If you attended NRF or have read any articles on the future of retail, you may have noticed a rising focus on AI. Why is AI seemingly part of every conversation, you might ask? From my perspective, the answer is fairly straightforward: Technology enables organizations to not only keep up with their competition but gain an edge over them if they use technology in more effective ways. AI, or generative AI more specifically, has taken the world by storm due to its vast application potential across many corporate functions.
Retailers Have To Get Creative To Meet Consumer Desire
At its core, the retail industry has remained the same over the years: Provide products and services to people how, when and where they want them. The challenge has often been in answering the question, “But what do the people want?”
Consumers are fickle creatures, and what they want today may be different than what they want tomorrow. How they get what they want may also change. And how they communicate with you about what they want or what you have to offer can be all over the place as well.
Retail organizations have to determine what they want to be to their customers. Do they want to be the low-cost option? Do they want to be the coolest and newest option? Do they want to be the reliable but not flashy option? Do they want to be the unique and quirky option?
Next, they need to determine if they want to be a reseller or if they want to be the sole provider of an offering. Do they want to offer all things to all people, or do they want to target a niche market? How do retailers want to provide services to their customers, and what should the availability of said services be? Are there services that everyone should get, and should there be a tiered model? Should services differ based on the product a consumer buys, and does a consumer have to buy a product to enjoy the services you offer?
Operating models vary greatly across the retail ecosystem and are often reliant upon the manufacturing partnerships they have, the supply chain methods utilized and the technology at their disposal. A cool use case for generative AI is to input what you offer or could offer and get recommendations on operating models and complementary service offerings.
In A Retail Transformation, How Often Matters More Than What
The digital transformation of today has enabled retailers to operate more efficiently and effectively, allowing them to grow market share and keep customers happy in a variety of new ways. But this is not always the case; a disconnect between purpose and technology can have the exact opposite effect and tank both revenues and customer satisfaction scores.
Because the retail industry is so closely tied to consumer behavior, everything you do must have the consumer at the center. Let’s say that the technology department has decided it is time to upgrade its systems. This will allow them to complete tasks faster, retain and attract better talent and support the organization more effectively. However, even if the technology change is needed, these changes could still do irreparable harm to your organization. How do we avoid this?
Often, people assume that the faster you complete a tech transition, the better it will be for your business because there will be less downtime, less cost to maintain multiple/duplicate systems, fewer customers will be confused, etc. In a retail organization, the fastest path is often not the correct one. Why? Because the fastest path often does not take the time needed to adjust for the impact the changes will have on people and their experience.
Instead, when a set of technical changes are proposed, we should stop and ask, “What will the experience be for both our employees and our customers?” When we plan for positive, omnichannel experiences, we will include listening sessions and feedback loops that will impact how and in what order technology workstreams are completed. It will include a communication plan for those affected both internally and externally. It will incorporate knowledge from front-line employees, and while this may not change what you are doing, it will often change how you do it in order to achieve the best possible outcomes.
Never Let New And Shiny Get Ahead of Your Purpose
The use of AI in retail is becoming a necessity versus a nice-to-have. This type of technology supports your consumers at the speed of light, enables robust e-commerce engagement, makes connections where humans may be unable to and provides many other benefits.
As I outlined in my previous digital transformation articles, tying technology changes to business outcomes is how you not only successfully implement new technologies but also how you get the business onboard to champion the changes and ensure adoption. Understanding how new technologies will help you meet your customers’ needs faster, make the processes easier on your employees, and drive profitable returns will decrease the number of roadblocks a technology team will face from operations and customer-facing teams.
Source: Forbes