AI’mpowering the Indian retail strategy, ET Retail
In the last 10 years, the Indian retail segment has evolved beyond comprehension. The proliferation of the dot com era in tier-II and tier-III cities coupled with the nascent yet aggressive phenomenon of the online D2C channels vaguely suggested the extinction of the humble retail physical stores. But post-pandemic, we saw Indians challenging this popular belief. Internal studies and the increased focus witnessed by brands suggests that Indians are privier to pursuing high-value purchases when visiting retail chains. This can be owed to how for Indians experiencing the product in tandem with seamless customer experience plays an integral role in felicitating a purchase. A report from KPMG also shared that 52% of customer purchase decisions rely on customer experience.It is established that retail stores also play an integral role in building trust in a brand in the country. And the success of retail chains and brands is equally pillared by customer support in tandem with product/services. This puts the idea of continuously working towards elevating customer experience and ensuring support at necessary touch points a cornerstone when formulating brand strategies. With the advent of Artificial Intelligence layered solutions taking precedence and simplifying solutions, brands have the opportunity to also integrate AI in retail chains to increase efficiency.
One of the most significant roles of AI is its ability to predict and understand human behaviour using accumulated data. The system takes large amount of data into consideration that acts as a window into customer preference and behaviour at different days of the week. One intriguing example that I had the opportunity to witness was in a hypermarket. A customer would purchase groceries every Thurday, his order was simple, eggs, cheese, milk and breads and the system developed an understanding of this shopping pattern. One day the customer got a message from the said hypermarket for a coupon for 1+1 on a tray of eggs on Thursday for a particular brand, thus acting as a reminder to go to the supermarket to buy groceries. This coupon not just acted as a feel-good factor for the customer but also acted as a solution to the surplus inventory. This level of personalization significantly enhances customer satisfaction and loyalty, which are key drivers of retail success today.
Integration of AI enables retailers to offer a personalized shopping experience with hyper-relevant product recommendations to each customer. This is not just about addressing them by name but understanding their shopping patterns and preferences, which can be as detailed as predicting what products they might need based on past purchases or even predicting size and color preferences.
Not just limiting AI’s capabilities to elevating customer experience, the technology can also forecast future trends that allows us to stock inventory and solutions that are best meant for the predicted demand. Like in the PC industry, every machine has a predicted life cycle of 5 years. Owing to multiple programs and forecasting solutions, it has been suggested that AI in PC will be the next big phenomenon that consumers will seek from their machinery and this is now becoming increasingly prevalent in laptops in the country.
Retailers in India need to open up to the possibilities on how integration of AI can give them an edge by increasing efficiency, personalise experiences that in turn creates a win-win situation for both, them and their customers. AI enables companies to navigate through inventory management at ease. The data allows them to understand and stock items that customers want and avoid excess inventory that doesn’t sell. This tailored inventory management solution not only ensures customer satisfaction by having the right products available, but also improves the overall efficiency of the supply chain.
Additionally, AI improves efficiency through data processing and trend prediction, while also reducing forecasting errors and lost sales especially in volatile market conditions. It facilitates risk management through predictive analytics, enables real-time decision-making and adaptability, and aids in long-term strategic planning through time frame analysis for monthly and seasonal purchase data. The pricing analysis optimizes prices for competitiveness and profitability, while Inventory AI ensures optimal stock levels and addresses inventory challenges. AI can also graph out competition movements and provide real-time insights into competitors’ strategies. The combination of these features creates a cohesive and dynamic retail strategy, positioning businesses for future-proof profit optimization, creating a synergistic effect for profitability and operational efficiency.
It has become imperative for brands to also understand the role AI can play in further ensuring heightened customer engagement and satisfaction. To thrive in this evolving environment, Indian retailers need to leverage Artificial Intelligence (AI) for a competitive edge. AI’s perceived value and first mover advantage cannot and should not be ignored. As a nation that boasts of a vast consumer base coupled with an emerging digital ecosystem, the time is of the essence to intensify the adoption of AI in retail.
(DISCLAIMER: The views expressed are solely of the author and ETRetail.com does not necessarily subscribe to it. ETRetail.com shall not be responsible for any damage caused to any person/organization directly or indirectly.)
