2020 was a year that appears to have redefined retailing, perhaps forever. A survey by Blue Yonder found that 57% of consumers are doing more shopping online as opposed to in-store because of Covid, while nearly half of consumers are spending less.
But that’s not the only change to have occurred. In a consumer sentiment survey conducted in April and May 2020, Boston Consulting Group (BCG) Centre for Customer Insight showed that while established retail channels continue to retain the largest share of customer purchases post-lockdown, informal retail channels are picking up business, especially for food purchases.
“In the past, consumer value expectations were centred on three variables: cost, choice and convenience. Today, customers are looking to have more control of their purchase journey and more personalised shopping experiences,” says Amr Kamel, enterprise director at Microsoft South Africa.
Trends already well established before the pandemic – such as in-store automation and digitalisation of services – appear to have accelerated in the last year.
“This trend will continue into 2021,” says Kamel.
“Everyday activities, once normal, have taken on a new element of risk, and consumers are prioritising those retailers who are capable of rapidly adjusting to changes in the business environment.”
Retailers are moving to a multi-channel environment offering a variety of shopping options for customers, from click-and-mortar business models (both online and physical stores presences) to curb-side pick-up options and self-service kiosks. All of this is happening as a result of social distancing rules.
The future of retailing in a Covid world will have to embrace this kind of contactless transaction. The speed with which retailers have had to adapt to new ways of interacting with customers is staggering.
For retailers to succeed, they have to rethink the way all of their channels work together and this means gaining a better understanding of customer habits and expectations.
And this is where artificial intelligence (AI) will play a crucial role.
How AI is changing the world of retailing
“With AI, retailers will be able to transform data into meaningful insights that will inform the shopper journey. It will also help retailers to optimise operations by building better products and services,” says Kamel. “Retailer imperatives will include finding ways to captivate consumers in a personalised, relevant and unique way across all touch points, and with AI they can get a better understanding of their customers and build differentiated products and experiences that will keep them coming back. AI will also be critical in building flexible logistics networks to quickly respond to shifting consumer behaviour and in assisting business owners in achieving greater operational efficiencies.
Consumer experiences will be underpinned by things like adaptive homepages that evolve to create personalised displays built on a far better understanding of past spending patterns and, based on this and AI, predict what the customer is most likely to buy next.
In retailing terms, knowing what your customer is likely to want to buy this afternoon, tomorrow or next week, is pure gold.
Deep learning algorithms will collect and interpret customer feedback, resulting in more responsive research and development.
AI is already built into familiar Microsoft products
Microsoft products like Microsoft 365, Cortana and Bing are already infused with AI, but that’s a journey that will continue evolving along the path of greater productivity and ease of use.
Says Kamel: “We believe that AI will augment human capabilities by automating routine tasks and providing a clearer understanding of how the world works, so that people can focus on work that is more creative, more strategic and more meaningful – for themselves and their organisations.
“We are focusing our efforts on building AI into as many of our products as we can, in such a way that people will just use it, rather than thinking about the AI. We think of it as ‘everyday AI’.”
Examples of AI infused into Microsoft products include making Windows more secure through AI systems that detect malware and automatically protect computers against it, adds Kamel.
“We are making PowerPoint more inclusive by enabling auto-captioning and translation into over 60 languages. We are improving our customers’ insights and helping them formulate better courses of action on the information gathered through AI-powered business solutions like Dynamics 365. In Stream, we have created the ability to do automatic speech-to-text transcription of a video or Teams meeting.”
Using data-led intelligence to help retailers
Kamel says data-led intelligence is reshaping retailing in four ways:
- It allows for remote sales and services, as successful retailers need to provide customers with multiple options for everything from payment to fulfilment to accommodating different levels of comfort.
- Enabling teams anywhere: Retailers should be performing an audit of their current omni-channel capabilities and find ways to enable employees to provide consistent levels of customer support – irrespective of location.
- More robust supply chains offering realtime inventory visibility to build a foundation for both business and consumer confidence.
- Breaking down operational silos through shared access to data and analytics.
AI is the backbone of this transformation
“AI is the backbone of digital transformation,” says Kamel. “AI-powered retail experiences will become essential for retailers to meet their customers’ needs, no matter when, where and how they choose to shop. It is becoming a more sophisticated tool to power differentiated services, curate produce and facilitate a more present, human connection between retailers and their customers.”
Brought to you by Microsoft South Africa.