Relentless competition that pushes prices and margins down, changing and unpredictable consumer tastes and the need to achieve operational efficiencies while meeting customer expectations—this is just the beginning of the list of pressures retailers have to manage in a hyper-competitive marketplace. In this kind of environment, Artificial Intelligence can offer the actionable insights needed to deliver next-level performance and drive revenue like no management or marketing strategy ever could. In cooperation with Microsoft, Synerise develops an AI-driven solution that can address key pain points of the retail industry regarding the processing and leveraging of collected data. This is the story behind it.
At Synerise we work closely with decision makers of the biggest retail chains in the world, which gives us first-hand insights into industry forces and needs. We also bet on partnerships with the most disruptive and experienced companies to share thoughts and answer the challenges that modern world creates. Microsoft is a leader we cooperate with very closely for guidance and support in the retail industry.
During the last three years, retailers have gathered more data than throughout all their previous history. However, the ability to translate raw data into meaningful insights and to execute on those insights in real-time remains the Holy Grail to many. Managing this data by leveraging AI solutions has become mission-critical for any brand hoping to thrive in today’s marketplace - said Paul Maher, General Manager, Industry Experiences, Microsoft Corp.
Fortunately, thanks to the rapid development of AI-driven solutions, a customer-oriented assortment, price and supplier collaboration management has become reality. Together with Microsoft we are working on a solution to provide insights and actions driving the right business decisions to increase revenue and margins. We are proud to be a part of the leading edge of this massive transformation that’s helping retailers provide a better customer experience while improving their bottom lines.
Experience over products, knowledge over instinct
The retail industry is now dealing with a customer base that is more informed and empowered than ever before. This has had a profound impact on customer shopping habits as they take advantage of both established and emerging technologies. Value-oriented customers with a growing population of digital natives equipped with smartphones and wearables, expect seamless, personalized, and experiential interactions. To be a factor in retail, you have to keep up or get pushed aside by someone who can.
Retailers struggle then to maintain smooth, consistent communication with their customers, making over 10.3 billion pricing and product decisions every day. Unfortunately, only one quarter of customers are satisfied with their efforts and the rest leave without making a purchase. More than two-thirds of promotions prove to be unsuccessful. As 8 out of 10 shoppers select retailers based on price expectations and perceptions, offers should be delivered at the right price and right time throughout their journeys, blending online and offline touchpoints at physical and digital locations.
Retailers need to be confident that each product and its price is appropriate at all times in every channel and location for every customer. They need to utilize all contextual data and market intelligence to generate the right insights to attract and delight customers, build loyalty and to meet strategic and financial goals. They also want to monitor the impact of each change in real-time and measure with ROI.
Retail chains also fight internal battles related to margin erosion, volatility in both demand and supply, siloed processes and systems and a constant need for skilled employees equipped with decision supporting tools. They also struggle to directly link business strategies to implementation with real-time monitoring. Other challenges eat away at process efficiency and margins, like the inability to measure pricing and promotion effectiveness, supply costs and ineffective negotiations with suppliers, a lack of connections between pricing & promotions and markdowns and insufficient analytics to drive profitable decisions generally.
The Rise of AI solutions for retail
The challenges facing the retail industry are even more difficult when you factor in that 50% of retailers use homegrown or ad hoc systems, built internally to “control” their customer experience, assortment, price and supplier collaboration management. The limitations of these tools soon become apparent as the size and complexity of the data being processed becomes too great. They are not designed to operate within the framework of the retail industry and cannot offer:
- the right insights utilizing all contextual data and intelligence about the market, shoppers and competitors
- hyper-personalization of each interaction with customers to add to the ‘delight’ factor and build loyalty
- monitoring of the impact of each decision in real-time (plan versus actual) and measured with ROI
- direct links to and delivery against company strategic, operational and financial goals
It’s hard to believe that there is an emerging technology that can solve them all with a single solution. Hopefully the answer comes with the development of Artificial Intelligence. McKinsey and Company predicts that application of AI can boost retailer revenue between 3,2 and 5,7%, generating overall $2.9 trillion in business value by 2021. Companies who will take advantage of AI now will change the retail landscape in the upcoming years and become leaders of a seamless customer experience, increasing market share at the same time.
Algorithms powered by Artificial Intelligence are well-suited for applications in a number of aspects of the retail industry. In particular, AI is uniquely positioned to leverage the massive amounts of data gathered as a result of interactions between brands and customers on connected devices.
Introducing AI Retail Growth Suite from Synerise
We use predictive & prescriptive analytics and optimization based on AI algorithms to plan and manage every aspect of product, price and supplier collaboration keeping customer in the focus.
Synerise combines one of the fastest real-time processing databases in the world with AI algorithms hosted on Microsoft Azure. AI Retail Growth Suite by Synerise analyzes billions of contextual customer data points, including online and offline consumer behavior, market intelligence data, competitor activities and internal datasets. It then applies robust business logic and AI recommendations to a customer-focused product and price mix linked by workflows for supplier collaboration. Solutions are focused on helping retailers to make the right business decisions and automate processes based on the best and most current data.
One of the barriers to the adoption of AI solutions by business users is the ‘black-box’ work of ML algorithms. Explainable AI Retail Growth Suite is built on the glass-box concept with natural language explanations of each recommendation. Another aspect that drives adoption is the utilization of the Augmented AI concept, where we combine business logic, rules and user feedback to improve algorithm outputs. In time those models become a trusted source for the majority of automated decisions. - said Magdalena Jończak, Vice President, Chief Value Officer at Synerise.
What are key differentiators of Synerise?
- Product, pricing & supplier collaboration in one solution
- Modular approach enabling one by one implementation of even most simple use cases
- AI algorithms embedded at each step of the solution
- Fast real-time database on a single platform
- Explainable AI – no black box recommendations & Augmented AI for user support
- Full automation capabilities with rich exception management
- Integration with Synerise ever-evolving stack of 1000 features
Due to embedded various analytical methods (rule-based, statistical and AI algorithms) AI Retail Growth Suite allows users to trust AI driven recommendations and makes technology adoption intuitive.
Yesterday's theory, today's reality
Changes like the ones described here are indeed revolutionary but tech solutions like AI Growth Suite are more accessible than you might think. In fact, you can harness the power of AI-driven algorithms in a matter of just a few days. Turning data into useful business insights is a problematic task for 90% of enterprises but the solution is now within easy reach of any forward-thinking organization looking to leverage the untapped potential of oceans of data.
At Synerise, we’re excited about the incredible list of business applications for AI Growth Suite, which grows longer by the day. Thanks to the help and close support from the experts at Microsoft, we have built a tool that can transform results for retailers with the courage to leave conventional tools behind and take a step into world that was inconceivable just a few years ago. We invite retailers for collaboration on a lighthouse partnership basis to leverage their data and turn it into meaningful, actionable insights. Our Lighthouse Partners are eager to get an accelerated competitive edge through AI top-notch solution. They will get access to 30+ data scientists and 100+ DevOps supported with experienced business practitioners. We will engage our Lighthouse Partner employees in the task of solution design, ensuring education and adoption. Let’s talk!