The paradigm shift in retail means customers are more informed, have more choice, and are more price-savvy. Life in lockdown has amplified and accelerated this change, with consumer buying habits transforming further in recent months and with lasting impacts. New buying behaviors and consumer expectations have led retail companies to explore new avenues and drive innovation at scale. The recent disruption has brought new opportunities, but has also revealed significant gaps in retailers' ability to balance demand and availability, while ensuring secure, contactless shopping. Several retailers have struggled to cope with increasing online demand, inventory shortages due to asymmetric demand patterns, and an imbalance in the workforce to fulfill customer service and orders. While the immediate focus is on employee wellness, cost and capital optimization, in the long term we see our retail clients preparing to become more resilient and adapt to such changes. and challenges. Omnichannel assortment planning, maintaining inventory visibility, order management, last-mile delivery, channel integration, and ensuring supply chain resiliency have now become top priorities. Retailers that can orchestrate all of this, while implementing new business value propositions, will be better positioned for the future. To effectively address these challenges, it is time to integrate data and insights across the value chain to solve pressing problems and discover exponential value through algorithmic interventions. The algorithmic sales journey requires:
- Take a unified business approach to building a strong organization based on a data-informed foundation;
- Create a unified value chain that cuts across organizational silos and clearly shows where and how to use algorithmic interventions within the value chain; and
- Have a flexible operating model that can take advantage of ecosystems, that is, a unified ecosystem.
Unified enterprise across channels for algorithmic retail
To thrive, businesses need a single view of the customer, regardless of the channel they use. This requires seamless integration of business systems to consistently satisfy customers. Organizational transformation using an enterprise-wide machine-driven approach will enable greater agility in meeting customer needs. A critical part of this will be investing in an omnichannel shopping experience, which will benefit both customers and retail staff. Activating a single cart, single order, single wish list across all online and offline channels is now a possibility through various unified eCommerce platforms now available. The global cart feature helps customers seamlessly switch their shopping journeys between devices, from online or mobile apps to kiosks; from the app associated with the store to the checkout. Enabling technology like this can also help retail staff. For example, a seller can search for items that are not available in the store and add them to the customer's digital shopping cart, allowing the customer to continue with the sale. An omnichannel approach is essential to maintaining a strong customer base as we enter a post-COVID retail space. A machine-driven business approach enables retailers to keep up with changing customer expectations and the business landscape. At a time when security has become paramount, the machine enables retailers to offer contactless shopping and the best experiences for their customers in the first place.
Unified value chain: moving from silos to value chain optimization
AI is not new to retail; however, those who can identify how to create the most value from algorithmic interventions expect big gains. Customers expect a unified experience, and data and insight analytics can no longer operate in silos. The power of algorithmic retail can only be harnessed by combining data and insights to optimize business processes at scale. By leveraging AI to gain a cross-channel view of price, assortment, promotions, and last-mile delivery, retailers can use AI-powered retail optimization solutions to respond in real-time leveraging insights, gaining recommendations for next best actions and redefining customer experiences. For example, for companies struggling with running costs and truck usage, a neural AI-powered replenishment solution can transform the supply chain. With near real-time, simultaneous, multi-dimensional modeling and optimization across stores, distribution centers, and transportation, companies can improve uptime and customer experience while reducing waste and service costs. For retailers looking to improve the lifetime value of each customer, data collection throughout the omnichannel journey is a must. To enable large-scale hyper-personalization across all channels, retailers need to orchestrate customer journeys through intent-driven, AI-powered solutions that algorithmically design the entire chain of recommendation systems in real-time. Although retailers continue to face fundamental issues like shrinkage, waste, inventory accuracy, and labor productivity, changes in the macro environment are pulling them in all directions that are forcing a big reset. . These include redefining the role of stores, recalibrating store cost structures, exploring new business models, and preparing the workforce to adapt to the new normal. AI-powered store optimization solutions enable retailers to reinvent end-to-end store operations and optimize operating costs, improve productivity and improve customer experience by reinventing operations. stores through digitization and cognitive automation.
Unified ecosystem: moving from product to function
Changing consumer preferences and growing markets are forcing companies to rethink retail and reinvent the customer experience. Retailers are changing their strategy from a product-centric to a focused strategy. The relationship between the retailer and the customer is moving from a transactional state to a more comprehensive solution provider. Retailers create and operate ecosystems that often transcend the traditional boundaries of partners and stakeholders to meet customer needs. Forward-thinking retailers are embracing an enterprise-wide collaboration strategy and working with new ecosystem partners to become the custodian of the customer experience. Networks can no longer be limited to long-standing, static partners; a new generation of short-term and dynamic partners will also have to coexist. Retailers must also provide "what ifs." For example, algorithm-driven smart grid modeling that enables retailers to dynamically switch suppliers in the event of supply chain delays or disruptions. By taking this customer-centric approach, companies can completely reinvent their business model and create a unique market proposition to stay ahead of the competition. By leveraging ecosystems in this way, retailers can improve sales, increase online revenue, and increase digital traffic with higher average orders and conversions. It's time for bold moves. Retailers must identify a space for algorithmic interventions in their value chain. A holistic, goal-driven, AI-driven overview that combines data spanning the company, its customers, and suppliers will help them create a competitive advantage. These algorithmic retailers have the best opportunity to meet the challenges of today and tomorrow and create new market opportunities.