The Coming AI Revolution with Kshira Saagar, Director of Data Science & Analytics, Global Fashion Group & The Iconic
It has been awhile, a long while in fact with most of us being trapped like caged birds, unable to fly with various restrictions in place. On the commercial side of things, the spread of COVID-19 has altered the business landscape and operating models for most companies as they too have had their doors shut.
If you have been following our blog for some time, you would realize some trends we have been seeing often; consumers working remotely from home, purchasing of goods and services online, automation of processes etc. Therefore, it has become pertinent for businesses- both small and big to embrace digitization.
The adoption Artificial Intelligence (AI) has well underway before the pandemic outbreak; being developed continuously and integrated into strategies as companies shift their focus to recovery. As always, in times of adversity, the boldest will turn challenges into opportunities to optimize their market positions.
This week, I managed to catch Kshira Saagar, Director of Data Science & Analytics, Global Fashion Group & The Iconic to find out more about how AI is going to revolutionize the retail space in future.
While there are a whole heap of novel things AI can do to integrate online and offline experiences in retail, what are 3 examples that give us a good flavour of the possibilities in retail?
1. Marketing
“Firstly, we can unify the customer journey using smart algorithms. One can not only track and stitch together what a user does across multiple devices in multiple sessions on the online version of the site. But also when done at scale, aided by widely available offline marketing exposure data like radio ad times, TV, GRPs etc. using probabilistic techniques, the same user’s journey is extended to the offline world. In essence, a user can be tracked not only across devices, but also if they watch an ad on TV, or hear a radio ad or watch a digital billboard on their way to work at the bus stop. A few companies are already doing this.”
With the media landscape evolving at such fast pace, marketers are looking for new ways, assisted with AI to capture their target audience. Offline measurement has allowed businesses to add on another dynamic channel to the digital customer journey – purely thought to be online. These offline measurement and attributions hence, establish appropriate operational goals through its own individual channel.
It is no longer ‘offline vs online’ it terms of which is better but merging both channels and experiences, allocating resources accordingly to drive conversions. If you want to stay ahead of the game and capture customers at various touchpoints, make sure to supplement the online marketing efforts with offline marketing as well to enhance brand loyalty all around.
2. Inventory
““Secondly, optimising assortment holdings. A lot of omnichannel retailers aim to have dedicated assortment and inventory holdings for online and offline versions of the business, to minimise the risk of unfulfilled orders on either end. The other extreme is an overabundance of commonly shared stock, due to overestimated caution. Both these scenarios serve to maximise wastage and lend to lower margins, due to eventual markdowns. Using demand forecasting techniques, coupled with hierarchical Bayesian models that can predict real world demands more accurately at a store and region level, inventory holdings can be optimised much more to a more reasonable level.”
With the amount of data available to retailers, powering AI solutions in retail has become a strategic pivot for businesses. These AI solutions are applicable to the entire retail cycle- from the manufacturing to the post sales stage. One of the key AI intelligence is in terms of demand forecasting, is that it helps make proactive calculated changes to a retailer’s marketing, and merchandising plans to even avoid stockouts in some cases.
AI intelligence impacts supply chain planning and promotional pricing by helping retailers understand how various products affect overall assortments. This is based on past sales, local trends or online behavior/patterns and interaction of customers. Such forecasting techniques will be able to identify sales opportunities and maximise profits with real time inputs on inventory levels and competition.
3. Operations
“Thirdly, is by resolving customer issues faster. Omnichannel retailers have the benefits of asking their offline customers to rather buy it and get it delivered online, or their online customers to drop off returns at their local stores for refunds/exchanges. Instead of a blanket approach to this, stores and their online channels could come up with a more customised “pick-up/drop-off point” per customer-order combination, based on the product, the customer themselves and the staff availability. A more optimised “recommendation” can be made to the customer at the point of action to alleviate overcrowding of checkouts, or wasteful dollars spent on postage.”
In order to make your customers happy and coming back, businesses need to dazzle and delight them. This too comes in the form of operations, where customers are not just waiting for you to help give a solution. It’s about providing options for them to help themselves- giving them a level of control.
With new and innovative AI technology, it helps streamline business operations improving productivity and efficiency. To remain ahead, retailers will have to bring in automation in their businesses to reduce operation costs, repetitive processes, errors while still producing a high level of output and revenue. In addition, it also helps the business fulfil its regular tasks at the fastest pace.
We have seen AI taking the retail industry by storm, but what some new technologies can retailers adopt?
“What retail needs is not just “pure new technologies” but existing unique approaches and practices from the online and offline worlds to be introduced into each other.
The online retail stores could do with having more humane and humanised approaches to a shopping journey, inspired from the offline world. Some examples are dynamic situation-based pricing similar to what a considerate shopkeeper would do; context-based searching and finding of products unlike the cold and dead text box filters online; or more interestingly visual similarity or taste/style based recommendation of products, similar to an artistic or empathetic shop assistant.
The offline retail stores could do with simple online-inspired technologies via personalisation of a shopping journey for a customer based on their past purchases and preferences, as soon as they walk into the store or when they check out. More so, with the lifting and shifting of online novelties to an offline experience. This intermingling of relatively new technologies across the domains will make the overall shopping experience much more rewarding for an end user.”
I could not agree more. Sitting at the consumer end, I’m always looking at a refreshing shopping experience be it offline or online. Social media has paved ways to extend communications beyond buying; it has created a community of like-minded individuals making the brand presence stronger in our lives. AI in this instance will be able to collect data in terms of user preferences and enhance the personalization and recommendations we receive.
In terms of offline shopping, when customers are in need of a quick and fuss free experience in a physical shop, AI would be able to introduce time-save opportunities to the customers. The store itself might get creative in terms of gamification with customers seeking interactivity with the brands. AI will then help retailers consider where to focus their efforts and investment in terms of traditional buying.
With all that is said about AI changing the way consumers shop, what do you think will become of the unmanned stores in future?
“Firstly, unmanned checkouts, unmanned stocking and restocking of products, unmanned operation of the stores - and all the other unmanned operational activities will serve to unburden the human beings to spend time on much smarter and more intellectually rewarding experiences when it comes to retail. Humans can now spend this time in other activities like deciding on the assortment of the stores, helping customers find things and make a customer’s shopping experience more about the product and less about the process. Finally, it helps remove all forms of human-driven error and anxiety of human misunderstanding.
Also, smaller completely unmanned versions of these retail stores can also lend themselves to become more nimble and mobile. For example, allowing self-driven unmanned stores to visit a person’s house or locality on demand at any time of the day and once the shopping is done, move to a new customer or a pre-ordained store parking area - not very dissimilar to the on-demand car services. There are already model concepts of such stores, and these will massively enable regional and suburban people to have much better access to the same produce and assortment”
The landscape of shopping is evolving constantly, but as always, retailers need to adapt and listen carefully to their customers and fulfil their needs and cater to their wants. It is clear that AI and humans have a co-dependence, and post COVID we need to be sensitive to the changes. The adjustments needed in a volatile situation still would still require a human touch.
Businesses will still need to keep a tab on things and make just decisions based on the collected data. With everything being so connected, we’ll need to find the silver lining where AI will show us the optimal way of life but we’ll need the humans to keep a watchful eye. People will still be vital to any business, but “nurturing” them by harnessing technology and dispelling them from uninteresting or meaningless tasks will be key. End of the day it is about delivering an amazing experience for everyone involved, don’t you agree?
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