We're constantly reminded that we're in the midst of a technology revolution, the likes of which the world has never seen. The pace of change and disruption is dizzying and it feels increasingly impossible to keep up with the latest innovations.
For many years in retail, the ultimate analytical goal had been to fully understand our customers‚ wants and needs so that we could deliver the products, services, and experience that would win sales and long-term loyalty. Recent advances in technology and analytics are finally allowing us to deliver on this vision‚ as long as we stay focused on the needs of the customer and make sure to leverage technology and analytics to maximize the customer experience.
New Possibilities:The Evolution of Technology
It used to be that if we wanted to understand how customers shopped the store, we had to physically watch them. Initially, we might have done this with in-store monitoring (having people physically watch shoppers), and then moved to video and then on to the most sophisticated system: GPS devices on shopping carts. This allowed us to understand how customer shopped the store and gauge the effectiveness of layout, flow/adjacency, display, shelf-sets, and even price and promotion decisions. However, this approach was very costly and disruptive, not to mention anonymous‚Äîit tracked aggregate traffic flow and carts, not individual shoppers.
The Power of Mobile Personalization
Without a shadow of a doubt, one of the most critical technologies that has and will continue to redefine retail is the proliferation of the connected consumer. As smartphone penetration among shoppers approaches 100%, we have the most powerful platform for understanding shopping behaviour before, during, and after the store visit‚ allowing us to create the optimal, personalized customer experience.
By offering a world-class app with opt-in permissions, we can engage customers along the entire path to purchase through the promise of helping them save time and money and giving them a better experience.
In Canada we have tens of millions of flyers delivered to our doorsteps every week‚ each listing hundreds of items. But the average consumer only buys 100 to 200 items each year. How many of those items happen to be listed in the local flyer?
But using a mobile app and robust predictive analytics, we can replace those mass promotions with personalized promotions that feature exactly the right categories and brands for each customer, along with personalized pricing. What's more, we can time these promotions based on each customer's shopping habits.
Once they're in the store, we can use the same app to understand how individual customers shop to personalize the in-store experience‚ all using technology that's far more cost-effective than older methods.
There are stores of the future‚ in the market that demonstrate the power of personalization by sending, for example, a notification if you forget to add an item to your cart that was on your shopping list. There are several retailers in Europe who are providing nutrition or sourcing information on their products using apps or augmented reality.
Given the seemingly unlimited possibilities, clearly it is a great time to be in retail and harness the pioneering opportunity to re-personalize‚ the shopping experience.
Of course, nothing is easy. The greatest challenge in taking advantage of these opportunities is the increasing sophistication of the analytics required. Fortunately, another great innovation is providing the answer.
Artificial Intelligence: The Next Generation
You can't turn around today without hearing or reading about artificial intelligence, machine learning or deep learning. The term was coined in the 1950s, and since IBM's Deep Blue beat chess legend Garry Kasparov during a six-game match in 1997, there have been many improvements in AI.
Driving the surge in AI is its necessity. The sheer volume of data we need to manage, the need for both structured and unstructured data, and the speed at which we need to compete clearly point to the need for artificial intelligence.
We can personalize every aspect of the grocery shopping experience to every customer in every visit, and yesterday‚ segmented or rules-based approach simply won't work. AI allows us to learn from every customer interaction one customer at a time‚ and continuously refine, enhance, update and improve the customer experience.
To paraphrase Bill Gates, we tend to overestimate the change that will happen over the next two years, but significantly underestimate the change that will happen in the next 10. We‚'re in a brave new retail world. And it promises dramatic changes over the coming decade.