Why It's Important to Become an Innovative Retailer...and How to Start
What do you think when you hear the word, “innovative”? Typically, our thoughts go to making strides in technology—something really big like artificial intelligence, IoT, virtual reality, robots, and the like. While this is true, the real purpose of innovation is to improve what we already have, and it doesn’t have to be earth-shaking. In fact, the most beneficial innovation typically occurs behind the scenes. For retailers, innovation should ultimately make things better for your customers with systems of intelligence that leverage every employee, process, and data asset across the organization. It’s about building a better business model to deliver on your promise to your customers.
Digital Transformation Starts with Innovating with BI and AI for Continuous Improvement
Today’s retailers can sink quickly in such a fierce market. Without visibility, they lose the ability to make the strategic and operational decisions needed to better serve customers; without the ability to pull data together from disparate, outdated systems, they can’t deliver on the brand promise to customers. That’s where digital transformation comes in. Digital transformation requires using technology to develop new capabilities, so overhauling technology must be part of the process…but where does it start?
When you look at the technology landscape, business intelligence (BI)–the language of your business performance, and Artificial Intelligence (AI)–the engine that continuously generates improvements, are where it’s at for innovative retailers. While automation is important, you must first use BI tools to establish a baseline for and foundation of your improvements or innovations.
By gathering and putting data to work throughout your entire architecture–including ERP, CRM, and other systems–you can improve all facets of your business. AI and BI are accessible ways to make continuous, iterative improvements to how you deliver on your brand promise across the board. Innovative retailers today are using AI and BI to improve customer acquisition, conversion, personalization, and loyalty, but they’re also using it to improve efficiency—and increase margins as a result.
Models are the Key to Becoming an Innovative Retailer
But the process doesn’t end with updating technology. “Models Will Run the World,” an article in The Wall Street Journal, brings into focus the importance of changing the way we think about AI. Innovative retailers are actually software companies, in that they have adopted software to maintain or extend their competitive edge. The real power behind AI and data are models.
Decision frameworks in which the logic is derived by algorithm from data, rather than explicitly programmed by a developer or implicitly conveyed via a person’s intuition. The output is a prediction on which a decision can be made. Once created, a model can learn from its successes and failures with speed and sophistication that humans usually cannot match.
The Wall Street JournalModel-driven businesses go beyond being data-driven:
- They use models for key decisions in the business process to create revenue streams or cost efficiencies.
- They collect and analyze data to help humans make better decisions.
- They create systems to continuously improve models that define the business.
In data-driven businesses, the data helps the business; in model-driven businesses, the models are the business. Without models, AI doesn’t have the framework it needs to focus on what is most important.
Start Using AI and BI Now to Become an Innovative Retailer
With tight margins and a constantly changing landscape, retail is competitive, and smart retailers need to innovate using technologies like BI and AI to stay ahead. If you manage them correctly, BI and AI can join forces to drive real next-generation transformation. ArcherPoint’s retail experts understand how to put BI and AI to work, so let’s talk about how we can help you become an innovative retailer.