The explosion in using curbside pick-up, or buying online and picking up in the store, or engaging customers through omnichannel experiences are just some of the factors that the retail industry adjusted to during the global Covid pandemic. Further, customer expectations had shifted from a nice-to-have to a must-have mentality. With this in mind, many retail companies were scrambling to keep up and turned to technology to assist.
Did technology help or hurt? It depends on how well the solutions were planned, implemented, and in continuous evolution. Those tech leaders that co-innovated and co-created put themselves in a position to be on the cutting edge. The customers benefitted from this creativity while reaping the benefits of having a purpose-built solution for their unique needs. With a focus on the retail industry, the fifth day of Industry Cloud Battleground Week covered this.
Microsoft on Retail
Despite the massive disruptions from the pandemic, some companies rallied and made a definitive impact. Microsoft coined a phrase that described this very well: “Covid-19 has been the new Chief Innovation Officer for [the retail] industry.”
The new world that customers are navigating has a new definition of digital shopping. It is as much about the visual presentation of the product, the assortment, the quality of recommendations, shipping speed, fulfillment options, and the ability to personalize the product.
How did Microsoft exemplify this new definition?
- Equip customers with new capabilities. The Walgreens Boots Alliance spanned retail and healthcare through the Walgreens app. On one hand, customers could experience a virtual health visit. On the other hand, Microsoft tools helped them predict inventory levels of the essential products as consumers shifted online.
- Build on the value of existing technology. Microsoft heard from its retail industry customers, and they emphasized that they wanted to go faster and get more value from their data. This was the genesis of the Microsoft Cloud for Retail, which helps retailers do three things: 1) Get the most out of their most important asset—data. 2) Empower 80% of the workforce that are frontline workers. 3) Give retailers a complete view of their customer journey.
- They are customer zero. Microsoft realized the need to pivot quickly with its own retail stores. They closed many store locations and transitioned 3,000 store associates across 83 locations. Microsoft Dynamics 365, Microsoft Teams, and the Power Platform to promote service, support, and sales were under that transition.
Workday on Retail
Workday’s core message for the retail industry was this: Partner with retail organizations in their digital transformation to innovate together, realize that the last 18 months have been a time of challenge and opportunity for retailers. These retailers have been dealing with a global labor shortage, supply chain disruptions, and enormous growth in e-commerce due to changing consumer behaviors.
The retail industry is heavily dependent on people. They are the crucial factor in the shopping experience. However, retail is amid a talent crisis. Before the pandemic, the turnover rate was nearly 70%. Today’s labor challenges and market conditions have only magnified this. Retail saw a mass exodus of nearly 4 million people quit their jobs in April 2021.
Where is Workday focusing to address these challenges?
- Increase employee upskilling and efficiency. Workday partnered with Patagonia to leverage machine learning to recognize the skills gaps in its employee population. Before this, they were only able to collect about 28% of the skills data. Afterward, they brought that up to 73%. In conjunction with this effort, they simplified the work for employees by increasing the communication between HR and finance.
- Meet customers where they are. Retailers are meeting customers across the apps and services they use every day. This results in the need for best in class, supply chain, and merchandising that’s fit for purpose. This requires the best in class for the back office, the middle office, intelligent solutions to run HR and finance, and the operations to keep things in concert with the entire ecosystem.
- Bespoke consumer experiences. Workday stated that the future of retail is more hybrid than ever before. Consumers want tailored shopping experiences that cater to their preferences at every step of the buying journey. Whether online or in-store, retailers will need to provide shoppers with a personalized and humanized experience across all these channels. From virtual consults with store associates to concierge service experience answering questions immediately and providing recommendations via text, email, or other social streams using technologies like virtual reality or augmented reality. These are all part of the personalized experience.
Salesforce on Retail
For many retailers, technology solutions filled a critical gap in the services they provided to their customers. As a result, Salesforce saw that 70% of retail executives are planning to increase tech investments to build loyalty at scale. Digital for work is the norm and is forcing everyone to realize the need for an augmented human experience.
Further, the shopping journey is fragmented, and retailers are challenged to make sense of this fragmentation. Salesforce revealed that the new age customer traverses an average of nine touchpoints across the physical and the digital world. Also, 83% of shoppers expect flexible shipping and fulfillment options such as buy online, pick up in-store.
Where is Salesforce focusing its efforts to enrich the retail experience?
- Break down organizational silos. Salesforce shared that rich information is trapped within the siloed walls of the retailer. Retailers on average manage customer engagement across 44 disparate systems, making it difficult to extract information and layer in that intelligence.
- Collaboration accelerates time to market. Nordstrom deployed Slack as part of Salesforce Customer 360 which translated into a 70% increase in CSAT, increased speed to market by 23%. Additionally, they used Slack to create a central channel to help with employee onboarding and escalations.
- Clicks, not code. Salesforce discovered that 54% of business users are frustrated attempting to stitch disparate systems together. The MuleSoft Accelerator for Retail allows tech-savvy people to automate processes across workflows with clicks, not code.
Google Cloud on Retail
Google Cloud outlined its retail approach by creating a platform, foundation, and industry solution road map that helps drive the necessary continuous innovation with ease and pivot to the demands of the changing consumer dynamic. To deliver on this, Google Cloud has built out a team of retail leaders who have spent their careers innovating and driving the P&L, product, e-commerce, and data roles in all the retail sub-verticals.
Additionally, Google Cloud is determined to deliver solutions that drive personalized omni-experiences. These solutions need to bring a frictionless experience as customers evolved in how they interact and products. Complementing this with retail search, visual search recommendations, and AI makes the experience more natural and intuitive.
How is Google Cloud building on top of this foundation?
- The quest for data. All the interactions a customer has with retailers create an exponential amount of data. The difficulty is unlocking the value of this data and combining it with critical supply chain and logistics data to personalize the experiences. This is all capable with the Google Cloud BigQuery Analytics Hub which enables different players to interact with each other and exchange data in a safe and secure way.
- Reduce the friction. Google sees two areas that they are thinking about. The first is the autonomous store. If a consumer is searching for a specific product, it shouldn’t matter where they purchase it from. The search experience should stretch across all brands and then surface an easy checkout experience. The second area is frictionless digital commerce. This encompasses a full understanding of the customer journey which includes mobile.
- Reimagine product delivery. Practical AI is being leveraged behind the scenes to speed up the delivery of products to customers. While a customer is creating their order, algorithms work in unison to optimize the delivery and determine if a customer is eligible for express delivery. This then feeds back into the full data modeling to improve the experience in the future.
Oracle on Retail
Food distribution, consumer packages goods manufacturers, and retails are all part of the consumer purchase cycle. Oracle is working with its customers to discover pain points and ways to optimize opportunities. Shopping behaviors have changed, and these morphed expectations have caused retailers to take a step back.
For Oracle, this shift plays into its strengths. Oracle offers SaaS applications for retail, database solutions, and advanced analytics that are combined with supply chain and financial capabilities. However, Oracle has been arduous in its efforts to stay flexible and resilient to react.
What is Oracle focusing on amid the blurring lines across industries?
- Help its customers increase revenues. Oracle highlighted that when customers purchase online and then pick up in the store, the margin of the basket size goes up by 333%. This requires retailers to offer solutions for customers to allow them to purchase how they want. If these options are not offered, they will go elsewhere.
- Understand consumer concerns outside of products. For some people, the source of their food, or how it was captured, or if it was part of sustainable efforts impacts their buying decisions. Oracle collaborated with Chipotle to help them build upon their belief that “a burrito can change the world”. The complex ecosystem of suppliers, distribution centers, and more was easily managed through Oracle and allowed them to continue with their mission to cultivate a better world.
- Utilize the power of pricing optimization. Oracle found that many people realized when their favorite stores would run promotions, such as 20% off something. However, some people were waiting until it was 55% off. This could change whether they buy online or purchase in a store. Understanding pricing patterns coupled with customer intent creates a powerful combination when using AI and machine learning.
SAP on Retail
How many of you purchase specific product brands? Are you swayed by other brands with competitive prices? SAP outlined its collaboration with its customers to help improve brand image and solve challenges moving forward. Moreover, SAP’s customers need to be flexible and modular with access to a solid technology foundation.
Retailers are working hard to break down data silos, process silos, and design new experiences for their customers. The conversations SAP has had with its customers have surfaced one of the biggest priorities: drive innovation at scale. This means it should traverse merchandising, supply chain, store operations, and order fulfillment.
How is SAP delivering upon this premise of flexibility?
- Increase trust in brands. For the 132-year-old apparel company Carhartt, they had to shift from clothing for just farmers and construction workers and uniforms to know top celebrities sporting the Carhartt brand. SAP helped Carhartt meet two imperatives. First, achieve 22 omnichannel scenarios out of the box. Second, drive improved security and compliance to meet the regulatory requirements such as GDPR.
- Rethink the physical store. One SAP customer, Valora, wanted to maximize the value of the physical interaction between employees and customers. They took the concept of physical environments literally and create very small convenience stores from shipping containers and place them in high-traffic areas like train stations.
- Predict consumer demand. The value of data can’t be overstated. For Coop Switzerland, it was important to use data to build a strong model of sustainability and reduce food waste. They used data to put the right products in the right locations in anticipation of shifting consumer demands. AI and machine learning helped Coop to pivot quickly and shift their replenishment decisions in a real-time manner.
Industry Cloud Battleground Week: Available On-Demand
Sponsored by Salesforce, Google Cloud, Oracle, Microsoft, SAP, and Workday, this 5-day digital event delivered insights to inspire, educate and engage business and technology leaders who are actively defining their industry-specific cloud strategy.