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Knowledge and expertise in Retail & Distribution
Embrace change: Boost sales and efficiency with data and technology
07 Jun, 2022
A top-notch customer experience, efficient operations and smart forecasting are the core elements of a future-proof retailer. But these elements are not fixed objects. Customer expectations and circumstances evolve, supply chains shift, and forecasting will not always reach the same conclusions.
The only constant is change. Therefore, agility is required to be able to respond quickly to trends and developments. If a modern retail platform is your engine to adapt, then data and AI are your fuels, but technology will not get you there alone.
We all know the stories of Kodak, Nokia and the electronics retail chain Comet. When the competition started to do things a little differently, they forgot to change. The moral of this story is that change is the only constant of a healthy business. Usually, change happens slowly, but COVID-19 turbocharged disruption. Some retailers were changing quickly to an online store, allowing them to retain or increase their market share.
With agility that was made possible by being able deploy technology with speed, they could immediately offer a hybrid shopping experience. Like them, you want to be able to follow your customer from every channel and tap into new technologies as quickly as possible. Timing is essential, but is time on your side?
Survival of the most adaptable retailer
Do you want to step into the metaverse, support community group buying or prove the sustainability of your product with data? Or do you want to use augmented reality to introduce customers to your product or service at home and in your store? Whatever innovative step you want to take, you need to become agile and data driven. Customers are no longer loyal. Instead, they want the best service at the best price. And they want it now. Therefore, you need to adapt as quickly as possible, not with a bang, but step by step. Projects have to be iterative and short, so you can validate, test and roll out, and scale up ASAP. We are talking about weeks, not months. With the following 5 steps your retail organisation becomes future proof.
Start a growth mindset
Many retailers are shackled to legacy technology, outdated business models and a traditional mindset. Starting an innovation team and purchasing a modern e-commerce platform and AI is not enough to put you ahead. All of your employees need to feel the urge to change for the better. That means an open culture, embracing challenges, moving on when things get tough, seeing efforts as the path to mastery, learning from criticism and finding lessons and inspiration in the success of others. In other words, you will first have to change into a learning organisation with a growth mindset.
A retail platform that sets your business free
Foundational to achieving agility is a platform that gives you the freedom to innovate. You do not want a technical prison where you spend a lot of time on maintenance. Instead, you need a cloud platform specifically for retail that gives you control over your entire chain. AI-driven demand forecasting, augmented reality for consumers and front-line workers, voice commerce or a new chatbot. If the technology is there, you want to be able to experiment and scale it up.
Reinvent your business model constantly
Your customers bought your socks because they were great. They have done this for the last 30 years, but will they do the same tomorrow? It takes courage to look critically at your business model. Perhaps you are better at offering budget products, or should you invest more in customer experience? You need to check whether your proposition still suits your customers continuously. Are you afraid that Amazon will grab your market share? You must create your niche and leverage your data as soon as possible. Only then will you have a strategic competitive advantage.
Leverage data with AI
So, you need to understand what is going on and how you will adjust accordingly. That requires an understanding of your supply chain, and your inventory levels in your stores and warehouses. This is so you can distribute more efficiently and see which products are selling best and where they are selling from. At the same time, you want to extract all kinds of trends from your sales data and compare them to trends, from behaviour in your stores, and on your website to the weather and world news. You can calculate this by hand, but AI can do this much faster and better. AI is not cheap, but if you do it right it will pay you back many times over. But you must treat AI right and integrate it well throughout your organisation.
If you don’t have a certain analytical maturity throughout your organisation then your AI will fail. This is the fate of 85% of all AI projects. The learning here is that AI is not a project: AI is like a child you have to raise continuously. If you don’t, at some point the algorithm will give the wrong output and you will either no longer be able to steer, or you’ll be sent in the wrong direction. Forecasting is not looking back with an outdated algorithm. A typical AI product has a shelf life of fewer than three months. After that, it will be useless because the market has changed. Technology is not transforming, it’s people’s behaviour. Technology is only an enabler.
"Invest in your future! Sitting still has never made a retailer sell more. Change is the only way to prosper, so get inspired by other retailers and chart your path to a new version of your business model, brick and mortar store and website. Be bold and embrace change!"