It’s that time of year again!
Retailers around the world are preparing for the NRF Retail Big Show 2020, and once again Manthan speaks to several retail influencers to find out what they are excited about seeing.
This year, Manthan will be talking about Algorithmic Customer Experience at Booth #5747 .
But you’ll love to know that our friends and retail experts are looking forward to everything from sustainability to the snacks being served in the press room!
MANTHAN ASKED: “What big retail idea do you hope to see at NRF RETAIL’S BIG SHOW 2020?”
“Here we are at 2020, that enchanted perfect vision year that many prognosticated would deliver the future of retail. At the NRF Big Show, expect to see a focus on artificial intelligence (AI) and enablement of exceptional shopping experiences.
I want to see more retailer brands at the core of innovation demonstrations. Greater focus on technology-enabled consumers/store associates as brand ambassadors. Continued innovation around my current three focus areas: AI applied to video, GPS inside stores, and facial recognition.
At the crossroads of new technology platforms and next-generation consumers, continuously expanding ‘retail renaissance’ shopping opportunities will emerge.”
“Digital transformation and the store of the future are impossible without advanced data networks. Fortunately, broadband is evolving and the rollout of game-changing 5G will support next-generation retail services and in-store innovations.
Look for 5G, SD-WAN, 4G LTE and Gigabyte Class LTE networks to be prominently featured at NRF20.”
“I’m looking forward to a fully functioning Jacob Havits Convention Center but as that won’t be the case, I’ll settle for a healthy dose of retail excitement, topped off with a rather fine accompaniment of retail relevance, pizzazz, and downright awesome retail inspiration.”
“I believe at NRF 2020, attendees will see a stronger focus on how sustainable actions are influencing every touchpoint of retail operations. From logistics to inventory management to packaging to customer marketing and more, I believe social good and sustainability, in general, will be a core conversation at NRF 2020.
Additionally, I think that retailers can expect to see more ways in which technology can bring clarity to their operational efforts, connectivity to their customer goals and conversion to their sales.”
“Have retailers finally returned to the need to train their employees to create a branded shopping experience or are they still chasing ways to give more discounts and coupons?”
“For 2020, I am looking forward to seeing where personalization can go. We are still just scratching the surface with knowing consumers on an individual level, especially as they interact and shop across channels.
I expect to see more robust opportunities not only for data capture but for analysis and more advance outputs.”
“The gap between traditional retail stores & consumer behavior has never been so enormous. Consumers are shifting behavior to invest time & money in more meaningful experiences, so I expect NRF20 to showcase technologies, design and other tools that enable retailers to respond to consumers’ shift from procurement to engagement.”
“Two years ago voice was the big thing and last year it was visual analytics taking the limelight so I wonder which of these two will come to the fore in 2020 – or maybe it will be something else.
I hope we will see a little less of artificial intelligence as a lot of the 2019 solutions were rather artificial in an intelligence sense. And I also look forward to the diverse, and plain odd, range of US snack products available in the press room.”
“Two things in service of each other: further evidence of the growth of shopping as experience, more reasons to visit; and I’d like to see more momentum behind the race to find much better analytics to identify what experience really means to customers, contextual to their shopping missions.”
From futuristic technology to the latest visionary business cases, NRF 2020 brings together a platform for the industry to showcase what could be. To get a sneak peek of how you could offer your customers an enhanced retail experience through algorithmic programming, visit www.manthan.com/nrf
We hope to see you there!
Restaurant owners are sitting on a ton of data – from employee information to mobile apps, supply chain logistics to touchscreen kiosks, e-commerce numbers to social media reviews. BCG reports that four out of five restaurant brands can access a wealth of data from multiple sources, however, only one in five is using that data comprehensively.
If you’re in the restaurant business, you’ve probably already heard a lot about how restaurant analytics can help bring in more customers. But are you aware of the operational, and predictive ways in which analytics can impact other areas of your business?
RANDY: For me, it’s all about the connected shopper. I’m interested to see what tangible progress companies are making in terms of creating a truly connected, personalized retail customer experience without and within the store.
What advancements are being made to help retailers 1) truly understand their customers holistically and 2) leverage that understanding to relevantly and personally engage with each of them throughout the shopper journey, online and instore?
RANDY: I go back to the connected shopper. The intelligent store furthers the connected experience bridging the shopper journey and digital engagement from outside to inside the store.
For example, I receive a welcome message via push notification when I walk in the store that alerts me to personalized marketing deals available for that visit. These offers are automatically added to my digital shopping list and highlighted on my digital aisle map in my mobile app so I can easily locate them. When I check out, my account is recognized as being a top customer, which automatically notifies the front end or store manager on her app, who casually stops by to personally thank me for shopping and make sure I found everything I was looking for that day.
The connected shopper experience leverages integrated retailer systems, customer data, the utility of the mobile app, location services and omni-channel engagement—essentially leveraging high-tech for high touch inside the store. That’s the future and it’s here now.
RANDY: 1. Infrastructure 2. Infrastructure 3. Infrastructure. Focus on creating the right infrastructure, integration, and processes needed to create highly personalized, relevant connections with your customers online and in-store. Too many retailers are reaching first for the bright shiny objects, without fully understanding the infrastructure needed, or the vision and planning required to deliver the kind of connected customer experience that shoppers are going to demand. Retailers end up with disparate systems and cobbled together processes that don’t integrate, communicate or scale.
Walk around NRF… incredible applications, technology, and solutions everywhere screaming their features. As a retailer, you have to step back, define your vision, create a plan and focus on creating the right data, digital infrastructure and enabling technologies necessary to serve you and your customer’s long term. Digital investment is not a marketing line item—it is as important of an investment as those routinely made for software and hardware in other areas of your business. Change the mindset.
Retailers are challenged to create connected customer experiences that leverage all channels.”
RANDY: Retailers are challenged to create connected customer experiences that leverage all channels, and more importantly each shopper’s “channel of choice.” Retailers are also challenged by data integrity and a singular understanding of a customer — “one version of the truth”. Customer account data and integrity is a fundamental and critical component to successful omnichannel engagement.
On the back-side retailers struggle with understanding performance attribution. What/why/how do customers respond to offers, engage with the retailer online and in-store—what device, which campaign, promotion and offer, and taking it further, what was the associated ROI, or incremental gain at a customer level. These are mission critical aspects of being an effective omnichannel marketer, yet the majority of retailers don’t have a clear or complete picture of their efforts or results.
RANDY: Big Data and machine learning have disruptive potential in retail marketing. Take for example the process that every grocer does of creating the weekly flyer. The majority of supermarket chains today probably still build their ad based on spreadsheets and historical patterns, just like they have for the past 30 years. It is an incredibly labor-intensive process, probably occupying 30-40% of the merchandising and advertising teams’ time each week. Big Data and AI could transform this process to streamline the workflow, as well as recommend the items that should go into the flyer based on localized customer data, historical purchase behavior, seasonality, trending, inventory levels, even weather-related data. There’s no reason why using AI a retailer could not automatically build the weekly flyer without any manual intervention.
You can also take this “intelligent” flyer concept further online, by taking all the advertised items for that week and presenting them to each shopper in a personally curated form. A truly personalized marketing solutions for every customer, every week.
We are doing this today and seeing significant gains in terms of engagement, incremental activity, and ROI. You roll it all up and the total efficiency and effectiveness gain potential are huge, and that’s just one marketing vehicle.
“If any industry is poised to reap the benefits of AI for marketing, it has got to be grocery.”
RANDY: AI and Big Data are beginning to transform retail marketing. Of all the retail verticals, grocery has typically been a laggard from a data sophistication and technology standpoint. The irony is that supermarkets typically have the most data and transactional volume, pioneered the capture of individual data via loyalty programs, and yet they lag other industries in their ability to leverage all this customer information for the betterment of their business.
If any industry is poised to reap the benefits of AI for marketing, it has got to be grocery. There is so much upside. The one example above with the weekly flyer could be connected to the inventory system for automatic ordering/replenishment.
In fact, we are seeing AI being used by forward thinking companies like Manthan to manage inventory, minimize shrink, optimize assortment and promotional performance. Disruption is coming to grocery and it will be led by big data and AI.
KIRK: The biggest surprise that I have experienced is how incredibly rapidly the world has woken up to and adopted the power of data and the power of algorithms. I worked in this field for many years and it was hard to get anyone to take it seriously 10-15 years ago. But in the past 5 years, the field has exploded, including startups, new businesses, new lines of business in old organizations, data science advocates in all types of organizations, the number of use cases across all sectors, and the demand for data scientists and data scientist training programs.
The growth of interest, applications, tools, startups, and people working in this field almost seems to be *faster* than exponential.
KIRK: A very large financial services company (we’ll call it ABC) was concerned about customer attrition. Whenever a customer took their investments to another business, ABC lost money. So, ABC decided to explore their customer engagement data to see if they could find a precursor signal in the data that indicated when a customer was perhaps likely to take their investments out and move their funds to another business.
ABC invested approximately one million dollars in a “proof of concept” project to search the data and build a model of customer attrition. They did find a signal in the data, which was simply the sudden increase in the frequency of customer logins to their online account in the month prior to withdrawing their investments. So, ABC deployed a friendly customer engagement program in which they reached out to those customers whose monthly login frequency suddenly increased — ABC sent information about a new online investment calculator, investment performance metrics, new investment strategies, updated FAQs, financial management advice, tools to simplify reinvesting in their other financial service products, etc. At the end of the 3-month “proof of concept” test period, ABC estimated that their one million dollar data science investment had saved the company one billion dollars in customer value!
That was an ROI of $1000 for every $1 investment in their program. So, the company decided to invest in a much larger permanent data science team for greater customer engagement and marketing insights.
“The growth of interest, applications, tools, startups, and people working in this field almost seems to be *faster* than exponential.”
KIRK: I believe that the worst of the “big data” hype is now behind us. A lot of growth in the data science and big data analytics fields has already taken place in the past few years, despite all of the negative hype. Now, with the hype being diminished, we are settling down to greater growth, investment, innovation, and value creation in the field. So, the perceptions are definitely changed for the good!
KIRK: I cannot discuss client-specific problems and solutions, but one case that we are developing for a future potential client is around a fairly well known and common problem in the field of talent analytics: using data and modeling techniques to predict employee performance, job satisfaction, and possible attrition.
We considered an ensemble of different predictive modeling techniques that gave greater insights into the problem than a single model approach, with most of our focus is on the employee attrition problem (which is much like the customer attrition problem mentioned above): what are the key signals in the data that might indicate when such an outcome is likely to occur?
“I believe that the worst of the “big data” hype is now behind us.”
KIRK: There are 3 essential contributors to big data analytics solutions and data science success, and why big data science is so popular these days, are these:
As computing capabilities increase, then similarly will our abilities increase to explore even greater dimensions and combinations of dimensions of much larger data sets.
The insights to be gained will continue to grow in proportion to the computing power that we can apply to the problem. The combinatorial explosion of different combinations of diverse data sets to be explored will become even more enormous as the Internet of Things grows in diversity and ubiquity. The discovery potential from all of these new acquired data will be lost unless we also acquire greater computing capabilities.
So, I expect that the 3 essential contributors to big data science success will continue for a long time to come!
VIN & RONO: Future stores would become experience centers rather than just market places, a destination providing multiple services to customers, like dining, dry cleaning, and shipping. A one-stop shop for all needs.
The store sizes are likely to shrink as they look to bring in granular clustering based on the demography of the location. E.g., currently grocery stores use much space on bulk goods, these would be shrunk and taken to the backroom and fulfilled on orders. While their backroom stores would become distribution centers for their online orders, bringing in true omni channel, not just from a consumer standpoint, but from a supply-chain as well.
Technology play will be much higher, there would be more cashless and card-less transactions, curb-side pickup, etc. We will see more differentiation in store formats catering to local demography. Customer segmentation would be used to tweak experience.
Grocery store experience centers would be different compared from downtown to suburbs. The store itself would have a personality and how it will have a conversation with its shoppers would differ. E.g., Suburbs with young families would perhaps have centers where recipes with organic food are cooked. A fast-moving store in downtown would focus on information.
VIN & RONO: The most significant would be personalization at an individual consumer level. Consumer behavior would have to be analyzed to offer differential pricing, personalized and real-time promotions, and better service. Personalization would not be restricted to consumer but would extend to the store and products as well. Depending on the store format and the products being offered, retailers would look at dynamic assortment, driven through an app in the store.
Pricing is a relatively ignored area in retail today and has huge potential to increase profitability for the store.
The other areas would be traditional levers of Cost and Risk management. Labor is the biggest operating cost component for a store (25-30%), can technology reduce this? How can inventory and shrinkage be reduced? Retailers will have to think about these questions. E.g., retailers spend significant money each year servicing claims from customers who meet with minor accidents in stores, how can these be avoided or reduced. Energy consumption within the store is another cost driver that would be rationalized.
Retailers must also revamp their processes to embrace omni channel in its true sense, be it making replenishments in smaller batches in a day, better managing staff with rotation of shifts, and such, to make their store future ready and have a meaningful conversation with their customers.
VIN & RONO: Like oil, data is invaluable, not just for retail, but any industry of today. It is going to revamp the retail sector in coming years and stop the physical store from extinction and becoming the dinosaurs of our generation.
But just like oil, data can be inflammable too, if not utilized effectively. We see data to be regulated increasingly in the future, it has already started in EU with introduction of GDPR. But in future, data would be marketed, sold, and utilized in pre-set conditions.
Retailers will have to be judicious on how they collect and use data. How the data is analyzed and benefitted from would be most important, rather than racing to collect more and more of it. Governance standards would have to be established with how data is standardized. Many companies today are not doing a good job of this.
“Retail sector today is highly under-leveraged in predictive analytics. Retailers should invest in this in 2019.”
VIN & RONO: Predictive customer analytics has had a giant evolution in a very short time and it now is a necessity, a given. Retailers need to utilize this in physical stories to maximize the potential. It should be used for defining pricing, inventory, merchandising, and even number of stores needed.
Predictive customer analytics in future should be used beyond this, it should help influence consumer behavior. So influence external entities rather than just internal. Consumers should become influencers of your brand.
The retail sector today is highly under-leveraged in this area. It has tremendous un-utilized opportunity to gain from predictive analytics. Retailers should invest in this in 2019.
Retailers need to take the organization along to make any predictive customer analytics program successful. Technology is one aspect, but business should understand the value and be an equal partner.
VIN & RONO: AI has infinite potential to disrupt retail. This should be looked at in two broad spectrums.
At the customer facing end, we have seen apps from home improvement retailers where you can take a picture of your room and the app shows you assortment of products enabled through deep learning. Or take a picture of a pair of shoes and suggestions roll up on your screen based on your preferences.
On the backend, AI can impact on how pricing algorithms are defined to make almost real-time price suggestions for individual customers. It can help take decisions on inventory movement, or control energy consumption in the stores, or guide store associates.
RONO: I am looking forward to seeing how AI or Robotics would impact the store of the future.
VIN: I am really interested in learning how this high influx of technical innovations that are replacing store associates (think Amazon Go) replace the human touch, empathy, or need for dialogue that a shopper visiting a physical store looks for.
rue21 has been making news for its investment in analytics in order to transform itself into a more customer-centric business.
We caught up with Dr. Mark Chrystal, Chief Analytics Officer at rue21 to understand more about how he perceives the role of analytics in retail today, his upcoming talk at NRF’s Big Show and the future of retail.
MANTHAN: In your role as the Chief Analytics Officer, what would you say is the biggest challenge facing rue21 in 2019?
MARK: The biggest challenge I face is the ability to explain what is happening in the industry and more importantly, with our current, lapsed and potential customers. My job is to help the business navigate the environment and provide insights that help chart a course to success. This is particularly challenging in the current retail environment and for a company that is in the midst of a turnaround.
“We are now seeing analytics embedded across each functional unit as means of explaining what is happening, where it is happening, and how best to respond.”
MANTHAN: In your 20 years of retail experience, what have you noticed about the changing retail industry’s attitude towards analytics?
MARK: When I started in retail, analytics was being thought of as secondary to the success of a retail business. Analytics groups, if they did exist, were often in their own silos away from the day-to-day running of the business. At that time, most of the CEOs and head merchants across retail were trained based on having direct face-to-face interaction with their customers, and therefore thought about the business through a much more qualitative micro-level lens.
With the advent of eCommerce and social media and social influencers, the environment is far more diverse and complex than it was twenty years ago. We are now seeing analytics embedded across each functional unit as means of explaining what is happening, where it is happening, and how best to respond.
“Retailers need to employ real-time analytics to help them identify emerging themes, issues and opportunities.”
MANTHAN: AI promises to make data-driven business processes more intelligent. What are the top use cases you think might have big impact in retail today?
MARK: The top use cases for AI today, are in the automation of rote tasks, and in the identification of patterns and opportunities that are not as readily discernable via other analytical methodologies or business processes.
MANTHAN: We understand you’ll be speaking at NRF. What is the product paradigm shift going to be about?
MARK: I will be speaking at NRF about the shift within retail towards data-driven decision-making and organizational culture. The presentation will focus mostly on how merchandising functions need to, and are, making this shift.
“Retailers need to create organizational cultures that are capable of interpreting real-time insights and taking action on those insights.”
MANTHAN: As enterprise and customer data continue to grow and customer journeys evolve, how can retailers keep up with sensing, analyzing and responding to opportunities potentially unfolding every day?
MARK: I believe retailers need to employ real-time analytics to help them identify emerging themes, issues and opportunities with their customers and competitors. This means having models tuned to real-time analysis, alerts and insights across the retail footprint. This also means that retailers need to create organizational cultures that are capable of interpreting real-time insights and most importantly, taking action on those insights.
Most retail organizations have not evolved to this point yet and are still grappling with the change from the old merchant model to the model that modern customers clearly demand. The best retailers understand this, have made those changes, or created those types of cultures at inception and they are reaping the rewards.
MANTHAN: Thank you, Mark!
rue21 has selected Manthan, a leading provider of cloud analytics and artificial intelligence solutions, to help advance its analytic capabilities. The retailer will be rolling out Manthan’s Customer Data Platform, Customer Analytics and Enterprise Retail Analytics solutions to gain insights within the business and better connect with consumers.
Visit us at NRF 2019, Booth 4719 for more information on how Manthan can help you use analytics to become a future ready retailer.
This year at the NRF Retail Big Show 2019, Manthan will be showcasing The Store That Knows
This AI-powered, omnichannel entity offers analytics and insights 24×7, giving you smart recommendations while implementing your decisions. All in natural language.
And if that’s reason enough, take a look at the following infographic to see who else is likely to be at the NRF Big Show.
Changes are rampant in the retail industry. Every day we hear of both big brands (and small ones) closing shop or downsizing in an effort to stay lean and competitive. To understand in depth what’s happening in the retail landscape, we spoke to Doug Stephens.
Doug is the founder of Retail Prophet, and one of the world’s foremost retail industry futurists. The author of two groundbreaking books on retail, a nationally syndicated retail columnist, and over 20 years of experience in the retail industry, Doug brings together his unique perspective to provide Manthan with his insights on retailing, technology and consumer behavior.MANTHAN: You speak of a sea change in retail and the trouble that’s coming for brick and mortar stores – can you explain this revolution?
DOUG: We have entered an era where media (in all its various form factors) has become “the store”. Whether it’s a magazine ad I can activate with my smartphone, my connected appliances, my smart TV or my in-home artificial intelligence, media is no longer a call-out to visit a store – it is the store. And this fact will only continue to escalate and permeate more aspects of our consumption. Therefore, the role and nature of physical stores must change in order to adapt.
Stores have to become places that move beyond the mere distribution of products and become enchanted spaces that distribute remarkable experiences. The problem is, most retailers aren’t internalizing this reality yet. Most store experiences remain unremarkable and it’s a fact that’s taking a toll on retail generally. If we’re honest, the retail brands that are getting wiped out aren’t being mourned because they had in fact become irrelevant long before they died.
“The retail brands that are getting wiped out aren’t being mourned because they had in fact become irrelevant long before they died.”
MANTHAN: What’s the role of technology in this revolution and which retailers are leading?
DOUG: Technology has essentially become the connective tissue in every aspect of our lives, whether we’re talking about business, leisure, commerce etc. In retail, we know that upwards of 80 percent of all retail transactions are being influenced, to some degree, by digital.
The retailers that are leading are those that are essentially using technology as the mortar between the bricks of their customer experience. They’re viewing technology as an essential means of removing friction from the customer experience as well as fortifying moments of experiential delight. Among the brands that I see as excelling are Amazon, Sephora, Starbucks, Wayfair – to name only a few.
MANTHAN: We hear experience becoming more important than the product – is that only for high involvement categories, while the drivers in other categories might be different?
DOUG: The consumer world is now divided into two very distinctly different and viable experiential spaces. On the one hand some brands are winning through high-fidelity experiences that are immersive, memorable and emotionally connected. Other brands are killing it in their categories with high utility experiences that are frictionless, fast, convenient and very cognitively connected – they just make sense. Both of these positions work and both are valued by consumers. The problem is, most retailers are neither high-fidelity nor high-utility and increasingly, that makes them irrelevant.
MANTHAN: Most businesses are struggling to become truly omni-channel – what’s your advice to them?
DOUG: I suppose I have two thoughts. First, if you’re still working on omni-channel, consider that Amazon, Google and others are already dealing in the realm of omni-presence, in the sense that they’ve launched technologies like Amazon’s Echo that are quietly infiltrating the majority of homes in North America and available to consumers 24/7. Secondly, I’m not a big fan of the word omni-channel. I prefer to think in terms of the customer journey with a brand and the various problems or opportunities along that journey.
If we can develop an intense and granular understanding of the consumer journey we can leverage the unique attributes of each channel to create the best possible solutions for the customer. With this insight, we can then begin to build the back and front end systems and technology architecture to bring the experience to life!
MANTHAN: Retailers that can best harness customer data will win – how far out do you see this becoming a reality?
DOUG: 200 years ago the local merchant that knew their customers most intimately won. And they gathered information about their customers by being discreet about their privacy, delivering personalized recommendations and experiences and by building trust.
Today is absolutely no different. So, yes, retailers with the best data have an advantage. But getting that data means that a clear exchange of value has to transpire. Data and privacy are no different than any other currency and consumers will spend their data with those brands and retailers that respect it and deliver clear value in exchange for it.
“I believe we’ll see a reengineering of the economic model for retail.”
MANTHAN: What’ does the ‘store of the future’ or ‘the intelligent store’ look like to you?
DOUG: 99 percent of the retail we see around us today is a relic of the 20th century. It’s retail that was built for a pre-digital era and a completely different consumer reality.
The store of the future in my opinion won’t be a “store”. It will be a space that draws the shopper into a story about their brand and their products. It will be less about the products themselves and more about productions – experiences that are interactive, immersive and fun. Technology will allow us to activate store experiences that are unique, personalized and adaptive based on unique customer preferences and needs.
Technologies built into the skeleton of the space will deliver real-time, website-like insights that will allow retailers to respond in real time to different customer groups and dynamics within the space.
Essentially, retail stores will transform from being the mini-warehouses they are today, to becoming entertainment and hospitality spaces that trade on social, physical and emotionally connected experiences. Products will come along in the jet stream across channels.
I also believe we’ll see a reengineering of the economic model for retail. Look for more retailers working directly with brands to create experiences – what I call physical media – for which they’re paid upfront, rather than being dependent on product sales.
MANTHAN: Thank you, Doug!