As the retail industry changes and competition grows across every channel, retailers are turning to new technologies to move their customer experience forward and maintain relevancy. Now one area specifically is becoming more of a focus for retailers around the globe.

Microsoft recently partnered with Blue Yonder, a JDA company, to survey retailers everywhere on how they are adapting to the rapidly evolving retail market by using new technologies. The findings show as retailers face new challenges in customer loyalty, competition online and changing consumer expectations, they are more committed than ever to investing in technologies like the Cloud and artificial intelligence (AI).

And there’s good reason for retailers to look to AI, machine learning (ML) and automation as they embark on a digital business transformation to stay competitive and relevant.

[msce_cta layout=”image_center” align=”center” linktype=”blue” linkurl=”https://info.microsoft.com/ww-landing-Artificial-Intelligence-in-Retail-Microsoft-eBook.html?lcid=en-us&wt.mc_id=AID723257_QSG_SCL_327863″ linkscreenreadertext=”Read our e-book – AI in Retail: Transforming the Marketplace” linktext=”Read more about AI in Retail: Transforming the Marketplace” ][/msce_cta]

Here are three ways AI can help retailers survive in an unpredictable market:

1. Advancing your customer experience.

Retail is no longer a business centered around products and promotions – it’s all about customer experience. Creating a more positive in-store experience and meeting the expectations of customers and demanding service level agreements is critical for retailers who want to remain competitive and build brand loyalty

Customers can tap into their eCommerce data using AI and machine learning to focus on inventory being sold most in specific locations and stock their store accordingly. In addition, having these powerful technical capabilities empowers retailers to be able to offer and support in-store pickup and same-day deliveries that are now becoming the norm.

AI and machine learning can ensure their inventory is prepared, their distribution centers are in alignment to prioritize the first shipments, and their inventory is moving along the right routes and channels to avoid disruption and get to customers right on-time.

2. Keeping an edge over the competition.

Customers have never had more options than they do in today’s omni-channel marketplace. Retailers are competing with manufacturers, eCommerce companies and their own direct competitors every day. If a customer comes to your store to make a purchase and their product is out-of-stock they will probably be going somewhere else to find it in the future – whether that’s in-store or right from their phone.

Using technology with AI and machine learning, retailers can predict the right levels of inventory and assortments to meet customers’ needs and expectations without risking costly overhead or waste.

Having solutions that tap into AI and machine learning is key. This keeps your technology gaining more awareness over time on your customers and market to continue making more precise calculations, so you can make the best-informed business decisions moving into the future.

These same technologies can ensure that your pricing, promotions and markdowns are aligned with competitor pricing and customer demand without carving unnecessarily into your bottom line.

3. Surviving the undeniable impact of tariffs.

Retailers need to start preparing now for the impact of current and oncoming tariffs. The first round of tariffs started at the beginning of the year with 30-50 percent penalties on washing machines and solar panels. Next, the tariffs expanded to a 25 percent tariff on steel and a 10% tariff on aluminum – challenging businesses in sectors with products from cars to canned goods. Last September, more than 800 categories of tariffs were added.

To-date, tariffs have impacted $250 billion in imported goods, costing individual American households by approximately $167 a year.

Surviving these tariffs while remaining competitive means understanding price changes and their impacts to better predict what your customers are able or willing to absorb. Using the latest in AI, retailers can ensure maximum revenue and customer satisfaction in the face of these new tariffs. By tapping into insights from historical data on customer buying behaviors, competitor pricing, demand levels and other impacts like current events and weather, in real-time, businesses can advance their strategies with exacting predictions.

AI-enabled forecasting tools can keep retailers aware of constant changes in the market by delivering a clear picture of demand in real-time across every channel.

The unmistakable move to AI and Machine Learning

As the industry landscape continues to move forward with changing customer demands and the continuing rise of Amazon, studies show AI, ML and IoT offer retailers more ways to compete.

With the right technology in place, retailers can use their own eCommerce shopper data to identify trends and set the right prices and service levels with confidence – boosting profits, reducing waste and increasing efficiency, every step of the way.

Learn more about the movement at NRF

Learn why retailers like bonprix, Ernstings and Morrisons are using AI-driven technology to remain competitive, manage customer demand and automate pricing decisions. See how and why retailers around the globe are turning to AI to become more competitive.

The post 3 ways AI can help retailers stay relevant appeared first on Microsoft Industry Blogs.

Using data as a competitive advantage

We are living in an age of abundant data. Retailers are flooded with it. They have access to so much and so many varieties of transaction and customer data, it has become a huge task to mine it and convert it into logical and useful insights.

But retailers’ success in driving better customer shopping experiences depends on it. New forms of retail analytics and artificial intelligence hold the key to identifying and enabling opportunities locked away in these data sources. Those who embrace these intelligent technologies will have a significant competitive advantage. IDC reports that by 2017, retail companies that take advantage of their data have the potential to realize an additional $94 billion in revenue over companies that don’t.

Amplifying human ingenuity with intelligent technology

One of the things I’m most excited about is the potential these innovations have to amplify human ingenuity—extending and empowering the capabilities of all those who work in the retail industry.

AI technology is modeled after the human brain—which senses, processes, and acts on information—learning and adapting over time, largely through the identification of patterns in data.

When applied to your data, this intelligent technology can go to work for you and your employees—learning and forming conclusions with imperfect data; interpreting the meaning of data including text, voice and images; and interacting with people in natural ways. 

Creating a connected customer journey

As we look at the types of customer experiences shoppers want, today’s innovations like chatbots, cognitive and machine learning, advanced analytics, and blockchain—combined with connected devices like beacons, machines and headsets—can infuse data and insights wherever they’re needed throughout the customer’s shopping journey.

The result? Digital engagements that are personal, contextual and relevant based on purchase history, demographic information, location, time of day, and other data sources. Here are some examples of what retailers can now do.

• Connect with customers at the right time and in the right place with the right offers by gathering data from various points of customer contact to understand customer behaviors and respond with relevant offers.
• Give sales associates the customer data they need to deliver a personalized in-store experience, and the ability to help customers with mobile POS, assisted selling, clientelling and bot applications on mobile devices.
• Enable engaging, information-rich experiences in store with bots, personalized kiosks, and mobile apps.
• Predict what customers want before they tell you using predictive retail analytics solutions to create relevant cross-sell and upsell opportunities throughout the customer journey.
• Ability to add items to an omni-cart from every digital touchpoint in the shopping journey, and quickly checkout through consumer and sales associate mobile apps.
• Continue to improve, shorten and transform the customer journey based on reinforced learning and personalization & recommendation engines.

Explore the real possibilities of intelligent technology

This video showcases what a connected customer journey can look like when advanced retail analytics and AI technology are applied to the shopping experience. The possibilities are both exciting and real, and leading retailers are already putting them to work to help transform their customer service. Let’s look at a few examples.

Lowe’s demos virtual showroom using cognitive AI and mixed reality

Home improvement retailer Lowe’s teamed up with Microsoft to use cognitive AI and mixed reality to help reinvent visualization and design in a whole new way. With AI capabilities, its HoloLens kitchen design tool can analyze customers’ Pinterest boards to define their personal style, provide recommendations based on the look and feel they want to create, and make more tailored suggestions as trends and preferences evolve. You can learn more here.

Dixons Carphone helps customers find what they want using chatbots

UK-based Dixons Carphone is another retailer tapping into the power of AI technology to deliver personalized shopping experiences across channels. A major European electronics and telecommunication retailer and service provider, it’s using the capabilities of the Microsoft Bot Framework and Microsoft Cognitive Services to build AI into its customer interactions, boosting engagement and empowering its employees. You can learn more about their success story here.

Macy’s uses AI-driven virtual agent to transform customer service

To optimize the shopping experience, Macy’s enhanced its website with a virtual agent based on the Microsoft Dynamics 365 AI solution for customer service. With deep connections to back-end systems, the virtual agent can take action to solve customer issues and transfer customers seamlessly to a live agent if necessary. The virtual agent is already answering more than one quarter of customer queries. Hear their story.

To learn more about advanced retail analytics for customer experiences, check out this eBook, and go here to explore AI products and solutions that are available today. We look forward to helping put your data to work for you to transform the customer journey.

And if you’re attending Future Decoded, I will be talking more about this on October 31 at 11:30 a.m. Join us!

LinkedIn: ShiSh Shridhar
Twitter: @5h15h

The post Transform the customer journey with retail analytics and AI technology appeared first on Microsoft Industry Blogs.

Brand loyalty remains the holy grail for many retailers. From clothing to electronics, devotedly loyal customers are the driving force behind some of the world’s top brands. With increasing competition from e-commerce, the value of a loyal customer is higher than ever, especially when you consider that customer acquisition costs at least six times as much as customer retention. One tool that companies have traditionally used to drive up customer retention is the loyalty program. The problem is, loyalty programs are not working like they used to.

That’s because most loyalty programs look more or less the same. We’ve come a long way since paper punch cards. But most retailers still use swipe cards and phone numbers to distribute discounts, giving customers a similar deal and a similar experience as the store up the street. Just giving out price promotions alone doesn’t inspire loyalty—especially when everyone is doing it. The proof? Most customers don’t even use their loyalty programs. The average American household is enrolled in 29 loyalty programs, but they are only active in 12. Customers might forget they are enrolled or block bulk emails when they get tired of mass marketing.

21^st century loyalty

Modern loyalty programs that really make customers stick require some creativity. It’s not enough to provide price incentives—it’s about providing the right incentives, at the right time, in the right way. If you play your cards right, your loyalty program can cultivate customer relationships and build your brand in innovative ways. Let’s take a look at some key differentiators of stand-out loyalty programs.

Engaging customers on their phones

Americans spend an average of 4.7 hours on their phones every day. Why work on getting loyalty cards into more customers’ wallets when you can utilize the smartphone that’s already in their hands? Fun browsing interfaces and interactive games are creative ways to engage customers and stand out from the crowd—which is more than can be said for a basic loyalty card. Plus, mobile chat bots can make shopping quicker and easier—making it easy to place an order for in-store pickup for example. Getting in the game with a mobile presence gives you more chances to engage customers, collect valuable data on trends, and gather customer feedback.

Offering personalized deals

The insights gleaned from mobile touchpoints fuel another vital tool for building loyalty— personalization. Surveys show that 78 percent of consumers are more likely to be repeat customers if they receive relevant, personalized offers. That’s because giving a customer bargains on things they really want instead of blanket discounts makes them much more inclined to come back for more. Using data from digital channels and stores, you can offer promotions based on what a customer prefers instead of how often they purchase. When you give a fishing buff a great deal on waders instead of running shorts, he’ll be more likely to recommend you to his friends.

Adapting to changing conditions in real-time

Historical data can help you personalize offers to customer preferences. But external conditions like weather, traffic, events, and location also affect purchasing patterns. By harnessing this real-time data, you can make sure the right offers not only go to the right people, but they go out at the right time. For example, think of a restaurant that targets some customer groups with deals for sundaes and others with deals for cheeseburgers, based on past preferences. But if a heat wave comes, past preferences aren’t as relevant—when it’s hot, sundaes bring in the most business. Tracking weather data allows the restaurant to understand the change in demand and adapt the offer, maximizing revenue and customer satisfaction.

Retail Personalization from Microsoft and Plexure

Looking for the right tools to take your loyalty program to the next level? Look no further than Plexure, a Microsoft partner and long-time retail innovator. Plexure’s Retail Personalization solution delivers granular personalization that adapts to real-time conditions using multi-world testing (MWT) technology. It not only optimizes customer engagement on mobile devices, but reaches customers with personalized content online and in-store as well. As a true omni-channel solution, it converges mobile data with data from all other sources to give you cross-channel insights.

Retail Personalization has a proven track record of boosting loyalty and revenue for leading brands. Using Plexure’s platform, a global quick-service restaurant upgraded its mobile loyalty program to deliver highly targeted offers and rewards based on historical and live data. By recommending premium meal options to people that usually purchased everyday value items, and encouraging customers to visit at times of the day they didn’t usually visit, the program increased average check for loyal customers by 38 percent and average frequency of visits by 16 percent. Ultimately, the number of loyal customers that visited at least three times a month increased 10 percent year over year, leading to more than $5 million in incremental revenue for the company.

Finally, Plexure makes it easy to manage your loyalty program internally. Plexure’s loyalty module gives you one tool to manage loyalty rewards, points, and incentives across multiple programs in multiple channels. Plexure also provides intuitive dashboards for tracking data and ROI, so you can continually refine your processes.

Try it yourself

Want to learn more about Retail Personalization? Check out the solution on Microsoft AppSource today.

LinkedIn: ShiSh Shridhar

Twitter: @5h15h

The post Put punch cards in the past: how to create 21st century loyalty appeared first on Microsoft Industry Blogs.

As a retail data specialist, this was an exciting event. The focus was on intelligence and the opportunities and insights that can now be achieved through data and information. In support of this vision, Microsoft announced a number of new tools and services to help developers modernize existing apps and build more intelligent ones, on every platform, for every platform.

Here are the top six things tech developers in the retail, consumer goods and hospitality industries won’t want to miss from Microsoft Build 2017.

Azure Cosmos DB: The industry’s first globally-distributed, multi-model database service

Introduced at Build, Azure Cosmos DB is built from the ground up to power planet-scale cloud services and data-intensive applications—from IoT to AI to mobile—with incredible performance, fault tolerance and support for every type of data, including graph. It is the industry’s first globally distributed, multimodel database service to deliver horizontal scale with guaranteed uptime, throughput, consistency and single-digit millisecond latency at the 99th percentile. As a universal backend for various kinds of databases, retailers and brands can start doing some really interesting things with internal, external and IoT data. You can learn more here.

Microsoft Azure IoT Edge: Take your IoT solutions to the next level

Microsoft Azure IoT Edge is an exciting new service that extends cloud intelligence to edge devices. This has incredible value for retailers and brands, enabling your in-store and on-property IoT devices to run cloud services, process data in near real-time, and communicate with sensors and other devices connected to them, even with intermittent cloud connectivity. By enabling processing, analytics and action to happen closer to the source of the data, Azure IoT Edge empowers you to make faster and smarter decisions, while reducing bandwidth costs by sending only critical information to the cloud for further analysis. This helpful blog talks more about the new capabilities.

Conversational Commerce: New channels, new ways to make great bots

As I shared recently, significant advancements in AI and machine learning are opening new doors to make conversational commerce a truly relevant platform, one that’s valuable for both consumers and brands. At Build, we announced numerous updates to Microsoft’s Bot Framework designed to help developers make great conversationalists. One key feature for retailers and brands is the new channels available to increase your bot’s reach, including the ability for consumers to discover and chat with your bot directly in the Bing search result page.

Another important capability you’ll want to check out is the Payment Request API that can provide fast, easy checkout experiences. With online shopping cart abandonment rates currently sitting above 60 percent across the web, we’re looking to this API to reduce friction during the checkout process. You can learn more about these and additional bot innovations currently being tested here.

Microsoft Cognitive Services: Bringing AI to every developer

We now offer 29 Cognitive Services, giving developers a wealth of options for incorporating off-the-shelf and custom AI capabilities with just a few lines of code. With Microsoft Cognitive Services, developers can build apps that recognize gestures, translate text in multiple languages, deconstruct video for quicker search, editing and real-time captioning, and even customize data to recognize images in categories most important to customers. We also showed how developers can custom train this set of services without needing to design their own deep learning models. Read more.

Microsoft Cognitive Services Labs: Making applications more intelligent

We also launched Microsoft’s Cognitive Services Labs, which allows developers to take part in the research community’s quest to better understand the future of AI. One of the first AI services available via our Labs is Project Prague, a gesture API that creates more intuitive and natural experiences by allowing users to control and interact through gestures. This will have great relevance for in-store and on-property digital signage and for controlling connected hotel rooms.

Another really interesting Cognitive Services API is Project Johannesburg for transportation and logistics. It enables truck routing by taking into consideration additional information such as the height or the weight-class of a bridge or the gradient of a road; they need to avoid sharp turns, grounding risks due to the long wheel stand, and minimize crosswinds. Trucks that transport hazardous material have additional restrictions and may require permits. These requirements and other characteristics like it that are specific for large vehicles, require special data attributes and algorithms that are implemented in Project Johannesburg.

Windows 10 Fall Creators Update: Tools for traveling through a new reality

Microsoft also shared the next wave of Windows 10 innovations built to empower the creator in all of us—the Windows 10 Fall Creators Update. An exciting component for retailers and brands is the world’s first Windows Mixed Reality motion controllers with no markers required. A customer who pairs a Windows Mixed Reality headset with motion controllers will have a rich and immersive experience across creativity tools, productivity, games, and entertainment. The motion controllers offer precise and responsive tracking of movement in your field of view using the sensors in a Windows Mixed Reality headset. There is no need to install hardware on the walls around you.

Building the future

You can see and learn more about these opportunities by watching the event’s on-demand keynote videos and checking out all the news here. We look forward to hearing what you think! Feel free to share your comments with us on Twitter at @msretail.

LinkedIn: ShiSh Shridhar

Twitter: @5h15h

The post The 6 things retailers won’t want to miss from Microsoft Build appeared first on Microsoft Industry Blogs.

To reduce missed revenue opportunities, retailers and CPG companies must ensure the right products are in every store or outlet. This means taking a hard look at the way inventory is managed and making targeted improvements. Most companies have a SKU management strategy – but because they make decisions on a regional level, they miss store-specific details and make over-generalized inventory plans. Let’s look at a few strategies for SKU management that enable companies to make the most of their inventory:

Make faster adjustments to improve performance using granular, real-time insight

Advanced analytics and cloud technology are enabling retailers to visualize inventory data they have always had – seeing data in a new way opens the door to new operational insights. For example, breaking data down to SKU or attribute levels helps clarify the impact of each SKU on sales. Accessing data more quickly also makes a difference. Analytics technologies, powered by the cloud, can mine the latest sales and inventory data to surface actionable insights rapidly, replacing static sales spreadsheets. Rather than receiving monthly sales data and making inventory predictions based on point-in-time information, data can be available for sales teams to review data on a weekly – or even daily – basis.

With a visual analysis of SKU performance, executives and analytics teams are empowered to justify changes to the product portfolio. This analysis helps retailers understand trends and make more informed inventory and purchasing decisions. Likewise, these insights enable CPG companies to identify top performers, prioritize low-distribution products, and retire the right products.

Fine-tune inventory and purchasing decisions with a deeper understanding of trends

Cloud technology and advanced analytics can also take store and SKU sales data, and recommend products to add or remove from distribution to increase revenue.

For example, an apparel retailer could leverage the insight that floral print dresses are popular in a city’s downtown stores, while striped patterns are selling better in the suburban areas, to make better stocking decisions for those stores. Acting on these insights guarantees the most popular products will be on the racks, and losses due to out-of-stock and overstocked items will diminish.

Connecting granular insights to intelligent and automated analysis processes enables more accurate and efficient decision-making. Having access to company and industry sales insights improves buyers’ abilities to purchase the right amount of product and ensure it is distributed properly across outlets. Third-party data helps monitor trends in each location and determine external variables that may be affecting sales. Insights like these give companies a comprehensive view of the market and enable them to make better stocking decisions for upcoming sales seasons.

Expand access to analytical insights by leveraging a world-class platform

A data management platform with powerful analytics capabilities is essential for a modern SKU management strategy. Without a method to tap into potential organizational gold mines and find new ways to increase profits, SKU data isn’t going as far as it should be.

Managing SKU data on a world-class cloud platform gives companies a scalable solution for generating insights. Transforming data into predictive models provides insights that can be shared across teams using the cloud. With a cloud-based solution, companies can enable anywhere, anytime access to these insights, eliminating a key barrier that can come with on-premises systems. Access to real-time information also enables teams to collaborate more effectively and make informed decisions, reducing lost opportunities and improving the chances of increasing revenue.

A new way to improve your SKU management approach from Neal Analytics

Increase sales and profitability with the Neal Analytics Inventory Optimization solution, built on Microsoft Cloud technology. The solution enables firms to determine the best-performing SKUs in each market, making it easier to optimize product placement and capture additional demand. The Inventory Optimization solution also reduces production and supply chain complexity by analyzing data to identify undersold, unprofitable, winning, and core SKUs. Analysis results enable retail and CPG teams to stock the right SKUs, justify changes to the product portfolio, and have confidence that new SKU decisions will contribute to increased sales and revenue.

Interested in learning more? Try the Neal Analytics Inventory Optimization solution built on Microsoft Cloud technology on Microsoft AppSource today.

LinkedIn: ShiSh Shridhar

Twitter: @5h15h

[1] IHL Group, We Lost Australia! Retail’s $1.1 Trillion Inventory Distortion Problem, June 2015.

The post 3 SKU management strategies to make the most of your inventory appeared first on Microsoft Industry Blogs.

As technology advances at a breakneck speed, retailers must quickly evolve sales approaches to keep pace with changing customer behaviors and expectations. Now, instead of solely interacting with salespeople through an in-person or telephone engagement during business hours, customers have the option to bypass salespeople and operate on a completely self-service basis. With the growth of 24/7 digital browsing and buying through smartphones, wearables, tablets and more, customers have come to expect a personalized, on-demand shopping experience every time. For example, many customers who interact with a salesperson in a brick-and-mortar environment are now expecting the same tailored service that online storefronts deliver. As a result, retailers face increasing pressure to deliver a seamless, consistent and tailored experience across every channel. Those that don’t are at risk of lower customer satisfaction, missed sales opportunities and long-term revenue decline.

Opportunities in customer data

As changing behaviors create greater pressure, the opportunity to thrive in the modern retail era is also evolving. Highly successful retailers are finding that one thing matters more than ever: unlocking the power of data, a largely untapped resource.

In the past, retail organizations retained customer data merely as a record of sale. However, when mined and correlated across data sources, both internal and external, customer data becomes much more than a simple transaction – it becomes impactful.

With no shortage of sources to draw data from – CRM systems which integrate marketing and sales campaigns, loyalty programs and in-store and online customer transactions – the potential for deriving insights through advanced analytics is vast. By mining information from these (and other) sources, firms build a more complete picture of each customer, and can better anticipate customers’ wants and needs. Once that information is available to your sales teams and marketing engines, you’re equipped to provide more tailored customer engagements that drive greater sales.

We’ll explore each of these possibilities in the following sections.

Personalize promotions and experiences

73% of consumers prefer to do business with brands that use personal information to make their shopping experiences more relevant (Digital Trends).

The message for retailers today is clear: personalization is king. In the past, if you wanted to purchase a product, you had to physically go to a brick-and-mortar retail location. The shopkeeper would see what you bought – week after week, month after month – slowly accumulating a basic knowledge of you as a customer. If the shopkeeper were really keen to drive sales, he would take more than just a mental note of your purchasing trends and personalize his sales approach – promoting items specific to your interests. Today, anywhere, anytime commerce is the norm and data is the new shopkeeper. Browsed online for a crochet hook? Guess who just stocked yarn.

Advances in technology and analytics present retailers with the opportunity to draw deep insight from their data. Understanding your customers on an individual level unlocks a host of new, powerful sales tactics to supplement the modern retailer’s toolkit.

Using customer metadata, QR codes scans, and Wi-Fi check-ins enables your organization to push location-specific coupons, offers, and information to customers. You can even use real-time location data triggered by external sources such as weather forecasts, sporting events, or even customer proximity to your store, to push relevant content to customers. Similarly, you can equip sales teams with a view of a customer’s history and preferences, enabling relevant, individualized engagement – for instance, directing a customer to a relevant promotion. With this technology, you don’t have to solely rely on a salesperson’s memory to delight your customers and meet your sales goals.

Anticipate customer demand with predictive analytics

Average Days Inventory Outstanding (DIO) raised approximately 8.3% from 2009-2014 (REL vis scdigest).

The most highly-personalized marketing won’t do you any good if the customer arrives in store and an item they are interested in is out of stock. Issues like overstock and out-of-stocks point to a disconnect between sales capacity and inventory management process. Stocking issues can have serious consequences – inhibiting the sales cycle or creating unnecessary costs.

Close the gap and cut down on inventory inefficiencies by using data to augment inventory management processes. Predictive analytics algorithms can help you make predictions about customer buying patterns in a particular area and prepare for spikes or lulls in sales performance. The ability to dynamically adjust your inventory allows you to ensure stock levels match consumer demand and cut down on inefficiencies.

For example, imagine that the weather forecast predicts a heatwave through your town. By analyzing historical consumer buying patterns, you find that you typically triple the sales revenue of popsicles when the heat surpasses 98 degrees. In response to these two data insights, you automatically trigger an increase in your popsicle order, quickly tripling your stock and your sales during the following two weeks. This kind of predictive analytics involves pulling in data and analyzing data from a host of sources, including weather applications, social media, and historical sales data.

Connect your sales team to data–and to customers

78% of 18 to 34-year-old consumers expect a customer service agent to know their contact and product information, as well as service history when they contact a brand for assisted service. (Global State of Customer Service Report 2016).

One of the greatest advantages of today’s data analytics capabilities is that they can free up your team, enabling them to direct their attention and creativity towards more strategic activities, like forging connections with customers.

Brand loyalty hinges on the interaction between the customer and your sales and customer service teams. Empowering your workforce by providing critical customer information is an important step towards building trust and delivering an excellent experience.

The ability to look into a buyer’s history—to see email communications, call logs, online purchases, previous store visits, and more—all in a single, unified view, provides sales employees a far greater understanding of each customer and their individual needs. It also gives the customer a consistent experience across your digital and physical storefront. With cloud-enabled sharing apps, this data can be provided to sales reps in real-time, and even on the go.

Imagine the potential this has for customer interactions: instead of pestering the customer by repeating the same questions each visit (i.e. What size are you looking for? Do you want to open a rewards account with us today? What’s your home zip code?), sales reps can confidently engage customers and deliver seamless experiences.

Taking the first step

Despite the opportunity that modern, cloud-driven data analytics holds for retailers, many organizations remain hesitant to take the first steps towards using it, often citing expense, lack of control, or security compliance as their top concerns. But the truth is, many of these concerns have been addressed— technologies such as analytics engines, cloud-based apps, and cloud storage have advanced to the point that these fears can be put to rest.

Microsoft’s advanced analytics solutions offer a scalable, cost-effective, and familiar approach to data analytics for both cloud-based and hybrid environments, without compromising security. With years of experience developing solutions specifically designed for the retail industry, we’re positioned to help your organization capture the power of data.

To find out more about our retail solutions and learn more about how to start transforming your business with data, visit our digital retail hub to explore products and solutions to help you at every step of the way. You can also learn more about the next generation of Microsoft’s data platform announced at this week’s Microsoft Data Amp event and re-watch the live event and keynote on-demand here.

LinkedIn: ShiSh Shridhar

Twitter: @5h15h

The post How using data to personalize and anticipate can supercharge a retailer’s sales productivity appeared first on Microsoft Industry Blogs.

The problem is not that retailers don’t know about the power of personalization – 96% of retailers acknowledge that it influences what consumers purchase in some way,[i] and close to the same number say that personalization is a strategic focus for them.[ii] Yet customers are not feeling the love – one-third of consumers wish their shopping experience was more personalized than it is.[iii] So where does the disconnect between strategy and execution come from?

Simply put, implementing a personalization program and getting it right is difficult. For instance, it can be easy to mistake segmentation for personalization. These days, tailoring offers and services based on a customer’s age bracket and other demographic information isn’t enough. As another example, retailers can easily go overboard by contacting their customers too frequently or in the wrong way. If you blast content to a customer every day with the same offerings, you risk driving them away.

When trying to execute on retail personalization goals, there are three common mistakes that many retailers make:

• They don’t act on all of their data
• They don’t ever reevaluate their marketing approach
• They don’t take full advantage of the technology available to them

Below we will explore these mistakes and what strategies retailers can employ to avoid them.

Mistake 1: Retailers don’t act on all of their data

The first error many retailers make is that they capture and act on basic demographic data but don’t combine it with other potential data sets. The problem is not that retailers don’t have or can’t get data from customers – in fact, people want to engage and will share their data with retailers if it will improve their experience. Nearly half of consumers say they are receptive to having trusted brands track their data in return for personalization.[iv]

The most sophisticated retailers are able to layer all of the data they receive, combine it with other sources, and use analytics to predict behavior or provide personalized offers. These advanced analytics can mean extra work up front, but can bring huge rewards. Layering data from weather, trend forecasts, and multiple sales channels can let you target customers effectively – in some cases boosting purchase frequencies by 18% and resulting in a 25% larger average check. For instance, retailers can tell that this year they should recommend polarized sunglasses frames to a customer as soon as temperatures rise in the spring, since the customer purchases a set of frames just about every June.

Another key is to use analytics insights to help customers discover new products inspired by their unique history and preferences. It’s not useful to recommend what customers already buy – retailers see the biggest returns by encouraging customers to change their behavior and try new things.

And these recommendations are what customers want – 92% of consumers surveyed by Infosys look to discover new products[v] and half of them are more likely to return to and purchase from a website that makes recommendations.[vi] By directing them to products that they are interested in, customers see that retailers care about their time and are listening to their preferences. With personalized recommendations, you are giving them “guided serendipity”[vii] in their shopping experience. Clearly, simple if-then rules for offer personalization are not enough – customers expect sophisticated experiences that change with their needs and that are refined every time they shop.

Mistake 2: Retailers don’t reevaluate their marketing approach

Even if retailers build offers around sophisticated data analysis, many set up rules and logic at the beginning of their process and assume they can leave them. Personalization is not a set-and-forget process – customers’ desires are constantly changing, and retailers need to keep up.

However, this is a difficult task. Only 12% of retail executives in a Microsoft survey said that their companies are extremely effective at using analytics to personalize promotions for specific customers.[viii] It’s key to remember that rules are a good start, but your strategy needs to be built on more than that. One solution is to constantly evaluate and adjust ads, content, and data collection methods, testing frequently with A/B platforms to see where small changes can lead to big returns.

Personalization returns carry far past shopping carts and order confirmations into email outreach, offers, and incentives, enabled by customer data. By constantly reconsidering their personalization strategy, retailers can reach their customers in a unique way. The ultimate way to differentiate is to embrace new technologies that can provide a dynamic shopping experience upon click-through.

Mistake 3: Retailers don’t take full advantage of the technology available to them

Implementing the latest technologies is one of the best ways that retailers can show they care about their customers’ experience. New technology can help drive better outcomes for your customers, such as providing better service or an intuitive return process.

Real-time insights and machine learning are two of the easiest and most important technologies retailers can use. These allow retailers to track patterns of shopper engagement to predict new behaviors and offer more dynamic and personalized service every time they visit a website.[ix]

Another way to stand out is to provide great customer service across channels. This might involve using technologies like chatbots to bridge the service gap between digital and physical stores or enabling customers to see in real life what they were browsing online. Taking things a step further, some innovators are incorporating IoT and virtual and mixed reality into their store experiences. For example, in-store beacons can detect what customers looked up online and reflect related offers on digital signs.

It’s clear that there’s a lot retailers can do to improve their personalization approach and boost customer engagement – and that’s where a personalization solution comes in.

Plexure can help

Doing retail personalization the right way is difficult, but Plexure delivers the tools to make it possible. The Plexure platform uses cloud analytics to combine static and temporal data to uncover trends. The Plexure Analytics Engine and Power BI dashboards help surface key metrics such as campaign performance to support continual process improvement. Plexure’s solution helps retailers optimize customer engagement and loyalty and increases revenue and ROI, bridging the gap between digital and physical stores once and for all.

Try it yourself

Want to learn more about Retail Personalization? Try the solution for yourself at www.AppSource.com today.

LinkedIn: ShiSh Shridhar

Twitter: @5h15h

[i] https://www.infosys.com/newsroom/press-releases/Documents/genome-research-report.pdf

[ii] http://www.chainstoreage.com/article/study-retail-personalization-efforts-not-connecting-shoppers

[iii] https://www.infosys.com/newsroom/press-releases/Documents/genome-research-report.pdf

[iv] http://www.digitaltrends.com/social-media/why-consumers-are-increasingly-willing-to-trade-data-for-personalization/#ixzz2g8dgrqko

[v] https://www.infosys.com/newsroom/press-releases/Documents/genome-research-report.pdf

[vi] http://cdn2.hubspot.net/hubfs/497568/Ebooks_(new)/The_Foundations_of_Personalization-1.pdf?t=1477736478014

[vii] http://www.retailtouchpoints.com/features/special-reports/retailers-seek-innovation-in-personalization

[viii] Retail Insights, Microsoft, 2015

[ix] Kibo 8 Mistakes, 2016

The post Three Common Mistakes in Retail Personalization appeared first on Microsoft Industry Blogs.

When just 20% of SKUs drive the vast majority of a retailer’s sales, it means there is a lot of room for improvement, as the vast majority of SKU’s are doing very little to contribute to topline results. Inventory is the largest investment for many retailers and CPG companies, yet inventory management is a perennial challenge. Retailers are spending a lot upfront to purchase inventory that is ultimately driving little revenue. To make matters worse, 70% of retailers say that their inventory practices are below market average.[ii] To address the disparity between upfront cost and revenue, retailers and CPGs could benefit from a more robust, data-driven approach to SKU decisions.

If retailers can reallocate or distribute their currently underperforming SKUs, they can dramatically increase their revenue to capture what was once a lost market share.

Unfortunately, forecasting and SKU selection is a multi-faceted problem, and the challenges that make it difficult exist at many levels. Sales data that is not granular enough, combined with inflexible analytics systems, often leads to poor forecasting that fails to ensure correct products are on the shelves at all times.

Let’s consider some of the pain points that teams face when managing inventory:

Sales data is too high-level and too outdated

Currently, many companies are conducting quarterly or even annual SKU analysis at a regional level. Whether they believe that this is sufficient to understand SKU trends, or simply lack the resources to take a more granular approach, retailers and CPG companies are operating with an incomplete understanding of their SKU performance.

Imprecise data affects everyone. Sales data is often outdated by the time it reaches sales directors. In-store field sellers are recommending products based on macro sales data and have no ability to see SKU-by-SKU or store-by-store performance. Without this, sellers cannot optimize portfolios and make sure the right products are on the shelves and racks. Worse still, retailers have shelf and rack space devoted to products that aren’t earning their keep, while products that fit better are stuck in a warehouse.

Data is difficult to turn into insights

Even if companies have mountains of granular sales and SKU data at their disposal, they often lack the tools to interpret that data and turn it into action: 44% of CPG firms don’t have adequate resources to interpret analytics outputs.[iii] If data is difficult to access or cannot be explained correctly, merchandising directors will not be successful in predicting sales, managing products, or directing marketing and sales efforts.

Why is the interpretation of data so difficult? Existing reporting systems have limited ability to visually represent the complex connection between sales data and external variables. Without dashboards to help make sense of what’s going on, teams are stuck digging through mountains of data for important insights.

Forecasting is unreliable

Lack of insights results in forecasting models that cannot not accurately track changing customer preferences. It’s critical to have access to near real-time data during forecasting to make decisions using the most recent information available. In one survey of apparel retailers, 55% were able to capture a demand trend in under five weeks, while 44% responded to a demand trend at a painstakingly slow rate of six weeks or more, causing seasonal issues with stocking[iv]. Overstocked products are wasteful and expensive, while understocked products frustrate customers and result in lost sales opportunities. Retailers and CPG companies need to know what to expect so they can make the right decisions about where to allocate their resources and budget. And the best way to do that is to implement an inventory optimization solution that takes advantage of the power and scalability of the cloud and advanced analytics.

But retailers can solve for these constraints

The increased efficiency of a single, end-to-end solution helps key roles such as analytics directors and COOs drive revenue and optimize inventory across the organization. Flexible inventory management solutions can scale and integrate with all aspects of a business, enabling tracking and dissemination of granular data at frequent intervals. Specialized dashboards help merchandising directors understand the relationship between multiple business processes and sellers identify and address high-priority improvement opportunities. Equipping sellers with mobile views enables them to recommend specific products for customers based on trends and data from similar stores.

With barriers to SKU optimization resolved, all team members will be able to help drive increases in revenue and sales, optimizing portfolios every step of the way and choosing the right SKUs for every store or outlet. Capturing and inputting this sales data into reliable forecasts gives teams more confidence they are making effective stocking choices. Finally, using the advanced analytics provided by a single, end-to-end inventory management solution ensures that new insights can occur with every sales cycle.

A new way to maximize your profit from every SKU

Neal Analytics, a leading Microsoft partner, has developed an inventory optimization solution on the Microsoft Cloud. It helps increase sales and profitability by determining the best performing SKUs in each market, optimizing product placement, and capturing product demand. The solution reduces production and supply chain complexity for retailers and consumer goods companies and can identify (among those 80% of marginally beneficial SKUs) which are underperforming products to cut out and which can be top performers in need of more attention.

Try the Inventory Optimization solution on Microsoft’s AppSource. Neal Analytics’ Inventory Optimization is a part of Microsoft’s cloud solution portfolio for the retail and CPG industries, including AFS Retail Execution, AFS POP Retail Execution, Plexure Retail Personalization, and Dynamics 365.

[i] http://www.nealanalytics.com/10-signs-you-have-too-many-skus/

[ii] http://apparel.edgl.com/reports/Inventory-Optimization–Retail-Strategies-for-Eliminating-Stock-Outs-and-Over-Stocks64377

[iii] EKN 2016

[iv] http://apparel.edgl.com/reports/Inventory-Optimization–Retail-Strategies-for-Eliminating-Stock-Outs-and-Over-Stocks64377

The post Overrule the Pareto Principle: How to improve portfolio profitability with Inventory Optimization appeared first on Microsoft Industry Blogs.

Well, the retail space is making more science fiction come to life with their adoption of holograms and fully immersive virtual stores and experiences. Imagine if consumers could see, hear, and feel the presence of the experiences and goods you are selling—without leaving the comfort of their couch. Mixed and virtual reality devices are bringing customers’ imaginations to life—and transforming how companies personalize their products, bridge the gap between their online and physical storefronts, and acquire deep customer insights.

Delight customers with new powers of personalization

In today’s increasingly digital landscape, customization is key. With online, mobile and social channels, it’s never been easier for consumers to explore the array of competitive choices; making it more important than ever to drive customer loyalty. Personalization is one way for retailers to better attract and, more importantly, retain consumers. Surveys show that 78% of consumers are more likely to be repeat customers if they receive relevant, personalized offers[1]. Mixed and virtual reality represent more than just cutting-edge technology that consumers are increasingly interested in—they provide a powerful new path for personalization.

Lowe’s has a long history of helping people reinvent spaces, and with the power of holograms and mixed reality, the company is revolutionizing the remodel design process. From within a simple, skeletal showroom kitchenette, Lowe’s customers personalize a life-like holographic representation of a completely new kitchen. Large items like cabinets, appliances and countertops are represented in the proper size and scale, with incredibly high-definition features and detailed finishes. Customers can adjust colors, finishes and other options instantly, then save and share their designs online. The reactions have been pure delight.

Lowe’s is just one company that is already embracing this new technology. Legendary Pictures is making it possible for fans to interact with and share holograms of their favorite characters. Volvo is radically altering the car-buying experience, enabling customers to personalize the exact car they want—even open up a car to inspect the chassis or watch the drivetrain in action. And the NFL is bringing football to life beyond the television screen, empowering fans to experience games that play across whole rooms and providing new ways to interact with the brand. Embracing virtual and mixed reality is a great way for retailers to personalize customer experiences, expand their brand, and delight customers.

Expand your presence into new realities and reach new customers

Mixed and virtual reality devices are an extremely low-cost way to bridge the gap between physical and digital storefronts, reach new people, and provide a personalized shopping experience regardless of location. Taking up precious floor space with physical show rooms is very costly, but with HoloLens, Lowe’s only ever needs one small area to show customers infinite options—that they can personalize on the spot. Similarly, IKEA can pop-up an empty showroom and let customers customize the space with limitless furniture combinations. As these mixed reality devices become more pervasive, retailers won’t even need the showroom—customers will engage with their favorite brands at home, in a storefront tailored to their tastes and stocked with their preferred products.

Singles Day, a primarily Chinese shopping holiday, has quickly become an annual retail event that is impossible for global brands to ignore. This year, Singles Day saw $17.8 billion in sales—more than Black Friday and Cyber Monday’s combined $13.5 billion[2]. Virtual and mixed reality devices offer a new way to boost sales and cost-effectively expand to new markets. This year, Macy’s participated in its first ever Singles Day by creating a virtual copy of their famed New York Flagship store that Chinese customers could stroll through and shop in. Today, any retailer can make their physical store, or a version personalized for the consumer, available to customers anytime, anywhere.

Leverage deep customer insights to reach new heights of personalization

Mixed and virtual reality provide new opportunities for a greater level of customer insights than ever before. For example, the Lowe’s HoloLens kitchen design tool analyzes a customer’s Pinterest board and defines their personal style before they even get started. By starting with product and design recommendations based on the look and feel they want to create. Then, Lowe’s captures real-time feedback as customers use the mixed reality device, utilizing deep insights to further tailor recommendations to their customers and understand the trends and preferences involved. Using telemetry data from HoloLens, Lowe’s is able to see what items in the holographic kitchen customers are looking at, generate heat maps of customer focus, and conduct sentiment analysis from captured verbal feedback to determine how customers really feel about products.

Virtual and mixed reality devices can provide deeper levels of customer insights than ever before, enabling retailers to see precisely what draws consumers’ eyes to digital storefronts and products. Aggregating this data and combining it with other consumer information is key to creating the powerful personalization required to keep up in today’s increasingly competitive, digital, and demanding retail landscape. Virtual and mixed reality offer an exciting new way to delight customers, boost sales, and become a more data-driven organization.

Retail Personalization from Microsoft and Plexure

While new devices like HoloLens are just starting to permeate the retail industry, solutions built on more mature technologies are widely being used to deliver deep retail personalization. Plexure’s Retail Personalization solution, built on the Microsoft Cloud, transforms the acquisition and retention of customers with tailored, persuasive experiences. Personalized onboarding programs drive quick customer activation, increasing visit frequency and spend in the initial weeks. Custom loyalty solutions provide powerful, personal incentives to boost the number of return visits and dramatically reduce churn across a retailer’s customer base. And the solution’s personalized engagement capabilities enable companies to create highly tailored customer experiences. These personal experiences influence customers to adopt new behaviors and vastly improve the lifetime value of any retailer’s customer base.

Try it yourself

Want to learn more about Retail Personalization? Try the solution for yourself on AppSource today.

LinkedIn: ShiSh Shridhar

Twitter: @5h15h

[1] Infosys, 2013

[2] http://qz.com/835171/singles-day-virtual-reality-lets-chinese-customers-shop-macys-famed-new-york-store/

The post Embracing New Realities in Retail appeared first on Microsoft Industry Blogs.

Imagine you are planning to buy a pair of shoes, or try a new restaurant. You might do some research online, compare prices among competitors, consult reviews, or engage your social network for references. You probably add new brands to the list of contenders before narrowing it down and finally making a purchase. Thanks to online and mobile channels, the customer journey is increasingly complex. From a retailer’s point of view, it can be a long, unstructured process, with no guarantee of a purchase at the end.

That’s where customer journey mapping comes in. Using research about customer behavior patterns, companies are trying to understand the winding roads customers may take between consideration and purchase. Once retailers understand the steps and touchpoints in that progression, they can strategize on how to shape the journey that satisfies the customer, accelerates their path to purchase, and drives loyalty along the way. To stay on the leading edge, retailers need to actively guide their customers through a journey that is mutually beneficial for both parties.
 

How to forge a better path

The first step to improving the customer journey is digitization. Consider how much easier it is to research a product online, use an app to deposit a check, or make a purchase with the click of a button. Digitizing as many touchpoints as possible makes the customer journey quicker, simpler, and more likely to end in a sale. Digital improvements like adaptive displays can enhance the in-store experience as well, so it’s important to create seamless omnichannel engagement across mobile, online, and in-store channels.

Another key to enhancing the journey is to leverage data to anticipate customer desires. The Oakland-based solar panel retailer Sungevity collected customer data over time in order to identify common needs. They discovered that their customers want to see personalized energy savings projections, have conversations with sales reps, and get references from other customers. So the company provides all of those services not just when asked—but proactively, in a logical order, at the click of a button. Making the journey painless for the consumer encourages them to make their final purchase with you instead of a competitor.

Finally, make the journey as compelling as possible by personalizing engagement at every touchpoint. By collecting public data, customer history, and even live data like weather and time of day, you can generate a recommendation tailored to a particular customer that moves them forward in their journey. The more relevant the recommendation, the more likely it is to end in a purchase and drive retention in the long term. According to Gartner, organizations that incorporate personalization into digital commerce will increase revenue up to 15 percent by 2018. But personalization is not just for digital channels—IoT technology can bring personalized push notifications and adaptive displays to physical stores as well.

[inlinequote]Marketers that deliver personalized experiences are getting double digit returns in marketing performance.[/inlinequote]

Retail Personalization from Plexure

The Retail Personalization solution from Plexure helps companies orchestrate a tailored, proactive customer journey. Using data and analytics, the solution gives retailers the ability to make the correct inferences about customer preferences and automatically prescribe personalized recommendations. Marketers can decide which offers to drive under certain conditions and engage customers with personalized content across mobile, online, and in-store channels. Plexure’s technology also adapts recommendations to real-time conditions like weather, time of day, and local events.

McDonald’s used Plexure’s solution to drive more than a million app downloads in a week. In its journey mapping process, McDonald’s determined that shortening transaction time could increase customer satisfaction and loyalty. So the company used their app to streamline the browsing, ordering, and payment process. They used beacon technology to reach nearby app users with a customized menu and offers based on their past purchases, weather, and time of day. The improved journey was not only valuable for the customer, but it allowed McDonald’s to collect information like real-time store traffic, item popularity at each store at different times of day, and the effectiveness of promotions. With these insights, the company can better target their offers and plan inventory.

Try it yourself

A digital-first, proactive, personalized experience is key to putting your customer on a journey that leads to a successful purchase and long-term loyalty. Want to learn more about Retail Personalization? Check out the solution on AppSource today.

LinkedIn: ShiSh Shridhar

Twitter: @5h15h

The post Optimizing the customer journey with personalized engagement appeared first on Microsoft Industry Blogs.