How Retail is driving Digital Transformation through Intelligent Automation

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Swapna Karandikar

May 30, 2019

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How-Retail-is-driving-Digital-Transformation-through-Intelligent-AutomationToday’s retail consumers expect an intuitive, seamless and error-free experience when interacting with retail brands from inspiration to research, purchase and delivery. This is true for almost all retail segments, be it grocery, apparel, furniture, consumer electronics, durables, personal care, books, music and more.

Intelligent automation brings efficiency to the entire retail product life-cycle: transforming it into a faster, cost competitive, error-free, regulatory compliant, and secure process with high availability and traceability.

According to a study by National Retail Federation, “Currently, 40 percent of retail and consumer product companies use intelligent automation. That number will increase to over 80 percent by 2021.”

This digital transformation will be wide-spread, enhancing both customer experience and operations. Here are four operational areas where we are seeing an uptrend in the utilization of intelligent automation and other digital transformation technologies as well as some examples of brands who are already deriving real value from these initiatives.

Intelligent Automation Use Cases for Sales, Marketing and Customer Service

  1. Virtual Assistants for questions, sales, post-sales support
  2. Voice recognition and customer authentication for segments including beauty and personal care, apparel, footwear and pharmacy
  3. AI enabled self-checkout
  4. Customer Recommendation Engines

Brands Who are Investing in Intelligent Automation for Sales, Marketing and Customer Service

The world’s top retailer, Walmart, has made substantial investments in technology, making it the third largest IT spender in the world after Amazon and Alphabet. Walmart recently purchased an Israeli product review insight firm-Aspectiva, whose technology analyses consumers’ product reviews to help shoppers make decisions. To stay relevant, it is investing in the technologies to build both efficient and integrated systems spanning all areas of the order lifecycle – across shopping lists, customer recommendations based on past data, chatbots for customer service, warehouse automation, pickup, logistics and delivery, etc.

Walmart’s Mobile App chatbot Jetblack provides a personal shopping service where customers can order via a messaging style interface with voice capabilities. When a user tells new virtual personal shopper, Jetblack, “Hey J, we need a birthday gift for a five-year old who loves puzzles”, it eagerly responds “Gift wrapped and delivered!” – It provides curated recommendations, fast delivery, and easy returns. Since Jetblack’s launch in May 2018, customers have reportedly accepted 79% of its product recommendations.

Walgreens is also transforming its business through an alliance with Alphabet’s medical tech unit Verily. Verily, a sister organization of Google, uses data science and artificial intelligence tools for better health outcomes to chronic health issues.

Amazon has its own AI enabled and integrated CRM system which provides shoppers with:

  1. Tailored Offers and Promotions
  2. Recommendations
  3. Customer Support

Top retailers are investing in these integrated technologies to gain deeper insights into their customers to better target them at the right time with the right offers and recommendations as well as provide the best support possible. Some examples include Costco with their AI enabled SAP Sapphire, Walmart utilizing Salesforce, and Alibaba utilizing SAP.

Intelligent Automation Use Cases for Retail Logistics

  1. Warehouse Automation and in-store management
    1. AI for stock replenishment
    2. In-store scanners for shelf scanning
    3. AI- Powered visual inspection for warehouse assets
    4. AI for assortment rationalization
  2. Delivery
    1. AI for routing and scheduling optimization and last mile delivery
    2. AI for inventory shrinkage monitoring
  3. Returns
    1. AI for reverse supply-chain and returns management

Brands Who are Investing in Intelligent Automation for Retail Logistics

Kroger has entered into a partnership with Ocado to build automated fulfilment warehouses over three years with advanced warehouse technology and robotics to better compete with Amazon.

As mentioned above, Amazon has changed the game of warehouse technology and fulfilment with their warehouses powered by robots, computer vision and machine learning for order picking and fulfilment. Now others are playing catchup to compete!

Walmart isn’t shying away from robots either. They are utilizing Bossa Nova in their stores to monitor stock and track inventory.

Since 2016, Carrefour has deployed an intuitive robot Pepper in France and Spain.

Alibaba, a Chinese e-commerce giant, operates a 3000 square meter warehouse with almost 70% of the work completed by Zhu Que, automated guided vehicles.

Tesco is incorporating Artificial Intelligence (AI) and Machine Learning (ML) across their business operations:

  • Integrated with Google Home, customers can add an item to their cart at any time using voice commands. If they have a delivery slot already booked it will amend that order for delivery. If they don’t, then items are added to their cart for their next order.
  • In-store routing algorithms reduce walking distance shoppers need to take when picking items in stores.
  • Computer vision algorithms through its static in-store cameras track item availability so that store staff can restock empty shelves quicker, cutting down on lost opportunity.

Intelligent Automation Use Cases for Payments and Payment Services

Consumers are moving away from cash to digital payments. Even though contactless payment is yet to become the norm in the US, it’s already quite successful in the UK, Australia and Canada.

Contactless payment systems are credit cards and debit cards, key fobs, smart cards, or other devices, including smartphones and other mobile devices, that use radio-frequency identification (RFID) or near field communication (NFC, e.g. Samsung Pay, Apple Pay, Google Pay, Fitbit Pay, Merpay or any bank mobile application that support Contactless) for making secure payments.

Brands Who are Investing in Intelligent Automation for Payments

Amazon Go already provides check-out-free service.

Others including Costco, Home Depot and eBay have embraced contactless payments by participating in Google’s for cashless payment system program. It ensures payment processing is smooth, convenient and as fast as possible.

Target announced in Jan 2019, it will soon accept Apple Pay, Google Pay and Samsung Pay as well as “contactless cards” from MasterCard, Visa, American Express and Discover in all its stores.

Key Components of Intelligent Automation

The key components of Intelligent automation use automated processes via intelligent support (AI, ML) with user friendly interfaces like bots (Chat bots, voice bots), API, microservices, transactions, reports and sensory tools. Data generated by multiple devices is fed into the event data pipeline which consolidates it and passes it on to the intelligent automation platform to act upon. The following block diagram from an article on, depicts this process:

Intelligent Automation Platform

As in any new technology endeavor, a well thought out strategy and plan is key to reduce risk and ensure successful implementation and adoption. Key focus areas should include:

  • Identifying processes who are the best fit for enhancement
  • Selection of suitable intelligent technology and tools
  • Ensuring integration with existing processes and systems
  • Change Management to reduce adoption resistance to new capabilities
  • Appropriately skilled resources or upskilling current workforce
  • Data identification, formatting and management
  • Compliance with rules and regulations related to cyber threats, data security
  • Developing trust with your consumers without needing human interaction

To begin, organizations should audit their processes, analyze the entire process flow, inventory the systems involved and review process data available to understand the frequency, execution time, and other related parameters which can be used as baselines. This will help to identify processes that will bring a tangible benefit if automated.

Once processes are identified, AI/ML can be used to set up actions based on rules and logic. A strong collaboration between the functional and IT teams is necessary to ensure proper implementation. The following graphic depicts this process further in a counter-clockwise flow, along with potential technologies that can be utilized:

Revise Intelligence Automation 20-1

In retail, a highly customer focused strategy should be the foundation for any automation implementation. Data points around customer segmentation, product identification, billing, accounting, transportation, storage, post sales service etc. should be considered as indicated in the graphic below:

Final V.20

The above graphic depicts how intelligent automation can be utilized to implement strategies across an organization (as depicted in the 3rd layer) as well as gather data which can help refine future strategies. Analytics, powered by industry, consumer trends, sales and marketing data, facilitates powerful insights which can drive more defined organizational strategy. Bot technology (shown in the outermost layer of the diagram) can be utilized to execute strategies as well as provide additional data that brings continuous process improvement over time. For example:

  • Workflow bots can provide marketing or sales team support, internal tracking of orders from billing to delivery
  • Supply chain bots can track sourcing, delivery and reporting
  • Virtual assistants and consumer facing bots provide customer support during a purchase process to provide product recommendations, order tracking and more.

It is important to note that we mentioned large and recognizable brands as examples in this post, but intelligent automation can be utilized in firms of all sizes in much smaller footprints for powerful benefits.

If you are looking to get started with intelligent automation, Emtec can help. Contact us to get started.

Have you implemented intelligent automation in your organization? Comment below with the value you have gained.

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