With automation becoming a key factor in retail, Milan Sheth, EVP-IMEA, Automation Anywhere an exclusive chat gives his expert opinion on automation and its role in retail today.
Over the years, the consumer mindset has evolved and there is so much more that the consumer wants from a retailer/brand. Throw some light on the trends you have noticed through decades so that we can understand the changing consumer perspective.
We can view the evolution of consumer mindset via a set of different viewpoints:
- Consumer behaviour lenses – Consumers themselves have changed vastly over the decades and whoever could predict their behavior had the best chance of being successful in the market. If you look at the popularly used segmentations – we had the baby boomers (currently aged 57 to 75) followed by Gen X (currently aged between 41 and 56). The most talked-about was Gen Y or Millennials (now between 25 and 40). We talked about them for a long while until we recently realized they’ve had kids, and their kids – Gen Z) are now entering the workforce. We saw the success of this with millennials especially, the first generation to have seen analog as children and grow into digital – the first generation of digital natives.
- Technology and circumstance are the two primary drivers of consumer behavior. For example, baby boomers were born after the world war and experienced economic optimism after the great depression. Family values and hard work defined them. They are apt to use technology, but value relationships. This could be why we saw the rise of banking and investments, malls, and family entertainment. Millennials on the other hand were the first to experience barriers being broken by the internet, mobile phones, and affordable air travel.
- Rapid change driven by an extraordinary global circumstance – the Covid-19 pandemic. A McKinsey study says that we have “covered a decade in days”. The extended lockdowns, isolation, and impact on income are already changing consumer behavior. Three change forces are seen here – economic downturn, preference shifts, and digital acceleration. We saw a decline in consumption, but a rise in e-commerce, an uptake in e-learning, and of course the boom in streaming media.
- Data – the new consumer behavior lens – When it comes to what is next after Gen Z, this gets interesting, because of the phenomenon of data. There is no longer any need to fund research and extrapolate it – retailers now can get instant feedback from their customers, and data by the hour to make predictions that are as narrow as the next day’s trend as well as make strategic decisions.
D2C (direct to consumer) commerce is the future of retail, what is your thought on this perspective? Also, how does automation work for these new-age companies?
Traditionally, consumer-packaged goods relied on finding efficiencies between supplier, manufacturer, wholesaler, retailer, and distributor. These are becoming less relevant with D2C. Anyone who has a product idea manufactures it, builds a website, and promotes it using digital marketing could create a new consumer brand, and control its brand story.
Automation is the key technology towards successful implementation of D2C yielding profit. It works on digital mediums and channels, supported of course by a fulfillment approach like storing products at a warehouse and tying up with delivery. Automation is poised to reshape retail business models and the broader value chains, by creating organizations with fewer layers and an efficiently trained workforce empowered by real-time data and analytics. Sales and customer experiences are created using real-time data, and personalized communications through social media, digital advertising, and email.
How does automation help retail redefine customer approaches?
Intelligent automation can help retailers create a digital experience for their customers, and also automate their business processes across the front and back offices to realize efficiencies.
Simplifying operations using automation allows the retailer to focus more on the customer and drive profitability, new product innovation, and new markets. Intelligent automation can automate.
- HR processes such as onboarding and off-boarding, payroll, and data management
- Automation in supply chain can increase time to market, and can be applied to inventory management, suppliers and vendor management, invoicing and contracts, freight, and logistics, and returns processing
- IT services and solutions for enterprise computing and end-user experience
- Finance and accounting in procure to pay, order to cash, vendor management, sales order management, etc.
Customer engagement is where automation makes it very exciting. With the immediate availability of data, possibilities are endless. Automation and AI-led segmentation, content selection, channel execution, and campaign optimization deliver a customer experience that delights the shoppers.
Omnichannel is here to revolutionize the retail space. COVID has certainly accelerated the process of digital transformations. What is your take on this?
Digital transformation is occurring across industries. Perhaps the most dramatic transformation of all is taking place in retail – here it’s all about creating digital-first experiences. Omnichannel is doing this – creating an ongoing series of experiences to keep the customer engaged across digital and real-world spaces.
What is going to be important is for retailers to look at the world from the point of the customer and create a digital experience. While retailers used to spend resources and effort on creating experience zones, showrooms, now its digital-first experiences they need to create.
A few things are going to be important in this:
- Data – retail was the first industry to understand the value of customer data. Today with access to do so much information on customer behavior, data and how it is used will make retailers successful. Retailers can make strategic decisions, but also more importantly give the customer an ‘always-on’ experience.
- Digital-first customer experience – online is not a supplementary channel, the pandemic taught us this lesson. Retailers need to create digital experiences, not just catchy graphics but build their business approach with a digital-first mindset. We are seeing this getting implemented in the banking industry, for example, neo banks are completely digital, with no branches at all – just a simplified experience of banking with a few clicks.
- Technology – from a customer experience point of view, technology offers retail amazing possibilities to create digital experiences. Social media can help connect retailers to their users. WhatsApp and Facebook, for example, are familiar and comfortable spaces that users are looking to do more on. Augmented technology and virtual reality are emerging with interesting possibilities. New ideas are being explored, such as – can viewers watching movies or series buy products that they see on the screen? Customers are looking for a connected experience, which retailers have been defining for years.
Automation can help retailers drastically simplify and seamlessly scale these features without the need to add high costs and complexities of managing a proportionately large workforce.