Retail Revival or Fight For Survival? AI is Driving a New Era.

IN Future of Retail — 12 June, 2018

While there have been some big retail closures announced in the UK, consumers are still shopping from physical stores as frequently, and according to a report by Deloitte, brick-and-mortar is predicted to grow by USD 36 billion by 2022. Contrary to popular belief, the retail high street is alive and kicking.
 
 
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According to Forbes, online retail isn’t stealing sales from physical stores; at no point has eCommerce's share of retail grown substantially enough to negatively affect in-store sales. The same Deloitte report suggests that brick-and-mortar stores are, in fact, witnessing a revival, with new opportunities opening up for businesses across the sector. So, what is driving this sea change?
 

Complementary channels


Brick-and-mortar retail is seeing a revival thanks to an omnichannel shopping culture. While online is convenient for some, consumers still appreciate seeing and touching a product, even if they’ve researched online first, or vice versa. Each channel complements the other, and boosts holistic growth.

While a number of physical retailers have closed their doors in the last six months, this is more indicative of a lack of ability to adapt to multiple channels or higher consumer expectations, than the death of in-store shopping; it’s survival of the fittest retailer.

Automation


Currently, retailers maintain on average 39 separate and disjointed systems and manual processes. These include point-of-sale, pricing, stock levels email marketing, and social. While this is impractical, it also becomes impossible to be truly agile, or to achieve a single customer view.

Integration and automation, meanwhile, allows retailers to review processes and catalog the mundane, repeatable paths that can be done faster by a machine. By identifying these business pain points, retailers can establish the value of improving them. Automation can make daily accurate decisions that reduce costs, and support both top line and bottom line growth by giving the workforce more time to perform high-value jobs that generate profit.

Data


According to Deloitte’s report, “data is the currency for the next generation of retail experience initiatives.”

The most successful in-store retailers, therefore, are leveraging consumer data, as well as key circumstantial information, to create 360 degree, personalized and targeted experiences, based on the preferences of their consumers. The result? More in-store footfall and greater profit.

“My advice to retailers? Start using your data today. Don’t throw it away; there’s incredible value in data. Next, we want to go up the supply chain, to optimize the production process. Then bring purchasing and pricing policies together to give retailers fully algorithmic merchandising.”
 
Prof. Dr. Michael Feindt, Founder & Chief Scientific Officer, Blue Yonder

 

Artificial intelligence


On average, just over one-third of retailers have adopted AI technology, and most popular applications of AI in retail are in pricing and promotions, according to Deloitte. AI allows retailers to make AI-based decisions, so that all in-store items are entirely optimized for the buyer.
 
“Originally, science-based algorithms were simplistic, they weren’t enhanced by machine learning. AI uses data to really make accurate predictions, give exact recipes, and to identify what action should be taken. All aligned with the specific goals of that retailer.”

Prof. Dr. Michael Feindt, Founder & Chief Scientific Officer, Blue Yonder

 
Retailers that dedicate resources to either an in-house or third party AI specialist will discover the secret behind customers predictability and enhanced user experiences; the cornerstones to successful modern retailing.
 
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enables retailers to take a transformative approach to their core processes, automating complex decisions that deliver higher profits and customer value using artificial intelligence (AI).