AI Revolution in Retail and Consumer Products

Artificial Intelligence, abbreviated as AI, has been at the centre stage of business innovation since quite a few years now. It shows no signs of slowing down anytime soon. Instead, going by the recent trends, its adoption is expected to increase manifolds in the next couple of years. The rapidly growing competition in the retail industry requires the players to consistently innovate with their consumer products. They need to improve the efficiency of business processes and improve decision-making – exactly what AI is equipped to help them achieve. This will ensure consumer loyalty and further increase their base, helping them to stay buoyant in the challenging retail market conditions.

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A recent report titled “The coming AI revolution in retail and consumer products” conducted by the global IT company, IBM, predicts a bright future for AI-powered innovations. Conducted at the 2019 Big Show, which was hosted by National Retail Federation, the study included participants from 1,900 retail and consumer products from 23 countries.

Let’s take a look at the salient points of the report that was released by IBM’s Business Value.

  • 79% of consumer products and 85% of retail organizations that participated in the survey revealed their plans of integrating AI in their existing better supply chain planning by the year 2021.
  • Two out of five retailers already use AI, and the number is expected to become double by 2021.
  • The retailers surveyed believe that AI may push up their annual revenue growth by a significant 10%.
  • Artificial Intelligence plays an important role in automating demand forecasting and customer engagement.

 

 

 

Why is customer data and analytics beneficial for retail?

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Technology has been an enabler for most businesses to achieve better outcomes. The retail business has witnessed tremendous disruptions across various aspects in terms of operations and processes, thanks to technology. Today, the retail sector is the best example of how a business can evolve and one of the major reasons for this has been the customers – they adopted technology, and with that, not only their purchasing behavior, but also different stages of their shopping journey evolved, leaving retail companies no choice but to follow suit.

Tech-savvy customers being the drivers of the retail evolution led to one of the biggest advantages for retailers – the ability to acquire customer data, and translating that data into powerful insights that enabled in better decision making. Listed below are some of the important and tangible benefits that customer analytics based decisions have:

Streamlining retail campaigns: Retailers can channelize their marketing efforts and optimize costs.

Having competitive pricing: Retail brands can price their products based on demand and customers’ expectations and market trends.

Enabling customization: Retail customers can be provided with a combination of features or service that satisfy their needs.

Reducing wastage: Retailers can manage their inventory better by proactively anticipating customer demands.

Facilitating faster delivery: Knowing local demands and trends will enable retailers to set-up the right supply chain management system to fulfill customer orders.

Fostering customer loyalty: Offering the products at the right prices enhances customer satisfaction and leading to loyal customers.

Increasing profitability: All the above factors will lead to higher profitability for the retail business overall.

In today’s retail scenario, the customer is key. Retailers can ensure increase in profitability and sustainability of their businesses by focusing on the customers, knowing and understanding their needs and fulfilling them as and when the customers’ desire.

How unified commerce is unifying customer experiences

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Price and product are important parameters for customers to make decisions related to their preferred brands and have long been dominating the decision making process. But now, customer experience is the biggest differentiator for retail brands standing out. So much so that it has already overtaken price and product as the most sought after parameter for the customers. Thus competition amongst retailers on the customer experience front seems to be intensifying immensely. As reported by Gartner 89% of retail businesses are expected to compete mainly on customer experience. Howbeit, adding more customer touchpoints, retailers are finding it increasingly difficult to manage a harmonious customer experience across channels.

The need for a unified and seamless customer experience is profound in this new age of shopping. The lingering fear of customer churn owing to inconsistent shopping experiences, the probabilities of lost sales and loyalty shift to competitor brands are some of the major concerns that modern day retail businesses are battling against. One dependable solution that retailers must look to for emerging champions in the customer experience arena is ‘unified commerce’.

Going by an important statistic according to a Boston Retail Partners (BPR) report, more than 70% of retailers have plans to implement a unified commerce platform before the turn of the decade. Further, a definition of unified commerce by BPR states that ‘unified commerce places the customer experience as first priority by leveraging a single commerce platform. A single platform rids of internal channels that operate in their own silos. Instead, merchants leverage a “single, centralized, real-time platform for all customer engagement points.” In this way, unified commerce is achieved’.

Following the definition above, it is clear that ‘unified commerce’ relies on two fundamental aspects that are key for achieving a unified customer experience:
i) a single version of the data that is true
ii) the single version of the data available in real time

Deriving further the above aspects, no matter which channel is used by a retail brand for interaction with their customers, there should be a single true data regarding the products, prices, offers and so on for the customers consumption. So also, information related to the customer such as name, age, address, and purchase history amongst others must be a single version of the truth for the retailer to process.  When this data is shared in real-time and is accessible to the customer and retail business whenever, wherever, the result will be a seamless and unified customer experience.

Retailers have not only realized this but are also striving to make it a reality. However, this is still a pain point for many of them. Having the right technological capabilities by employing innovative and futureproof solutions such as ETP retail software can help retailers unify their customer experience across all channels.