intelligent machines: steering retail planners through crisis
Andrew Fowkes, Head of Retail Centre of Excellence, SAS UK & Ireland, on how intelligent machine can steer retail planners through the current crisis.
Retail planning is tough at the best of times. When the online and physical realms of retail are bustling with activity, head office must factor a huge number of variables into the equation: everything from stock ordering and product performance to customer expectations and market share.
But as healthcare workers battle the virus and the retail industry retreats to online stores and fluctuating demand, planning has become exponentially more difficult for European retailers. The path to success is no longer as simple as studying past performance. With staffing, stock levels and trends all in limbo, retail planners now need to quickly analyse an even greater volume of data than usual. For many, it will seem impossible to make the right decisions at the right time.
Analytics and intelligent machines can be the answer these retail planners are searching for in these challenging times. As an extra member of the team, this technology gives planners the ability to understand what the data is telling them about their business. At the same time, they guide teams to see what the data means from a bird’s eye view. The ability to report and visualise data in the right way means that retail managers are afforded more time to make decisions, with more scope to plan for particular goals. Even more powerful is using advanced analytics, where AI and machine learning can greatly enhance the capabilities of a retail planning team to make accurate predictions and steer their company through this crisis.
What differences will it inspire?
Outwardly, this system could look very similar. But underneath, it is likely to improve the customer experience significantly. I certainly think there will be no adverse effects for customers. You may recall the initial fears that RFID technology would affect customers and their data, but its use is now standard, and greatly improves customer convenience. Our customers confirmed that it really does not matter to them whether the selection of goods, pricing or advertising are chosen by machine or a human buyer. Except that machines drawing on data may have a better idea of what customers want!
However, increased use of machines will minimise HQ functions and roles. This is already happening, driven by rising costs and squeezed margins. It will also mean faster decisions and changes in the ranges on offer.
Effective retail planning is changing the game
Again, this is already happening. In Manchester, the online fashion retailer ‘In The Style’ has a full new range every two weeks, with a 75% sell-through. The increasing number of convenience-sized units means that a higher proportion of ranges change more frequently. Aldi and Lidl have shown the way, with their weekly specials and smaller range (3,500 SKUs vs. 25,000 in an average supermarket), resulting in a smaller average basket but high footfall.
The use of machines should also mean more personalised offers and range. A good example of this is the Very group, an internet shop with personalised assortments and offers tailored to individual preferences and delivered to mobile devices to improve conversion.
Finally, we should also see retail becoming more sustainable, with less waste resulting from mistakes and markdowns. Historically we have seen higher margins to enable businesses to afford the waste and markdowns. Will we now see a consumer tolerance measure, or even new legislation?
What will drive adoption, and what are the risks?
There are a number of pressures driving retail towards the use of machines and analytics. These include competition, customer demands and the resulting profit squeeze. It seems unlikely that changes in retail will be driven simply by availability and capability of technology. Generally, there needs to be a better reason. Adoption may, however, be driven by results, especially if the technology starts to perform better than its human equivalent, or – more likely in my opinion – in combination with people.
It seems unlikely that people will ever be removed completely from the equation. History tells us that a hybrid approach, combining people and machines, is usually stronger than either alone. However, we may see a shift in creativity from the retailer back up the supply chain to manufacturers and producers. We may also see the differences between offers and ranges shrink – but perhaps that is where the human input will become more important. After all, nobody wants to look exactly like everyone else.
There are also risks that the model will degrade over time. This will mean that customers gradually start to see less that they like. As always, machine learning and modelling will require maintenance and checks for bias. Over time, though, I think we may well see retailers becoming technology companies. Arguably Amazon has shown us the way, and this may be where many others are heading.
AI could take the weight off planners
Modernising your retail planning capabilities could vastly increase your organisation’s ability to reach customers with the product they want, at the moment they want it: an indicator of top-notch customer service. However, the added bonus is that retail planning welcomes intelligent technologies as part of the team. This means it can take the strain when difficult decisions must be made, especially in times of considerable uncertainty. With the ability to understand the existing data on a deeper level than ever before, intelligent machines can augment the abilities of the team around them and inspire decisions which keep retailers at the top of their game.
For more information on business topics in Europe, Middle East and Africa please take a look at the latest edition of Business Chief EMEA.
Automation of repetitive tasks leads to higher value work
Two-thirds of global office workers feel they are constantly doing the same tasks over and over again. That’s according to a new study (2021 Office Worker Survey) from automation software company UiPath.
Whether emailing, inputting data, or scheduling calls and meetings, the majority of those surveyed said they waste on average four and a half hours a week on time-consuming tasks that they think could be automated.
Not only is the undertaking of such repetitious and mundane tasks a waste of time for employees, and therefore for businesses, but it can also have a negative impact on employees’ motivation and productivity. And the research backs this up with more than half (58%) of those surveyed saying that undertaking such repetitive tasks doesn’t allow them to be as creative as they’d like to be.
“When repetitive, unrewarding tasks are handled by people, it takes time and this can cause delays and reduce both employee and customer satisfaction,” Gavin Mee, Managing Director of UiPath Northern Europe tells Business Chief. “Repetitive tasks can also be tedious, which often leads to stress and an increased likelihood to leave a job.”
And these tasks exist at all levels within an organisation, right up to executive level, where there are “small daily tasks that can be automated, such as scheduling, logging onto systems and creating reports”, adds Mee.
Automation can free employees to focus on higher value work
By automating some or all of these repetitive tasks, employees at whatever level of the organisation are freed up to focus on meaningful work that is creative, collaborative and strategic, something that will not only help them feel more engaged, but also benefit the organisation.
“Automation can free people to do more engaging, rewarding and higher value work,” says Mee, highlighting that 68% of global workers believe automation will make them more productive and 60% of executives agree that automation will enable people to focus on more strategic work. “Importantly, 57% of executives also say that automation increases employee engagement, all important factors to achieving business objectives.”
These aren’t the only benefits, however. One of the problems with employees doing some of these repetitive tasks manually is that “people are fallible and make mistakes”, says Mee, whereas automation boosts accuracy and reduces manual errors by 57%, according to Forrester Research. Compliance is also improved, according to 92% of global organisations.
Repetitive tasks that can be automated
Any repetitive process can be automated, Mee explains, from paying invoices to dealing with enquiries, or authorising documents and managing insurance claims. “The process will vary from business to business, but office workers have identified and created software robots to assist with thousands of common tasks they want automated.”
These include inputting data or creating data sets, a time-consuming task that 59% of those surveyed globally said was the task they would most like to automate, with scheduling of calls and meetings (57%) and sending template or reminder emails (60%) also top of the automation list. Far fewer believed, however, that tasks such as liaising with their team or customers could be automated, illustrating the higher value of such tasks.
“By employing software robots to undertake such tasks, they can be handled much more quickly,” adds Mee pointing to OTP Bank Romania, which during the pandemic used an automation to process requests to postpone bank loan instalments. “This reduced the processing time of a single request from 10 minutes to 20 seconds, allowing the bank to cope with a 125% increase in the number of calls received by call centre agents.”
Mee says: “Automation accelerates digital transformation, according to 63% of global executives. It also drives major cost savings and improves business metrics, and because software robots can ramp-up quickly to meet spikes in demand, it improves resilience.
Five business areas that can be automated
Mee outlines five business areas where automation can really make a difference.
- Contact centres Whether a customer seeks help online, in-store or with an agent, the entire customer service journey can be automated – from initial interaction to reaching a satisfying outcome
- Finance and accounting Automation enables firms to manage tasks such as invoice processing, ensuring accuracy and preventing mistakes
- Human resources Automations can be used across the HR team to manage things like payroll, assessing job candidates, and on-boarding
- IT IT teams are often swamped in daily activity like on-boarding or off-boarding employees. Deploying virtual machines, provisioning, configuring, and maintaining infrastructure. These tasks are ideal for automation
- Legal There are many important administrative tasks undertaken by legal teams that can be automated. Often, legal professionals are creating their own robots to help them manage this work. In legal and compliance processes, that means attorneys and paralegals can respond more quickly to increasing demands from clients and internal stakeholders. Robots don’t store data, and the data they use is encrypted in transit and at rest, which improves risk profiling and compliance.
“To embark on an automation journey, organisations need to create a Centre of Excellence in which technical expertise is fostered,” explains Mee. “This group of experts can begin automating processes quickly to show return on investment and gain buy-in. This effort leads to greater interest from within the organisation, which often kick-starts a strategic focus on embedding automation.”