How AI and cloud technology will reignite the UK High Street
By Anil Gandharve, VP and Global Head of Retail, CPG and Manufacturing, Mindtree
How can retailers leverage the best new technology to keep the High Street alive? That’s one of the key questions on everyone’s lips in the retail industry right now, following a spate of high profile brands going bankrupt in the first quarter of 2018.
Just last month Carpetright became the most recent victim, shutting its doors in a last ditch bid to avoid going into administration. In doing so it joins an unenviable list that includes the likes of Toys R Us and New Look. From one perspective, it very much appears as though we are witnessing the wholesale decline of High Street stores. However, the reality is that retailers are simply having to rethink what age old approaches to the selling of goods. The rules of customer engagement have changed and the retail industry must adapt.
Amazon, for example, recently did away with checkouts in its first physical store as well as seeing its sales jump last year by nearly a third; thanks largely to the growth of its Amazon Prime delivery service.
What is the point of the physical store?
Retailers need to understand the changing purpose of the physical store in the mobile first digital age. Grasping the opportunities presented by various new technologies means galvanising them. In particular, the careful maintenance of a balance between the benefits of mobile and digital technology and the reassuring emotional connection of human face-to-face interaction in stores will enable retailers to offer a truly innovative in-store experience.
Today’s consumers are more demanding and better informed than ever before. Consequently, retailers need to restructure significant parts of their supply chain to meet these new demands. Failing to do so could well see other big names wander down the same path as Toys R Us, Maplin and Carpetright, all of which were incapable of responding to today’s more agile e-commerce landscape.
Let’s be clear, these are NOT ‘dark days’ for UK retail, despite what the red tops might have us believe. Instead the market is simply readjusting to meet the new needs of today’s digitally savvy consumers. Other retailers can use this as an opportunity to learn from the recent mistakes made by fallen High Street giants.
The re-engineered High Street
Consumers want a far more personalised and tailored experience today. This then needs to be augmented by visiting a store’s website or browsing its mobile app. It’s no good just blaming Amazon and other online retailers for undercutting prices of high street competitors, otherwise how could the 2.3 percent growth in bricks and mortar sales in the last year be explained? And, if the High Street is dead, why did Amazon open its own physical store in January this year?
The future of a truly great and memorable retail experience lies in the dynamics of the relationship between physical stores and e-commerce via web and mobile. Delivering the right mix of technologies on mobile, online and in-store is the key to giving retailers a deep and more profitable understanding of consumer behaviour and purchasing triggers, through the insights that can be extracted from Big Data.
Understanding your consumers’ paths to purchase and their sensitivity to changes in pricing or in website, application or store design can offer a much clearer understanding of what they want, and don’t want. This knowledge can then be used to deliver the aforementioned personalised in-store experience. Embracing emerging technologies like cloud-based Artificial Intelligence (AI) and the Internet of Things (IoT) means that retailers can make more informed and contextualised decisions, thus delivering exactly what a particular customer wants at the right moment in-store.
AI in retail means more responsive and interactive customer service chatbots, combined with fast and reactive automation of supply chain management. Knowing what the customer wants and delivering exactly those products to them, whether that be on a mobile application, via a website and/or via an in-store visit is the ultimate objective. This technology has the power to transform the High Street experience.
Human interaction is still at the core of many consumers’ shopping experiences. Understanding these cross-channel interactions frequently starts on social media, online or via mobile, concluding with an in-store purchase is what defines a winning retail experience.