Irish retailers look to AI and other tech to streamline business

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Facing myriad of challenges, from increasing customer expectations to competing in an online marketplace, Irish retailers look increasingly to AI and other technologies

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14 February 2019 | 0

Two thirds (66%) retailers believe that consumers expect their businesses to be more innovative in the way they provide their services and products, while more than half (56%) are looking to Artificial Intelligence (AI) to help them address this desire for innovation.

This is according to a global study commissioned by Fujitsu, which also found that 68%t of retail leaders, in general, see technology as a way to improve customer service.

Commenting on the study, Thomas Burke, director of Retail Ireland said: “From the non-consumer facing element of the business, we are increasingly seeing the use of AI — which, two or three years ago, would have been quite radical or ‘out-there’ as a concept — [becoming] increasingly prevalent within the retail trading sector in Ireland.

“We may be seen as slower adopters in a lot of technology traditionally but [AI] is very useful from the perspective of keeping costs down and streamlining supply chains — helping to move product quicker and more efficiently — so absolutely, increasingly our members are reporting the use of that technology. Even in-store as well we are seeing an increasing roll-out of [AI] in terms of understanding what consumers want and personalising product offers.”

Automation
An example of how digital technology could be used to improve customer service is automation, with 53% of retail leaders saying that their organisation plans to automate some human tasks within the next three years, according to the global study.

Itziar García de Carellán, head of retail at Fujitsu Ireland, said: “The narrative has been somewhat twisted in this sense, suggesting that automation necessarily (sic) leads to job losses. This is not the case; in fact, it frees up time from repetitive and process-orientated (sic) tasks to focus on the human side of customer service and allows retailers to be even more responsive to changing customer needs. The results of this survey are proof that retailers recognise the need for adaption (sic) in this highly competitive environment. Competition is no longer between two shops on the same road, but between dozens of retailers physically and online around the world.”

Commenting on the impact of automation on employees, Burke said: “I know the increasing use of technology in retail [is seen] as almost being the death knell for the traditional labour intensive nature of the sector, but I do not necessarily share that view. My view would be [that] at the moment it is quite complimentary, streamlining processes more than anything else, and giving the retailer real-time insight in terms of consumer demand, consumer changes in preference, and consumer habits etc., so I do not see it as having a massive impact on the numbers employed in the sector in the short-term.

“Now, in the medium and long term you may question, and it is very difficult to say, where technology will go in the time horizon beyond two to three years, but certainly, according to the research we carried out…  there is not going to be a very significant impact on the numbers employed; it will not grow dramatically, but certainly it will be ‘steady as she goes’ until 2020 in any case.

“It is just about streamlining the business, automation of traditionally manual processes, they are the sort of things that technology will have a bigger impact on, so I do not think there is any need for workers in the sector to be dramatically concerned. The nature of retail is that it is public facing, it is human, and the level of human interaction required for it to be of a satisfactory standard remains quite high, and that is certainly what our members are telling us. They see their people as their biggest asset in terms of engaging consumers etc., so at a front-line level, there certainly will be no impact on the numbers employed in the short term.”

Consumer Expectations
The global survey also revealed that 73% believe that their organisation is well-positioned to meet customer expectations over the next decade.

For retailers who traditionally have a bricks and mortar business, they are now increasingly beginning to focus their attention to their online and digital channels. This in itself presents a unique challenge to these retailers when it comes to marrying the two — a bricks and mortar retail shop, and an online channel — and making it one seamless system and one seamless offer. The consumer does not particularly differentiatie the brand whether it is online or in-store, they expect the same level of service and the same extensive product range regardless, and that is definitely a challenge, said Burke.

“Consumer expectations in retail have been fundamentally transformed over the past decade or so, as Amazon and other ecommerce leaders have brought a whole new level of convenience to shopping. Irish retailers are working in an unpredictable and competitive market, and with customers increasingly inclined to not trust businesses, they need to meet consumers on their own terms and find new ways to delight them and to earn their confidence,” said García de Carellán.

García de Carellán concluded: “That customer service is the focus, and that technology is the way forward to ensure retailers are at the competitive forefront in their sector, is now overwhelmingly established by this survey – it just confirms what we have known anecdotally for a while.”

TRUST
The study found that 79% of Irish retailers believe that putting customers first will determine their long-term success, while a similar amount, 84%, cite “trust” as an important factor for maintaining strong customer relationships. However, 52% of retail leaders in Ireland believe customers trust businesses less than they did three years ago.

“I think there has been an erosion of public trust in brands more generally over the recent years… so it is certainly more challenging for businesses to gain and retain that trust than it might have been 10 years ago,” concluded Burke.

To download the full report, see www.fujitsu.com/success

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