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Retail Reimagined: On the Frontier of Enterprise-scale Technology

November 22, 2017 by Paige dos Santos, Digital Transformation Lead, SAP Africa 0

As Black Friday draws closer and the Christmas period stretches out in front of us, South African retailers are gearing up for the busiest period of the year. The battle to attract and retain customers rages. 2017 has added many new toolkits to the arsenal of technology tools available to the retail industry. Omni-channel has evolved to enable businesses to not only understand who their customer is and what they are thinking, but to know what they are feeling too. Chatbots have started to pave the way to digital engagement for the illiterate population. Digital supply chains have matured and provided huge scope for optimization and innovation. For Africa, the opportunities in retail are significant, if we design for our unique market requirements.

Toward a deeper understanding of customers

Emotion forms a key ingredient of intelligent perception, telling humans what to pay attention to and what to ignore. This is why machine learning in the facial recognition space is such a breakthrough. Using SAP Hybris, customers are now able to track the sentiment of customers and their behaviour, both in their responses to digital interaction, and in-store experiences.

This enables retailers to understand better than ever before what surprises, delights and engages their customers. They are also able to understand the customer segments that frequent individual stores and correlate this with existing customer loyalty data and POS spend. This unlocks a more holistic view of customer purchasing behaviour, particularly the outliers who are not yet loyalty members.

New means of customer engagement

The mechanisms for engaging with customers are also evolving. In-store displays can be linked to customer segment profiles, providing customised recommendations and discounts to drive customer experience and upsell in store. A new generation of chatbots have appeared, including the Hybris Labs’ prototype Charly. Charly is not just a chatbot, she’s your personal grocery assistant. Charly can find products via text or image searches, recommend items, create shopping lists and checkout online for you. All done through your standard Facebook Messenger interface. By engaging via an already familiar interface, Charly is comfortable and easy to interact with. She makes online grocery shopping feel like chatting to a friend a friend, rather than engaging with a business.

The move toward natural language chatbot interfaces is of particular interest in an African context. UNESCO reports that 38% of Africa’s population are illiterate. Illiteracy limits the ability to interact with certain populations via digital channels, despite increasing levels of smartphone penetration. Chatbots and natural language interfaces via text lay the groundwork for data models which can be applied to voice interaction, enabling customers to converse with digital channels without the literacy requirement. In addition to this, our language diversity can form a barrier to digital engagement.

According to the African language programme at Harvard University, there are anywhere between 1000 and 2000 spoken languages in Africa, and at least 75 languages across Africa that have over a million speakers. This is where rapidly advancing machine translation capability plays a role. By introducing constantly learning machine translation services, we will soon be able to interact with illiterate customers in their home language, via voice interface.

New technologies permeate retail value chain

If you like Charly, you’ll love Pepper. Softbank’s humanoid robot is the first of his kind able to recognise human emotions and adapt his behaviour accordingly. Hybris Labs has taught him some new tricks, including directing shoppers to products via QR code, enabling instant purchase in store via Pepper’s screen and initiating customer engagement on social media to earn discounts on the items they are about to purchase.

On the supply side, digital supply chains continue to mature. Sensor technology, combined with advanced analytics and data visualisation, provides retailers with visibility of the complete supply chain. This includes fleet location, stock-in-transit and condition and provenance of goods, among others. Such information can be augmented with advanced analytics and machine learning to optimise fleet routes, or predict problems with quality of goods prior to them being placed on shelves.

The move towards in-the-moment realograms of bricks and mortar retail stores unlocks a new world of possibilities for process and stock optimisation. A variety of technologies such as machine learning image recognition and power-shelves are providing real-time visibility of stock-on-shelf. By combining a view of consumption patterns in store with stock levels and goods-in-transit, businesses will can drive promotional activities and optimise their supply chains, to balance stock at an individual store level.

Convenience as driver of optimisation

Convenience continues to drive consumption in every market. Supply chain optimisation and the ability to utilise microservices provides retailers with the opportunity to metamorphize their offerings. Image recognition and QR code technology can be combined with ecommerce platforms to allow “shops” to be set up anywhere– from offices to taxi ranks. This allows retail brands to intercept customers in their everyday lives, at the places they are most likely to engage. Customers can place orders from their mobile phones by scanning QR codes of products on a full-size poster of the ‘store shelf.’ Their groceries are then delivered to their home or a refrigerated locker at a convenient location for collection.

Globally, food deliveries wars continue to play out. At-home eating is served by grocery stores, grocery delivery, prepared groceries and meal deliveries. The meal delivery market is seeing a growth surge, in line with the global shift towards an on-demand economy. The adoption of Uber Eats has resulted in “dark kitchens,” popping up all over. Dark kitchens are kitchens with no restaurant attached, that provide food via delivery services only. What might a South African version of this concept look like, serving the mid-tier LSMs at a lower price point?

As technology advances to unlock a myriad of opportunities for retailers, designing unique solutions for our South African market is essential to unlocking the potential of these capabilities. By keeping in mind the jobs our customers (and our employees) are trying to solve – from a functional, emotional and social perspective – we can design products and services that are adopted and loved. An example of this is the challenge many families face in our difficult economic climate: to provide nutritious meals for their families, at an affordable price point.

Machine learning driven applications could be utilised to enable customers to enter their budget constraints, as well as the number of people in their family. The tool would then generate a suggested shopping list and nutritious meal plan to suit the customers budget. Real-time stock price data and product nutritional information is used to help customers optimise the health of their families whilst driving customer engagement, sales and brand loyalty.

The possibilities are seemingly endless. Ideas without action are of course just ideas. Bringing those ideas to life requires diverse skills, structure and strong technology. The SAP Leonardo digital innovation system brings together all these critical components to build ideas into concepts that can be quickly taken into production. By combining the passion and spirit of Africa with the efficiency of German engineering, it brings digital innovation to life.

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