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Why Aussie Retailers Need To Care More About AI If They Plan On Surviving

© by MartechAU

When we think about the industries that have most been disrupted in recent years, the mind tends to think of three main sectors: Finance, manufacturing, and transport. With a growing trend in ‘robo-advisors’ and the technology touted by self-driving cars; it is staggering to watch the fast pace of artificial intelligence development. GE’s Brilliant manufacturing software created a huge shift in the entire manufacturing process for a range of manufacturers. Stockbrokers and accountants are now being largely replaced by machines that not only crunch numbers effectively but make major decisions with minimal management fees. While Tesla or Uber may pop into our minds almost immediately when thinking about AI and transport, we are also seeing the impact happening in more subtle ways around road safety and public transport; with AI-driven algorithms shifting emergency response systems.

One area that AI has impacted significantly has been customer service, which has seen online retailers adopt personalised and automated customer service tools. These tools allow online stores to provide their customers with a basic yet immediate customer support and fast-track an online purchase; providing a seamless customer journey.

Yet, bricks and mortars retailers have interestingly felt left out of the equation, with many believing that any semblance of digital innovation is confined to the e-commerce arm within their company. While there is no doubt we will continue to see big changes in the coming years for e-commerce and AI, the reality is physical retailers in Australia are largely not adopting the same technology quickly enough, or effectively enough.

Much like websites that use data to predict a customer’s next purchase, self-learning algorithms over time can mimic their online effectiveness into the offline world. Examples of this could be smart fitting rooms that will directly impact a customer’s shopping experience in-store. Virtual mirrors, for example, are able to provide style advice and customer service that may not entirely replace a sales member but will at the very least outperform them. While customer service automation is crucial, so is the data these tools collect to equip retailers for their next move and at the end of the day, it is AI that is powering the retail customer experience.

While the ease of online shopping has permanently shifted the retail landscape, retailers can only survive if they have a customer-centric approach that is underpinned by data and AI. A detailed understanding of both the beliefs and behaviors of customers allows retailers to integrate personalised campaigns and increase shopper engagement. Effective use of AI has demonstrated that data does not need to sit within an e-commerce silo that is largely ignored by offline retailers. The two components must integrate and work together to impact not only market share, but ensure create an improved consumer experience.

The strengths in this approach also offer valuable insights to retailers dealing with large volumes of product, who must respond to competitive pricing in real time. Having these tools provide a scope for more accurate predictions that facilitate the ability to automatically adjust pricing, product range, and promotional activities. Using the data available equips retailers to determine the probability of response by customers, and as a result, supply and demand become a more nuanced pricing strategy. In fact, the combination of online and offline is actually an enhanced view of the competitors and the customer that e-commerce retailers are simply not going to be privy to.

It is crucial that Australian retailers look towards what the future of offline shopping realistically looks like, and fast tracks any plans to innovate within their space. Given the rapid changes that a data-driven customer-centric retail strategy requires, one would hope retailers adopt quickly the tools that will increase the likelihood of success especially in the age of Amazon.