Digital innovation is an imperative for the retail sector as it’s rocked by endless economic shifts from the pandemic to supply chain issues and price instability. The latter has led to a recent 0.3 percent drop as shoppers pull back spending to adjust to higher prices.
While many in the retail sector could respond positively to a changing market ecosystem during COVID-19, the changes kept coming. What we now realize is that some shocks to retail may fade, but others will have lasting impact. This requires retailers to use digital transformation to drive innovation that delivers resiliency and agility.
Just what does resiliency and agility mean for retailers when it comes to innovation? It can mean creating back-end systems that make mobile applications and ecommerce sites easier to update, manage and monitor as just one aspect.
Retailers need broader visibility and the agility to make changes across their applications. This can take the form of a modern CI/CD pipeline and microservices to stronger analytics platforms for application development and customer/product insights. These may have once been digital transformation moves, but now they must focus on opening innovation possibilities for the business without the need to retool the technology.
Innovation requires an ability to proactively identify root problems affecting consumer experiences and new market, product, services, and sales opportunities. By focusing on digital transformation to make innovation possibilities a reality, retailers can:
- Be more strategic in marketing, merchandising and the supply chain
- Prioritize responses to challenges and needs based on the greatest need and highest return
- Deploy resources more efficiently with greater ROI
- Bring greater efficiency to the workforce
- Improve omni-channel customer experiences
Application Development, Ecommerce, and Innovation
Today’s consumers want to use mobile applications to buy and sell goods. They expect a hybrid meld of in-store and online experiences, so ecommerce sites must be far more responsive to real time changes to reflect and bolster in-store experiences and inventory/supply chain needs.
This can mean application development that works in tandem with Magento2 migration to respond proactively to customer needs as they change. Mobile commerce is all about highly connected financial and retail transactions through a mobile device to enable:
- Integrated inventory, in-store and ecommerce data Improved customer experience
- More payment options
- Personalized engagement
Agile backend and frontend systems like integrated ecommerce and customer responsive app development spur innovation possibilities that make the business more resilient and profitable. Another example is looking at AI through the lens of an innovation starter.
Using AI to Innovate in Retail
Too many AI projects in retail get stuck in proof-of-concept mode because they focus on trying to solve a big problem. The goal should be to solve a set of problems and emerging problems one at a time while taking advantage of opportunities as they become apparent.
Retail supply chains have become incredibly siloed and mired in ongoing miscommunication. AI can be the means to breaking down those data and communication silos. The ability to understand what is happening with shoppers and stock on the shelves, inventory stores, and the supply chain can have a profound impact on maximizing sales and avoiding over or under-supply risks.
The ability to manage that data by having historic contextual data with current market insights enables retailers to use AI to balance across:
- BOPIS (buy online, pick up in-store)
The analytical power to adjust to geographic, supply chain, or cost fluctuations in real time enables retailers across all sectors to be more resilient in ways that foster insights that drive customer loyalty and sales. This is as true for retailers in food and beverage to clothing. In retail, it can mean using AI to deliver:
- Smart purchasing recommendations via AI fashion assistants that can be in kiosks or part of a mobile application
- Chatbots that use natural language processing (NLP) to answer customer questions and respond with personalized answers via smartphone
- Inventory management for inventory monitoring to ensure the right stock gets to the right store at the right time by tracking sales, refunds, and orders to improve efficiency and productivity.
It’s predicted that the worldwide AI in the retail industry will grow from around $5 billion in 2021 to over $31 billion in 2028, according to Fortune Business Insights. AI in retail covers a wide variety of uses, technologies, and approaches, including:
- Emotional AI to monitor consumer sentiments on a brand or product
- Product catalog enrichment to make your product more searchable at scale, with no manual tagging
- AI-driven applications that incorporate augmented reality (AR) and virtual reality (VR) to enable consumers to try on clothes or see furniture in their home environment to go beyond in-store experiences
- Using AI-powered pricing software to evaluate market trends and demands to set industry-informed prices for ecommerce stores
- Integrate weather, time, competition, trends, and more aspects that affect customer demand for adaptive pricing
AI and ML can be broad innovation tools if implemented correctly. That means focusing on challenges and opportunities that can change. For example, Computer Vision in retail can change the landscape for QSRs and hybrids like convenience stores that serve hot foods and cold beverages. Companies like WaWa have used computer vision to transform how they meet growing customer demand for hot fresh products without increasing clerk intervention.
This type of innovation in retail can have nearly limitless possibilities when retailers implement IT infrastructure, cloud, and application development pipelines designed for agility in a changing world. Robotics in retail is another area where an innovation mindset can enable agility to solve challenges and take advantage of opportunities today and tomorrow.
Robotics in Retail
Retailers with fulfillment centers realize that innovation via robotics can benefit them even though they are a fraction the size of Amazon. However, retailers realize that this type of innovation extends far beyond just the warehouse or supply chain.
Embedding Artificial Intelligence (AI) in robots will allow retailers to transform their customer interactions, such as sensor-based robots that use IoT platforms to deliver goods to customers or answering complex customer questions with access to ecommerce, and inventory across locations.
Retail environments can produce a great deal of actionable data with IoT adoption, such as shelf and merchandise 3D sensors that perform double duty. They can first enable the retailer to gather product stocking and customer traffic information, which drives analysis that delivers improved customer:
- Connections to enhance experiences and upsell
- Follow-up processes to build brand loyalty and provide additional after-sale product insights
- Issue correction such as product and inventory questions about out-of-stock items
Digital innovation in retail is increasingly relying on cloud, AI, app development, robotics, and IoT to improve customer experiences and the bottom line. Having a co-creation partner like Techolution can help retailers make digital transformation decisions that spur innovation today and tomorrow. Contact us if you are interested in innovating your retail business and achieving your business outcomes.