Tag: Retail business

Applications of AI in Retail

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Application of AI driven process in retail will not only help retailers acquire new customers, but also boost repeat business. Increased accuracy in personalized communication to the customers along with tailored recommendations and offers will compel shoppers to strengthen their loyalty as they will begin to associate the retail brand with personalized, relevant experiences. Having realized this, retailers are looking to invest and use AI heavily in this coming year

According to a research, global spending on Artificial Intelligence (AI) in retail is expected to grow nearly fourfold over the next four years, from $2 billion in 2018 to more than $7 billion in 2022. This is expected to happen as retailers look at new avenues to boost their efforts to offer personalized customer experiences. As such, retailers will heavily invest in AI tools that will allow them to differentiate and improve the services they offer to their customers. These tools, ranging from automated marketing platforms that generate tailored and timely offers, to chat-bots or voice assistants that help to provide instant customer service, will be in the radar of retail brands.

Progress in AI and machine learning in the recent years gone by and those to come will be exponential. The combination of AI, cloud, Big Data have already begun the transformation of the retail industry and this will reach new levels in the near future. As AI leverages big data to personalize experiences, retail companies are looking at these applications to garner robust competitive advantages. As per the report, retailers’ spend will be the strongest in the customer service and sentiment analytics area to understand customers’ reactions to the products purchased and the service received, all being possible with the application of AI in analytics. This will prove to be the breakthrough for retailers looking to improve their customer experience.

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AI will also be able to help in actually predicting the purchasing behaviour as well as the needs of in-store customers. This means that sales staff can have this kind of information handy and will therefore have an idea of what a customer is looking to buy before they even ask for help. This will be a huge step in predicting the customers’ needs in advance and being able to serve them aptly thus revolutionizing customer service at the store.

AI driven insights would also be leveraged to not only design new product ranges but also to plan and create marketing and promotional campaigns and offers. Optimizing product pricing and discounting with the help of AI will prove to be beneficial to retailers. Further AI-backed demand forecasting is also increasingly becoming an essential tool for retailers. Understanding customer demand and accurately planning and managing inventory has become critical, especially during mega shopping events such as Black Friday, Cyber Monday, Singles Day and Chinese New Year. Demand forecasting with the help of AI will definitely empower retailers to be prepared for such big events in advance.

Mentioned above are some of the applications of Artificial Intelligence in the retail business and as time progresses, these applications may get further enhanced and there may be new ones that retailers may want to use and fuse into their businesses to further enhance their customer experience across channels.

What’s on retailers’ minds for 2018?

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At the NRF Big Show 2018, retail executives and leaders share the areas they are going to focus on this year. Here are a few things they are working on:

1) Retailers will continue to strive for providing more personalized digital experiences.

When asked for views, executives from Macy’s, Neiman Marcus Group and The Children’s Place clearly stated that personalization would be a big focus for them in 2018. Macy’s is continuing to focus on personalization according to an executive, “The whole concept of personalization is simply on steroids right now. It’s all about the consumer in that one moment in time. We’re doing anything we can do to connect directly with consumers and make shopping convenient for them.”

Retailers have worked on improving personalization for many years but it all boils down to customer experience. As such, providing great customer experiences in 2018 will be the result of blending technology with a more personalized touch.

2) Connecting online and offline store experiences will remain a major focus.

Leading retailers such as Macy’s and The Children’s Place are still fervent on ‘omni-channel retail’. Macy’s is continuing to see serious growth in the area of “buy online, pick up in store” (BOPIS). Macy’s executive stated that “physical stores are not going away. Customers will always want the option of coming into the store to try on jeans instead of buying three different sizes online.”

The Children’s Place is also striving towards making it big in digital and using a lot of the omni-channel use cases like BOPIS and ‘Save the Sale’. ‘Save the Sale’ needs store associates to be able to access real-time inventory across the store network. This enables the store associates to address the situation of stock-out and lost sales by helping customers to find their desired item online or at another store location with ease.

3) More retailers will look to leverage voice assistants.

Global Chief eCommerce Officer at Samsonite feels that voice assistants will start taking off in certain categories like consumables. However, categories like fashion may have a harder time to leverage voice. 1-800-Flowers.com having been one of the first retailers to launch an Alexa skill, the CEO & President believes that bots and AI capabilities will enable 1-800-Flowers.com to amplify its personalized experience. He envisions the possibilities, “With voice as the main interface emerging, I think it will bring us back to the retail experience of our first flower shop where we delivered a true 1-to-1 relationship. Voice enables us to have a 1-to-1 relationship with customers on a massive scale.”

4) As artificial intelligence (AI) matures, AI-powered retail applications are gaining adoption.

According to the Global Chief eCommerce Officer at Samsonite, 2018 will be the year that artificial intelligence will have its breakthrough moment. Retailers will start using it to power various parts of the retail and eCommerce experience. 1-800-Flowers.com uses AI to power conversational interfaces like Alexa, Google Assistant and Facebook Messenger, many of which need no human touch at all.

Using AI and its applications in various aspects of retail, retailers are looking to boost their businesses and enhance customer experiences.

5) Personalization, social media and Amazon Marketing Services will be used as acquisition marketing strategies.

The Children’s Place highlighted the importance of personalized marketing strategies. Its personalization strategy began in 2017 when the company hired a data scientist to clean up the customer database. Now that The Children’s Place can connect customer purchases online and in-store, the executive believes that it will aid in making acquisition, engagement and retention strategies more personal,.

Social media also seems to be one of the top marketing priorities for the CEO of Petco. On the flip side, Global Chief eCommerce Officer at Samsonite believes, “Amazon Marketing is going to become as critical to a brand’s marketing strategy as Google and Facebook. Today, Amazon has the return on investment potential of Google Paid Search in 2005 and display ads in 2002.”

Putting AI in Retail

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The human brain is more than just an organ – it is a complex system that helps humans to analyze information and take simplified decisions in various situations. But it cannot always gauge all the possible outcomes of a decision and hence our decision-making ability gets limited in certain circumstances. But what we cannot achieve with the powerof our brain is today being achieved by applying Artificial Intelligence (AI). It is much more than neural networks and complex algorithms; it involves enabling machines to take appropriate decisions in all possible circumstances.

With the huge amount of data being transmitted from electronic devices every day, it becomes imperative for the data-driven organizations to collect and identify a pattern in them. But, what exactly could be the advantage of collecting and analyzing data? Well, to predict the future it is necessary to understand the past and the present.

One of the biggest beneficiaries of Artificial Intelligence is physical retail. It is facing immense competition from e-Commerce portals, which not only provide user-friendly shopping experiences but also come up with relevant suggestions for future purchases. The need of the hour for physical retailers, therefore, is to revamp their business processes and come up with innovative measures to provide a more than satisfying customer experience along with an efficient stock management strategy. Artificial Intelligence (AI) can help achieve both. Here is a brief overview of how AI can help drive transformation in physical retail.

  1. Collecting relevant data: Data collection forms the backbone of AI. According to some of the industry stalwarts, “there can be no direct leap to artificial intelligence if substantial and relevant data is not being collected”. Most of the physical retailers lack the indigenous technology to collect and process large chunks of data by themselves. But that should not be considered as a hindrance to AI as there are efficient retail solutions like ETP V5 that can help them collect and process relevant and authentic data.
  2. Personalization: AI can be thought of as a complex algorithm that consists of all possible ‘if-then’ conditions. These conditions can be identified in various ways such as shopping cart analysis, payment preferences and surveys among others. The analysis performed can be used for managing product assortment, customer-specific promotions, and other loyalty programs. Personalization will ensure repeat footfall, which in turn will ensure a healthy bottom line.
  3. Supply chain and inventory management: If a retailer is able to collect relevant data, it becomes easier to maintain a healthy supply chain along with an efficient inventory management system. If the retailer wishes to sell the right product to the right customer at the right time and place, managing inventory across all channels becomes most important. This is indeed a mammoth task that can be eased out using an efficient Omni-channel Retail Solution like ETP V5 which can identify hidden patterns in the customer’s buying behavior and provide relevant suggestions to maintain the right inventory. Maintaining and managing supply chain and inventory are the backbone of a profitable retail venture.

AI has started revolutionizing the way in which physical retailers go about taking business decisions and with the enhancement of customer’s technical abilities, it can be safely claimed that AI will play an important role in the future of retail.

Is GST better than VAT?

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The Government of India recently decided to do away with multiple taxes on goods and services by implementing a single tax – the GST, the revenue generated from which is shared between the Central and the State Government. Prior to GST, there were a number of different indirect taxes, the Value Added Tax (VAT) being the most prominent amongst them. VAT could been seen on almost every invoice, which has now been replaced by CGST and SGST thus making people wonder if GST is same as VAT. But GST is completely different from VAT and it is very important to have a clear picture of the distinction between the two.

  1. GST, as the name suggests is incurred on both the goods and the services where as VAT was implemented only on the goods. To take care of the tax on services, previously the government had Service Tax. Thus, one wouldn’t have had to pay VAT while booking railway tickets; instead he/she would have paid Service Tax based on the government guidelines. The government has now combined both of the aforementioned taxes into one – GST.
  2. GST unlike VAT doesn’t have a cascading effect. Prior to GST implementation, the retailers were required to pay VAT as soon as some value is added to the product. For instance, manufacturing a product caused value addition and the VAT was incurred on the entire value. Similarly once the product is ready and is being labeled for final consumption/usage, a retailer would have again incurred VAT. This use to cause a spike in tax burden for everyone in the retail chain. GST, unlike VAT enables retailers to claim input tax credit from the government, which can further be transferred through the retail chain. This brings tax respite to the retailer and consumer as the redundancy of tax payment is done away with.
  3. VAT was calculated and implemented differently by different state governments. The central government could implement only Central Sales Tax (CST). The state governments were empowered to tweak the imposed tax rate at their will, which cannot be done with GST. The central government has introduced different tax slabs for different products and has decided to share a fixed proportion of tax revenue with state governments. The state governments have agreed to this kind of revenue sharing and as a result they don’t have the power to make rate changes. It will thus provide more freedom to retailers to set up warehouses or manufacturing units in any state they wish to.

GST will bring about a positive change in the economy by creating a friendlier and understandable indirect tax regime. It will put an end to industry woes related to taxation and promote the ease of doing business. GST is simply not restricted to VAT, it encompasses almost everything which earlier fell under the scope of indirect taxes. It lies in our responsibility to understand it better for streamlining our business activities and processes. You may click here to know more about GST.

An in-depth understanding of GST is essential not only for end-customers, but also for retail businesses both in India as well as those looking to make an entry or investment in the Indian market.

What is GST all about? (Infographic)

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GST is going to effective from 1st July 2017 in India and retail businesses in the country and those planning to enter India will need to be GST ready. Here is a quick overview of GST.

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ETP Omni-channel Retail Solution with the GST pack handles not only the billing processes with GST impact, but also various other retail processes, making them GST ready.

 

How unified commerce is unifying customer experiences

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ETP blogpost 94 - Unified Commerce

Price and product are important parameters for customers to make decisions related to their preferred brands and have long been dominating the decision making process. But now, customer experience is the biggest differentiator for retail brands standing out. So much so that it has already overtaken price and product as the most sought after parameter for the customers. Thus competition amongst retailers on the customer experience front seems to be intensifying immensely. As reported by Gartner 89% of retail businesses are expected to compete mainly on customer experience. Howbeit, adding more customer touchpoints, retailers are finding it increasingly difficult to manage a harmonious customer experience across channels.

The need for a unified and seamless customer experience is profound in this new age of shopping. The lingering fear of customer churn owing to inconsistent shopping experiences, the probabilities of lost sales and loyalty shift to competitor brands are some of the major concerns that modern day retail businesses are battling against. One dependable solution that retailers must look to for emerging champions in the customer experience arena is ‘unified commerce’.

Going by an important statistic according to a Boston Retail Partners (BPR) report, more than 70% of retailers have plans to implement a unified commerce platform before the turn of the decade. Further, a definition of unified commerce by BPR states that ‘unified commerce places the customer experience as first priority by leveraging a single commerce platform. A single platform rids of internal channels that operate in their own silos. Instead, merchants leverage a “single, centralized, real-time platform for all customer engagement points.” In this way, unified commerce is achieved’.

Following the definition above, it is clear that ‘unified commerce’ relies on two fundamental aspects that are key for achieving a unified customer experience:
i) a single version of the data that is true
ii) the single version of the data available in real time

Deriving further the above aspects, no matter which channel is used by a retail brand for interaction with their customers, there should be a single true data regarding the products, prices, offers and so on for the customers consumption. So also, information related to the customer such as name, age, address, and purchase history amongst others must be a single version of the truth for the retailer to process.  When this data is shared in real-time and is accessible to the customer and retail business whenever, wherever, the result will be a seamless and unified customer experience.

Retailers have not only realized this but are also striving to make it a reality. However, this is still a pain point for many of them. Having the right technological capabilities by employing innovative and futureproof solutions such as ETP retail software can help retailers unify their customer experience across all channels.

How to make discounting work!

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ETP Blog - How to make discounting work

The festive season is synonymous with shopping and sales. Year after year, the festive shopping season gets more demanding, basically due to two main factors – increase in the number of shoppers and rise in the competition amongst retail businesses. While more shoppers is certainly good news to the business, tough competition can be detrimental to success in the festive shopping arena.

One of the most common and probably one of the most effective techniques used by retail businesses to attract shoppers is offering festive discounts. Discount based promotions are a popular crowd puller but in the modern day retail, planning and executing discounts the right way can be a huge challenge. Retailers need to make sure that customers are finding their offers better than the others. At the same time, they also need to ensure that they are not gouging a hole in their own pockets while offering markdowns or free of charge products.

Here are some simple tips that retail businesses can use to make discounting work:

Defining objectives: This is an important step that retailers need to take while thinking about discounts. They need to clearly define the purpose of running a sale or a promotion and ensure that it is aligned with the overall business objective. The purpose could be varied, such as, looking for new customers, encouraging repeat purchases, selling off old stock and so on. Based on the purpose, retailers can decide what kind of offers they need to plan and execute, when to run the promotion campaigns offering the discounts and which products should they be offering discounts on. Further, the performance of the promotion can be tracked and measured effectively when the purpose is clear.

Segment right: Once the purpose is defined, next is to identify the target audience to whom the discounts would be offered. This includes segmenting shoppers in to different buckets so that more relevant and attractive discounts can be offered to each. Shoppers can be segmented based on their purchase history, their buying preferences, their budgets, demographics and more. Shoppers would be more eager to receive offers that are most appealing to them.

Mindful of margins: Retail business owners need to be mindful of their margins while running offers and discounts. Based on the objectives and customer segments, they need to set an acceptable margin so that they don’t end up giving away too much and running into losses.

Creatively strategize: Once retailers have their objectives defined, they know which customer segments need to be targeted and they have set their acceptable range of margin, they should then draw up strategies and define the business rules for running the promotions. While doing so, retail owners should get creative through techniques such as clever pricing, highlighting new products, offering different discounts for varied set of customers.

Execute and monitor: Next, it is time to get your promotions engine running and track its performance against set KPIs that have been predefined keeping in mind the objectives, margin, customer segments and plans. Constantly and proactively tracking and tweaking the promotion campaigns for improving performance is necessary to reap maximum benefits from discounts.

Offering discounts is a tested and proven technique for retailers to make the most of the shopping season, but it is important that it is done right.

How to manage customers that are difficult

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ETP Blog - Handling difficult customers
With the holiday season less than a month away, shoppers are already planning their purchases in terms of products, budget and time. As soon as the holiday shopping season kicks off, retailers can expect an overwhelming rush. While this could be a good time for retailers to target more sales and boost profits, there could be other aspects that could put retailers in a spot of bother.

One of the effects of the holiday shopping rush is that customers are more demanding, have less time and attention span, and are not willing to compromise. In other words, they may become very difficult to handle and retailers could have a tough time managing them.

In order to help retailers negotiate such occurrences of dealing with not-so-pleasant holiday shopping experiences, here are some simple tips that could prove to be effective:

Listen: Shoppers who are upset need to be heard. So allow your customers to speak their heart out about anything that is unpleasant to them. Active listening would allow retailers to consciously assimilate and comprehend the issues their customers are facing, rather than being judgmental towards them. Active listening will be reflected in the retailers approach towards understanding the customers and this would leave a positive impression on the customers. They will feel that they are being given a fair importance and thus instill a sense of trust in the retail business resolving their issues.

Act: Once the customers have vented out their problems to the retailers, it is now up to the retailers to act. They need to take the necessary measures to resolve the customers’ issues. Retailers need to come up with a solution that would be feasible for both, their customers and themselves. If the retail business is unable to resolve the problem upfront, they should request for an appropriate time and respond within the stipulated time.

Repeat: There will be multiple instances where retailers will come across customers that are very difficult to handle and manage. The two steps mentioned above thus need to be employed time and again by retail businesses to reduce the chances of lost sales and the number of disgruntled customers they would need to deal with.

Fore planning, resilience, the right mind-set and treating every customer as an important asset for their business could enable retailers to effectively listen to their customers and act appropriately, making them the preferred retailer that customers go to for a happy shopping experience.

Stay tuned to know the 10 tips that could add extra bling to the festive season sales and profits.

3 P’s for Effective Retailing

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ETP 3 P’s for Effective Retailing

Retail as a business, is highly complicated as there are numerous aspects and operations involved in its successful and smooth functioning. Right from stocking a product in the store to the customer checking out of the store with that product, the entire flow can be broken down into intermediate activities that need to be managed carefully for the overall business to be complete. Now, with the influence of advanced technology, the scope of retail has further expanded to incorporate a host of other concepts and functions, thus complicating the whole process. But from the olden days till date, to run a retail business effectively, no matter how complicated it is, there are 3 basic and important aspects that need to be taken care of:

People – Retail is all about people. The retailer or the business owner along with the other employees including the store staff and most importantly, the buying customer are all important for retail. Even in the case of online retailing or e-tailing, there are people working in the background for the business to run efficiently, as well as to ensure that orders are fulfilled right up to the customer’s doorstep. The need of the hour for retail businesses to survive is to become ‘customer-centric’, and customers needless to say again, are people. The importance of people cannot be stressed any further and the right people management, be it customers or employees, would definitely go a long way in making the business better.

Product – The core objective of retail is to ensure that customers can procure/avail the products/services they desire, when they need them. In simple words, retailing is where demand for a certain product is successfully fulfilled by the retail channels. As such, the ‘product’ is a necessary entity for the business to take place. Retailers need to be aware of the products that customers are looking for and have them readily available and at reasonable costs. Having the right product at the right place at the right time in the right quantity and at the right price is key for running a successful retail business.

Process – A business is set of processes that should be carried out effectively to achieve the objectives of the business. In retail, there are a host of processes that need to be undertaken and managed for the proper functioning of the business. The right systems in place along with pre-defined rules to guide each and every process, and timely monitoring to assess the performance of each function is highly essential for any retail business to not only sustain, but also to garner profit and grow.

The right people with the right products and the right processes, and effective management of the three will help business owners to get it right in retail.

New Age Retail – Business Culture And Engagement

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The retail industry is one of the main drivers of employment around the world and a major contributor to the GDP increase of most Asian countries. The retail arena has been transformed through multiple market upheavals and strategic developments – from opening economies leading to true globalization in the industry to emerging markets rising as dominant competitors. Parallel to this, technological evolution created burgeoning business domains e.g. ecommerce, mobile applications, social media communication etc. establishing changing consumer preferences and expectations.

The industry has been historically the first avenue of employment for many new workers. The changing rules of retail combined with the upsurge of young, educated workforce in Asian countries has greatly propelled business growth and foreign investment. There is a need for stabilizing business culture and engagement which encourages the workforce to pursue opportunities in retail and form a stronger industry foundation.

“Asia has the potential to drive innovation in areas such as e-commerce and in developing new products. Japan, South Korea and Taiwan are home to some of the world’s leading electronics companies. And, China and India’s consumers are some of the world’s most active users of mobile technology and social media,” says Michael Cheng, PwC’s Retail and Consumer Leader for Asia Pacific and Hong Kong/China. “While shopping via social media platforms is still a new trend, it won’t be long before consumers jump on the s-commerce bandwagon.”

To understand and harness the dynamics of new-age retail, leading retailers and industry experts from across the world will be congregating at the 5th Annual Retail Congress Asia Pacific 2015, Singapore. As Key Partner to the event, ETP will be leading discussions on Asian retail and its emerging markets.