To po­si­tion them­selves for suc­cess, re­tail­ers need to pay more at­ten­tion to cus­tomer fo­cused ini­tia­tives

Progressive Grocer (India) - - Front Page - By Neeraj Ge­hani

The re­tail in­dus­try is wit­ness­ing seis­mic changes due to mul­ti­ple forces at play – com­pe­ti­tion from on­line play­ers such as Ama­zon and dis­coun­ters; cus­tomers ex­pect­ing seam­less om­nichan­nel and new in-store ex­pe­ri­ences; ad­vent of shop­ping as­sis­tants such as Alexa and Google home. Some of the key trends in the in­dus­try are:

• Time-strapped cus­tomers are seek­ing con­ve­nience in their shop­ping as well as look­ing for dif­fer­en­ti­ated and per­son­al­ized in-store ex­pe­ri­ences.

• Re­tail­ing is in­creas­ingly be­com­ing om­nichan­nel and cus­tomers want seam­less ex­pe­ri­ences across chan­nels. More and more cus­tomers are check­ing the prod­ucts in-store and or­der­ing on­line or are buy­ing in-store and ex­pect­ing de­liv­ery at home.

• Play­ers such as Ama­zon are lead­ing a par­a­digm shift in cus­tomer ex­pec­ta­tions through oneclick pur­chas­ing, of­fer­ing end­less choice with re­views from other cus­tomers to fa­cil­i­tate de­ci­sion mak­ing, and the abil­ity to re­turn the prod­ucts if they don’t like it.

Cus­tomer is still king

While ev­ery­thing changes, what re­mains con­stant is the fact that ‘cus­tomer is still king’ and the re­tail­ers

who ig­nore this fact run the risk of get­ting ex­tinct sooner or later. Re­tail­ers need to think about levers which can help them win in this com­pet­i­tive era of ra­zor thin mar­gins.

Given the scale and com­plex­ity of their op­er­a­tions, it is easy for re­tail­ers to be­come more and more fo­cused on their pro­cesses and lose focus on their most loyal and prof­itable cus­tomers who typ­i­cally ac­count for 80% of their sales. To be suc­cess­ful in fu­ture, re­tail­ers need to put the cus­tomer at the cen­tre of all their de­ci­sion mak­ing. This is eas­ier said than done, given the ex­ist­ing legacy pro­cesses, focus on day-to-day ex­e­cu­tion, and not to for­get the preva­lent mind-set and cul­ture.

Some re­tail­ers have started to re­al­ize the head­winds im­pact­ing their busi­ness and have started tak­ing steps to po­si­tion them­selves for suc­cess. For ex­am­ple, Wal­mart re­cently hired its first Chief Cus­tomer Of­fi­cer to over­see all cus­tomer fo­cused ini­tia­tives both on­line and in Wal­mart stores.

Role of data sci­ence and ma­chine learn­ing

The role of lever­ag­ing cus­tomer data is be­com­ing more and more im­por­tant and one of the key dif­fer­en­tia­tors of the “win­ning re­tail­ers” of to­mor­row will be their abil­ity to use data to guide their de­ci­sion mak­ing. To­day, re­tail­ers have a huge va­ri­ety and vol­ume of data avail­able within their ecosys­tem in the form of trans­ac­tional data, me­dia view­ing be­hav­iour, lo­ca­tion data, weather data, click-stream data on web­site and re­tailer/ third-party apps. The key is to have this data made avail­able for de­ci­sion mak­ing pro­cesses such as sup­ply chain man­age­ment, in-store as­sort­ment and op­er­a­tions, mar­ket­ing in­vest­ment op­ti­miza­tion, manag­ing pro­mo­tions, etc., in the right for­mat, at the right time, and to the right peo­ple with the nec­es­sary skill-sets.

Some of the key areas where data sci­ence and ma­chine learn­ing can help re­tail­ers in­clude: • Gen­er­at­ing real-time and ac­tion­able cus­tomer in­sights to drive per­son­al­iza­tion and en­hance cus­tomer loy­alty. • Op­ti­miz­ing in-store op­er­a­tions in­clud­ing as­sort­ment decisions, prod­uct place­ments, en­sur­ing prod­uct avail­abil­ity, and re­duc­ing check­out time. • Shift­ing mar­ket­ing in­vest­ments from mass­mar­ket­ing to per­son­al­ized one-to-one mar­ket­ing. • Map­ping cus­tomer jour­neys across off­line and on­line chan­nels and en­sur­ing seam­less om­nichan­nel ex­pe­ri­ence.

Get­ting ready for the fu­ture

The busi­ness case for lever­ag­ing data to be­come cus­tomer-first in the re­tail in­dus­try is clear. This will en­able re­tail­ers to un­lock the hid­den value of data sit­ting in their data ware-houses. Com­pa­nies such as Ama­zon have been pi­o­neers in lever­ag­ing data sci­ence and ma­chine learn­ing to grow their busi­ness. The re­tail­ers will need to raise their game by mul­ti­ple notches, to sus­tain and win in the om­nichan­nel world. To be able to ef­fec­tively lever­age the full ben­e­fits of data sci­ence and ma­chine learn­ing in the fu­ture, re­tail­ers need to adapt to the big tech­no­log­i­cal, peo­ple and cul­tural changes within their or­ga­ni­za­tions. Some of the key areas that will need focus are: • Build­ing a cul­ture of data-based de­ci­sion mak­ing and con­tin­u­ous ex­per­i­men­ta­tion rather than us­ing in­tu­itions or old ways of do­ing things.

The role of lever­ag­ing cus­tomer data is be­com­ing more and more im­por­tant and one of the key dif­fer­en­tia­tors of the “win­ning re­tail­ers” of to­mor­row will be their abil­ity to use data to guide their de­ci­sion mak­ing.

• Re­vamp­ing the un­der­ly­ing data in­fra­struc­ture to en­sure that data from all sources is com­bined on a real-time ba­sis to get a 360-de­gree view of the cus­tomer and is lever­aged ac­tively for de­ci­sion mak­ing. • Hir­ing/ Part­ner­ing to get the right skill-sets for the fu­ture. For ex­am­ple, mar­keters who are creative as well as com­fort­able with num­bers; data sci­en­tists/ an­a­lysts to build ma­chine learn­ing mod­els and gen­er­ate ac­tion­able in­sights. The change is al­ready here for the re­tail in­dus­try and the ones who are well pre­pared for the fu­ture will even­tu­ally emerge stronger.

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