How to stay competitive in the Amazon era
Anticipating the e-commerce and cloud giant’s arrival, Australian retailers have been hurriedly transforming in recent years. We’re seeing brands such as Myer, Woolworths and The Iconic heavily investing in their online and omnichannel portfolio.
While these investments are encouraging steps towards more personalised customer experiences and improved delivery turnarounds, they are far from being enough to compete with a business which has invested over $16 billion in innovation last year alone.
Amazon’s wild success stems from the power of Artificial Intelligence (AI) and machine learning long before the two terms became buzzwords.
From product recommendations to supply chain to drone deliveries, machine learning – the ability of data to learn from past experiences – has raised Amazon’s operational efficiency and personalised shopping experiences to new, unmatchable heights.
So how can Australian retailers, with technology and innovation budgets that don’t compare to Amazon’s, deliver similar experiences and compete in the Amazon era?
Turn the data challenge…
Data is now the core of any new-generation retail strategy. To harness it and turn it into a competitive advantage, retailers first need to recognize the biggest challenges they are facing.
Dealing with multiple data sources, building the infrastructure that can process and analyse data, and automating communication between customer-facing and back-office platforms are the biggest hurdles for many retailers, especially for those that are small and medium-sized.
Most retailers understand the potential of their data but don’t really know how to extract business insights from it. As a result, many pile up data mining and analytics platforms, combining them with app development add-ons. Instead of bringing more value to the business, this ultimately makes the whole analytics engine overly complex and inefficient.
Without proper data science capabilities, retailers will never be able to access the full potential of data analytics nor take advantage of the AI and automation revolution. Leveraging AI to make sense of data is what will determine which Australian retailers will succeed.
… into a data opportunity
Retailers don’t necessarily need an army of data scientists to compete and survive in the retail revolution. What they need is a solid AI strategy based on integrating all systems, improving data connectivity and enhancing automation.
Step 1: Remove silos
When looking at strategic investments for the next 12 to 24 months, marketers, operations managers, customer service and IT experts should work together to identify gaps within the current retail lifecycle.
Is your user experience immersive? Is it smooth across all traditional and emerging channels? Is your mobile app fully integrated into your CRM platform? Is consumers shopping history data communicating with the customer loyalty program? Does the supply chain platform have access to enough information to process orders efficiently?
Step 2: Improve data connectivity
Once the business understands where data connectivity is lacking, it can wisely choose a business application development platform that will stick all the parts together and bring intelligence to the data that matters.
Today, retailers can find platforms that combine smart app development features and data analytics capabilities that can be used by both IT and non-IT staff including CMOs, COOs, and customer service agents.
Retailers need platforms that enable all stakeholders to build and deliver high-performing and connected applications and have a single view of the customer journey based on immersive experiences. Improving data visibility, management processes and operational efficiencies by feeding accurate data into other systems makes the business more responsive.
Step 3: Fuel the automation engine
Deploying connected mission-critical business applications that are quick to market, reliable, secure, and easy to evolve with changing customer needs and compliance requirements will lead to better automation.
Today’s applications are expected to support not only the right set of screens and devices but also increasingly non-GUI interfaces like voice, AR/VR and more. The experiences they deliver should engage users based on their digital preference which may change throughout the user journey.
Retailers can benefit from scalable applications that can handle massive numbers of transactions and data. To make that possible, they need to be based on flexible microservices that can add capacity or other infrastructure services easily. Today’s applications should be ready to work at “internet scale,” meaning to be able to process a large number of transactions and great volumes of data and handle heavy workloads.
With these capabilities, retailers can automate the discovery of data that matters and process orders through their supply chain with speed and precision. They can automate the personalisation of customer journeys, using data from multiple sources to adapt to each customer’s shopping habits, offering unique experiences based on past behaviour, and predict what shoppers will want tomorrow.
To build such capabilities and avoid becoming irrelevant, retailers need to ensure their legacy systems are ready to offer immersive experience. It should be powered by cognitive and intelligent capabilities and have real-time connection to different data sources.
According to Forrester’s ECommerce Trends And Outlook For Asia, e-Commerce in Australia is set to grow to $38 billion in 2021, with online buyers growing from 12.6 million in 2016 to nearly 15 million in 2021. With Amazon’s arrival down under, it becomes vital that Australian retailers invest in AI technologies that will give them the knowledge to automate communication throughout the supply chain and deliver truly personalised and connected shopping experiences.
Mark Armstrong is vice president and managing director of International Operations for APJ and EMEA at Progress.