most vital factors for every retailer to be successful is that they must possess the right inventory and assortment mix. Irrespective of the fact that they might be located at a busy mall or that they may have an engaging presence on social media, what matters the most is that they stock relevant products for their target customers. To add to that, online retail gives customers to chance to buy their desired product from a variety of websites, thus making assortment optimization a key priority for all retailers. The key to effective assortment optimization and achieving maximum sales is to delve into customer data and analytics to grasp useful insights. These analytics enable retailers to identify profitable growth opportunities to make the right retail decisions with the help of customer-centric merchandising. The importance of customer-centric merchandising For effective merchandising, retailers need to use customer data and buying behaviour and integrate those insights assortments and promotions. A prime aspect here is creating localized assortments as this aids retailers to determine which products to offer at which locations and through which medium. According to the EIQ Customer-Centric Merchandising and Category Management Survey, 2017, a whopping 73% of retailers attempt to customize their processes at a local or store level benefit from an increase in overall customer satisfaction. Customer-centric promotions also play an important role in assortment and customer-centric merchandising as these help retailers tap into specific customer segments after studying their buying behaviour. Metrics such as lifestyle and life stage aid retailers to place customers in specific segments and effectively design promotions for them. Thus, the buying behaviour...

The Evolution of Retailtainment: The Face of Retail Real Estate is Changing

With hundreds of stores and malls putting down their shutters, 2017 is certainly a bit of a setback. Whether it’s big names like JC Penney, Macy’s and Sears announcing store closures and numerous other like Payless and Rue 21 filing for bankruptcy, this situation is being coined as the great retail apocalypse of 2017. Retail may be having a meltdown at the moment but at the same time, this does not mean that retailers are going to shy away from brick and mortar. According to EKN’s research on The Changing Role of the Store – Is Your Workforce Ready, by 2020, traditional sales processes will reduce in importance in terms of what retailers expect from stores. At the top will be theme-based stores, fulfilment centers and pop-ups. With disruptive changes occurring in the retail industry, retailers and its workforce need to prepare for and embrace evolving retail formats and technologies to offer customers a unique and frictionless shopping experience. FTI Consulting’s 2016 Retail Outlook Report, shows that 63% of shoppers still prefer to touch and experience the product. Thus, a vast number of shoppers still prefer shopping in stores and online shopping cannot replace the allure of the shopping mall. So, what are retailers and developers doing to attract more shoppers to malls? Retailtainment is the answer. Retailtainment is the concept of adding entertainment and experiences to the retail mix. This trend started a while ago since malls started adding typical forms of entertainment and leisure activities, like gaming arcades, bowling alleys, and movie theatres to that attract consumers. Today, entertainment concepts have evolved beyond the movie theater and...

Is Digital Transformation working in the Path-To-Purchase Journey? – Part 2

In our previous blog post, we spoke about the digital disruption of the path-to-purchase journey and how technology is affecting the way in which retailers operate, allowing customers to interact online, in-store, in-app, on-phone, in the cloud and via social media. However, the surprising fact is that in spite of the omni-channel retail experience being the strategic focus for many retailers, a large percentage of shoppers – particularly women and millennials still want an in-store experience. This is because women view shopping as a leisure activity for the purpose of entertainment and fulfillment besides need and utility, while millennial consumers want a touch-and-feel experience while they shop along with an equal affinity towards digital. EKN data shows that 75% millennials shop online and two-thirds shop in-store at least once per month. This shows that both digital and in-store affinity is prevalent among millennials. EKN’s Framework for Omni-channel Personalization data shows that 86 percent of consumers will pay up to 25 percent more for a better customer experience. But are retailers adopting the right measures to enrich the shopping experience for customers? Fortunately, the amalgamation of retail and technology has been an effective and positive one, and retailers are integrating innovative digital experiences at their physical outlets with the presence of digitized kiosks, touch screen navigation panels, interactive digital displays and other digital tools to ensure an engaging in-store experience. According to a survey carried out by Samsung, 94 percent of retailers believe the customer of the future will be driven by technology and 41 percent are already using it to implement a strategy to enhance the customer experience to...

Is Digital Transformation working in the Path-To-Purchase Journey? – Part 1

It is a well known fact that the emergence of online shopping has drastically changed the way we shop and besides brick and mortal stores, online shopping plays a very important role for every brand. But, is digital transformation based on what customers expect from companies or is it based on a tunnel vision of re-producing experiences that may not be relevant to the core customer base? EKN’s 2016 Profitable Omnichannel execution data indicates that only a third of retailers ‘occasionally” consider the customer perspective in devising omnichannel strategies. In today’s digitally connected age, it is a well-established fact that the internet has become an essential part of the path-to-purchase process irrespective of whether the purchase is made online or in a store. Social media is a large influencing factor for customers to make a purchase. From traditional modes of marketing and advertising on television, radio and print media, the path-to-purchase process has now undergone a digital disruption. Such a process often relies on pre-shopping activities like searching for products online, reading their reviews on blogs, forums and shopping websites and comparing them with other products available. The actual shopping transaction may be in store or via online shopping and the post-shopping activity consists of word-of-mouth recommendations, online reviews and social media posts. Thus, the process of buying has now become a merger of various online and offline activities. Shoppers can be categorized into three segments – ones who prefer shopping in physical stores, ones who prefer shopping online and ones that prefer shopping on both channels. Thus, retailers need to keep all three types of customers in mind....