While it is not a reality that many retailers necessarily wish to confront, so many metrics are increasingly pointing to the inability of today’s stores to truly delight every customer. There is a longstanding, tried-and-tested, manual approach to merchandising that would appear to be bearing increasingly little fruit, in an era in which shoppers are abandoning online shopping carts and showing ever-diminishing loyalty to individual brands.
Many retailers will inevitably respond to such declining metrics for their own brand by throwing ever-greater resources at the problem, boosting their overstretched teams’ headcount. However, there are certain issues with this approach, not least the sheer expense, with the comparative gains likely to be marginal.
Furthermore, there is an even more profound problem – such a manual approach’s failure to reverse present declining conversion and customer loyalty rates.
How automation and AI could be the answers
These kind of issues have led many of our supply chain consulting clients to invest in solutions based on automation and artificial intelligence (AI), as they seek to relieve themselves of some of the ‘heavy lifting’ that would otherwise be required to provide customers with the experience they increasingly expect.
Indeed, a recent survey by IMRG has indicated an accelerating adoption of automated, AI-driven merchandising solutions. More than half of retailers polled expected to adopt some kind of automated solution in the coming 12 months, with an additional 19% anticipating they would do so in the 12 months after that. Less than a third currently had no plans to invest in merchandising automation.
Is automation truly worthwhile for retailers?
While it remains to be seen whether automation really will help to reverse those declining metrics, there are a number of at least theoretical benefits. These include an ability to delight customers through an optimised customer experience, together with a reversal of the decline in conversion rates and freeing up people to focus on where human input is important. Automation, after all, does not replace human input, instead merely automating repetitive and time-sensitive aspects of online merchandising.
All of this theoretically helps the retailer to generate more revenue from happier and more loyal customers at a lower cost, thereby maximising margins. It seems unlikely that realising such potential benefits will be a straightforward, ‘plug and play’ experience, but it does seem certain that some kind of automated future – for both retailers and other industries – is on its way.
Brands that embrace the right kinds of automation may therefore be able to look forward to great benefits with regard to both customer experience and loyalty levels, especially when it is supported with appropriate organisational change geared towards truly delighting customers.