The future of retail is one where artificial intelligence (AI) and machine learning (ML) will combine to deliver a customer experience unlike any other.

By Tony Nkuna, senior presales solutions consultant at TechSoft International

Already, the likes of 5G, the Internet of Things, and edge computing are disrupting traditional approaches. It all comes down to better understanding customers and providing a seamless experience regardless of digital or physical channels. The secret sauce that will enable this is real-time data analysis.

Take shopping as an example. The past two years have seen local retailers refocus efforts on delivering mobile apps that deliver a great customer experience. But by integrated customer data across application behaviour and in-store purchases, a retailer can significantly increase conversion rates.

Providing customers with discounts and specials relevant to their buying habits regardless of medium used can only be done when data analysis is automated to run at scale. By injecting AI and ML algorithms into this, much of the heavy lifting can be done by the machines themselves, conversion rates will improve, and market share will increase especially among tech-savvy customers.

This is the space in which predictive analytics becomes an invaluable asset in the modern retailer’s armoury. By leveraging the power of their existing data, retailers can significantly improve customer satisfaction, operations, and market share without needing to deal with any disruption.

It is all about gaining better insights about the data they already have. The predictive part comes in when retailers need to manage the supply chain and deliver the right products to customers as optimally as possible.


Making things easy

Simply put, retailers must start competing better on a service level if they are to survive. It has reached the stage where spending money at retail is more about the experience and less about the product. Take Apple as an example. Their retail stores provide customers with an experience where they can try new products, ask questions of knowledgeable sales associates, and learn new ways to use the products.

It is about making it easy for consumers to engage when and how they want whether that is from a mobile device or in-store. Apple creates fluid, omnichannel experiences by connecting all touch points of the customer while equipping store employees with technology, tools, and information to enable terrific customer experiences.


Insights done right

By using advanced analytics, retailers can identify and understand the most relevant data from customers, devices, stores, orders, inventory, shipping, and customer service to create this integrated experience.

Having access to ‘fast data’ such as current location and behavioural information gathered from a customer’s smartphone, IP addresses, and other forms of customer identification, the retail can see where a person is in their shopping process and can provide additional in-the-moment information where necessary.

For instance, geo-location data can inform a cosmetics retailer that a high-value customer has entered one of its stores or a particular aisle where certain products are located. Blending a mix of historical and real-time customer data, including the customer’s most recent purchases along with the products they are currently viewing, the customer can have a customised offer instantly sent to their smartphone based on the products and price points they are most likely to respond to.


Combining all fronts

The main advantage online retailers have over traditional ones is their use of analytics. Analytics can collect data from and about shoppers, mining it for demographics and shopping habit insights. This data creates data-rich customer profiles, which helps reach customers with personalised messages and promotional offers.

If more traditional retailers adopted the use of in-store analytics, they would have similar opportunities to learn about their customers and provide a greatly improved shopping experience. Analytics and the data gathered will help traditional stores compete with the growing domination of online-only retailers.

And although this has started to change, it is by no means a reality, especially in developing countries like South Africa with a significant digital divide that must be addressed. However, if the future potential of retail is to be realised, there must be better integration between all customer touchpoints, data analysis, and the delivery of personalised solutions catering for individual wants and needs better.