– By Changa Reddy B
Connected intelligence establishes the missing links across different touchpoints in an end-to-end business process. The connection spans across enterprise applications, data systems, business processes, interactions and interventions to create a coherent ecosystem. It leverages data to generate granular insights, improving business efficiency through data-driven decision-making. The global market for Connected Intelligence is expected to grow at a compound annual growth rate (CAGR) of 24.5% from 2020 to 2028, reaching $1.7 trillion in value.
How does connected intelligence impact your retail business?
Data and digital solutions will jointly drive the future of the retail industry. With rapidly shifting customer expectations and preferences, retailers need to ramp up their game by embracing and implementing technological innovations to be best positioned to succeed in an agile digital ecosystem.
Connected Intelligence can transform the retail industry by enhancing customer experience, improving operational efficiency, increasing wallet share and head room potential, and driving new revenue growth.
By leveraging advanced technologies such as AI, machine learning, and digital twin, you can gain deeper insights into customer behavior, optimize supply chain processes, and deliver highly personalized and engaging shopping experiences. A market research report1 by Future Market Insights anticipates AI in retail will record 28% CAGR between 2023 and 2033 compared to the 19% CAGR from 2017 to 2022.
Retailers are embracing AI to augment customer experiences and online sales. Businesses that embrace a connected network will be better positioned to adapt to the rapidly evolving retail landscape and achieve competitive advantage.
Connected intelligence can be a retail game-changer
A connected retail ecosystem provides a comprehensive understanding of your customers’ needs, while boosting operational efficiency and reducing costs. Connected intelligence optimizes retail businesses across several organizational processes.
1. Real-time inventory management
With a connected network, retailers can optimize their inventory levels by analyzing real-time data on store inventory, DC inventory, inventory in-flight to store, purchase history, seasonality, and other factors. This can help reduce stockouts, minimize overstocking, and improve profitability.
Demand forecasting
Connected intelligence plays a crucial role in gauging demand and improving the accuracy of forecasts by leveraging customer data from a wide range of sources such as social media, sales, retail media network, and supply chain.
Assortment planning
In assortment planning, connected intelligence helps retailers gain a better understanding of customer preferences and behavior as well as market trends and competitor intelligence. This helps you plan your product selection, pricing, and inventory efficiently.
Optimized store-layout and merchandizing
Optimizing your aisle with the right products on the shelves attracts customers and drives sales. By analyzing adjacent product purchases and footfalls in aisles with a connected network, retailers can optimize store layout by leveraging advanced AI-driven insights.
Supplier performance analysis
Connected systems enhance supplier performance analysis by evaluating data from multiple sources to gain a more comprehensive understanding of your suppliers’ performance, including delivery times, quality of products or services, and pricing.
2. Personalized customer experiences
By embracing a connected ecosystem, brands can create a 360-degree view of their customers, including their past interactions, preferences, and purchase history. By leveraging this information, you can plan targeted promotions, recommendations, and messaging that resonate with your customer on a personal level, increasing customer loyalty and driving revenue.
Customized recommendations
Connected intelligence facilitates targeted, personalized recommendations to enhance customer experience and increase the likelihood of conversion, supporting stronger relationships with your customers and driving strategic business growth.
Retail media optimization
A connected ecosystem helps retailers achieve their advertising goals through effective campaigns that reach the right customers at the right time, resulting in increased conversions, sales, and maximized ROI.
Enhanced omnichannel experiences
Retailers can provide a consistent and cohesive omnichannel experience by integrating physical and digital channels, implementing a centralized inventory management system, and using data to personalize the customer journey across touchpoints.
In-store shopping experience
The future of in-store shopping experience lies with connected intelligence. Advanced technologies such as AI-powered virtual assistants, IoT devices, and augmented reality have started revolutionizing the way consumers interact with physical stores, providing a more personalized and delightful experience.
3. Impactful predictive analytics
By harnessing the power of connected intelligence, retailers can access real-time data, customer insights, and operational efficiencies. It helps in making predictive analysis more precise in mapping a customer’s path and providing valuable insights into the movement of prospects and leads.
Customer segmentation
AI-driven customer segmentation delivers highly relevant shopping experiences tailored for specific customer groups. Connected intelligence helps you analyze customer data to create more targeted segments and mitigates the limitations of traditional market segmentation.
Sales forecasting
Through real-time access to sales data and customers’ purchase history, predictive analytics can forecast the future behavior of your customers as well as sales and business outcomes.
Trends analysis
Predictive models based on historical data and powered by connected intelligence can forecast upcoming trends, spurring prompt and effective action to garner additional market share and optimal business outcomes.
Pricing optimization
Predictive pricing provides a competitive advantage, resulting in maximized business revenue.
4. Connected supply chain
According to research by McKinsey,2 AI-enabled supply-chain management reduces logistics costs by 15%, slashes inventory levels by 35%, and enhances service levels by a full 65%.
Optimized fleet management
Fleet managers form the link between suppliers and consumers. They use historical demand patterns to forecast truck needs and utilize data analytics to improve fuel economy and reduce downtime.
Optimal demand-supply matching
AI-enabled analytics match demand with supply by analyzing data in real-time, identifying patterns and trends, and predicting future demand. This improves decision-making and operational efficiency, leading to optimal demand-supply matching.
Transport cost optimization
Implementing a connected supply chain can significantly reduce transport costs by improving inventory management, increasing visibility into supply chain operations, and optimizing logistics routes, resulting in faster and more efficient delivery of goods.
Improved workforce planning
A connected supply chain can aid in workforce planning by providing real-time data on production and inventory levels, allowing for more accurate demand forecasting and scheduling of labor resources, which, in turn, will increase both productivity and cost savings.
Core Learnings
Strategic planning and collaboration between retailers and technology providers is crucial to meet the demands of a rapidly evolving market. It enables the development of innovative solutions and technologies that enhance the customer experience, increase efficiency, and drive growth in an increasingly competitive retail landscape.
The future of the retail industry is poised for transformation with connected intelligence. This innovative technology enables retailers to collect and analyze vast amounts of data to gain insights into customer behavior, optimize supply chain operations, and enhance the overall shopping experience. With connected intelligence, retailers can stay ahead of the curve and thrive in a highly competitive market.
(Changa Reddy B is the Vice President -Retail at Tredence. Views expressed are the author’s own.)
