From pandemic highs to inflation-driven lows, retailers have been on a roller coaster over the last 3 years. However, we are far from the “retail apocalypse” predicted in 2010. Instead, retailers have reinvented themselves for a new era by embracing cutting-edge technology and old-fashioned ingenuity.
Although creative strategic thinking cannot be quantified, the increase in retailer confidence in digital technology is well documented. In fact, experts predict that global retailer investments in digital transformation tools will reach $388 billion by 2026growing 18% a year.
Here’s a look at how three big retailers are leveraging process miningartificial intelligence and business process automation to solve the industry’s biggest challenges.
Since we originally covered IkeaThe cloud-powered omnichannel transformation of 2021 has happened a lot.
In addition to launching new AI-powered customer experiences, such as Creative IKEA, the global retailer has also revamped its back-office systems. Leveraging SAP technology, Ikea digitized, standardized, and simplified its financial and purchasing processes. To achieve further efficiencies, the company has also implemented Celonis’ process mining tool.
For example, Ikea executives noted that the company’s default rate (the percentage of people who never pick up items they bought online) in the UK and Ireland was especially high. Leveraging SAP and Celonis tools, the company was able to identify the solution: reduce the time period in which the customer could pick up the product.
in a recent celonis event, Tim Hills, data and process information development manager at INGKA Group (Ikea’s parent company), explains: “When we look at the various factors contributing to this click-and-collect cancellation, we can see that the UK had more chances than everyone. of our other countries combined. But when we looked at the data further, we could see that we had some countries with similar volumes to the UK, but lower churn rates.
So it’s about trying to understand the correlative and causal effects in the end-to-end flow, and then looking at what’s causing the problem. How do we prevent it in the first place?
In the tools that we have you can configure the collection window between 1 and 12 hours. One of the things we were able to see is a causal effect between the length of those windows and the churn rate. We did some testing in the UK to reduce those appointment windows and it showed that for every hour we reduced those appointment windows, the cancellation rate dropped by 7%.
In 2020, Macy’s executive team unveiled its multi-year turnaround strategy, Polaris. An omnitransformation, the five main components of Polaris’s strategy were strengthening customer relationships, selecting quality fashion, accelerating digital growth, optimizing the store portfolio and restoring the cost base.
Fast forward almost 3 years later and despite some ups and downs, the Polaris strategy has proven to be a success. In addition to automating its warehouse operations and launching new digitally-enabled customer experiences, Macy’s is also leveraging data analytics to streamline inventory management and more effectively navigate supply chain disruptions.
For example, after mining vast amounts of credit card data, Macy’s identified some concerning consumer trends. Thus, the information prompted the company to cancel orders and adjust its spending on merchandise just as customers were reducing their spending on discretionary items. As a result, the company was able to avoid the inventory buildup that plagued its competitors.
Last year, the world’s largest retailer, walmart, Announced you would be updating your regional distribution automation strategy. To start, the company plans to deploy Symbiotic’s robotics and software automation platform across its 42 regional distribution centers. As of now, they are leveraging the technology in 25.
In a statement to CSA, David Guggina, Walmart US senior vice president of innovation and automation, explained: “The need for precision and speed in the supply chain has never been more visible, and we are confident that it is now the Time to move even faster. scaling Symbotic’s technology to our entire network of regional distribution centers. Using high-speed robotics and intelligent software to organize and optimize inventory, the Symbolic System helps us get products to our customers quickly and seamlessly by revolutionizing the way we receive and distribute products to stores.”
Further augmenting its automated distribution strategy, in October 2022, the company announced that it would acquire Alert Innovation, a material handling technology for automating order fulfillment in retail supply chains. In addition to automating order retrieval and fulfillment, it also offers enhanced data analysis capabilities. In addition to delivering real-time data, leveraging AI and machine learning, the system has also learned to perform out-of-stock replacements.