As the retail industry settles into 2017, CIOs industry-wide are dusting off their To-Do lists, and creating a game-plan on how to implement this year’s top priorities.
While these projects will run the gamut, retail is facing an inflection point — one that is influenced by new, “smarter” solutions that will not only change the trajectory of how businesses operate, but how chains will communicate with employees and customers.
With so many projects — and underlying disruptors — to choose from, following are my predictions of where CIOs will focus their attention throughout 2017:
Machine learning. Artificial intelligence is finding a place in retail, especially as more computers are designed for machine learning. A platform where computers learn from previous — and ongoing — processes, machine learning will play a role in how retailers embrace complex data, and produce more accurate results.
Staples for example, is piloting a machine learning-enabled office supply reordering system with business-to-business customers. The cognitive learning process makes the chain “smarter,” allowing it to make predictions, optimize orders, and better service customers.
A new level of personalization. According to loyalty marketing firm ICLP, 59% of U.S. customers would buy more if retailers understood their individual requirements better. This is more proof that traditional loyalty initiatives that neglect to individualize rewards and offer relevant perks are dead.
Shoppers are demanding their favorite brands cater to their specific needs — online and offline — or they will move on to a brand that can deliver. Consider this a wake-up call: it’s high time to better detect and act upon customers’ preferences, wishes and needs — and tap new sources to do so. Dig deeper into mobile and social networks, and use these nuggets to augment transactional data. Armed with this richer level of personal data, use shoppers’ individual interests, location tracking, and social influence to drive even more personalized engagement.
Drones for merchandise deliveries. If Amazon has taught the industry anything, it’s that relying solely on traditional delivery methods don’t work. If retailers want to compete with same day deliveries (heck — even hourly windows), they need to think outside of the box. Many companies, including Walmart, Toys R Us, among others, are off to a good start with buy-online-pick-up in-store services. CVS is further shrinking the window with its curbside pick-up service.
To cover more ground, especially in rural areas, however, drone deliveries are beginning to take off. Unsurprisingly, Amazon laid the gauntlet with its PrimeAir drone pilot in England right before the holidays. However, other competitors, like 7-Eleven are trying their hand at the service as well.
The key will be finding the right formula of technology, service and timing. While companies are in a race to see who can deliver merchandise the fastest (these aforementioned examples are making deliveries within 10-30 minutes), the only way drones will fly is if they can consistently get merchandise into shoppers’ hands quickly, accurately, and damage-free.