TECHNOLOGY | OPERATIONS
WILL DISRUPTION SAVE RETAIL? Disruptors disrupt by solving a pain in the customer journey and usually technology is at the heart of this, but what does this mean for retail in the years ahead?
badges; hand-held devices and robots, will dramatically improve in-store operational efficiency. Connecting these devices provides data insights into operations and customer behaviour that can enable predictive analytics and AI to be used to do things - such as proactively deploying staff or adjusting offers and pricing in line with demand. This can assist sale assistants in providing a high level of service to customers. ARTIFICIAL INTELLIGENCE Predictive analytics has been in use in retail, in the form of sales forecasting and replenishment planning, for many years, but we are on the cusp of something quite amazing. Systems that forecast demand and then recommend replenishments have always needed a degree of human interaction to resolve exceptions - and the batch nature of calculations has created limitations. The ability to run calculations much faster thanks to elastic cloud computing affords the ability to re-run calculations much more frequently and subsequently have the system recalculate and learn – the essence of AI. This creates a foundation towards autonomous operations frommaking recommendations as to how to deploy staff in store or re-deploying inventory in the supply chain – requesting human involvement only when necessary. What all these disruptive ideas have in common is that they require the ability to connect multiple systems – existing and new. Retail has a great deal of data already – much of it untapped because it sits in silos. Only by linking across these data sources can you unlock the data and begin to understand what you truly have. To innovate and disrupt, you must first integrate. Disruption can save retail, but it won’t be retail as we know it. Software AG helps retailers digitally transform their businesses. With Software AG’s Digital Business Platform, retailers can connect systems, people, and things in real-time to streamline, automate, and provide intelligent visibility. Leveraging vendor agnostic integration technology, data silos can be eliminated to efficiently enable the omni-channel customer journeys demanded by today’s demanding consumer. Industry leading API Management, IoT, and AI technology enables retailers to leverage the power of sophisticated retail ecosystems and facilitate new business models. For more information, visit SoftwareAG.com/Retail
BY OLIVER GUY [SOFTWARE AG]
f you step back and look at howmuch the retail industry has changed over the past 20 years or so, it boggles the mind. Corner grocers, once the only way for many to get their staples, have evolved into global grocery franchises. The dress shop downtown has morphed into online shopping and home delivery. Department stores moved from downtown to shopping centres and now are being replaced by megalithic online shopping websites, like Amazon. This is the beginning of a new era of retail, and old-fashioned business models no longer work. High street retailers, shopping centres, and grocery chains are all being replaced by more agile, digital-savvy disruptors. The phrase ‘disrupt yourself or be disrupted by others’ has never been more relevant. Disruptors are winning because they solve a pain point in the customer experience. The example everyone uses is Uber –the pain they solved was being able to get a taxi where you needed it, without having to have enough cash to cover the fare. Ten years ago omni-channel was a disruptor in retail – it solved the pain point of actually needing to go out and get the products you
needed. But now, omni-channel is ‘table stakes’ - you need it even to start competing. There are many new forms of disruption appearing. First is subscription retail, where customer pays a certain amount each month for a product or products or has product curated for them. Examples include Birchbox Cosmetics, Bellabox, and Lust Have It. As we move forward, other forms of disruption are bound to appear. These include: IOT-DRIVEN DISRUPTION Coffee machines, dishwashers, washing machines automatically re-order coffee or detergent based on usage – so that the consumer doesn’t need to think about it. This is an example of IoT ordering; some predictions suggest that, within ten years, devices ordering product and requesting customer service will outnumber human orders. REAL-TIME IN-STORE IOT Releasing in-store devices from their data silos including, point of sale, traffic counters, security cameras, and inventory management, and combining themwith new devices like electronic shelf-edge labels; smart employee
AUGUST 2019 | RETAILER 65
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