For years, grocery managers were happy to use their experience to drive decision-making but technology is now proven to deliver the best decisions at speed. Blue Yonder asked 750 grocery retailers across the globe about decision making and customer service and half of grocery retail managers said that gut feeling still plays a major part in decisions: 50% say they still rely on manual decision-making and gut feel.
However, nearly 85% of UK directors say automation will help them to make faster decisions. By optimising key strategic areas of pricing and replenishment and automating decisions based on machine learning, retailers can combine the speed of their decisions with their KPIs (margins, volumes, mark downs). But retailers are not currently marrying the two in a responsive and transparent way.
Professor Feindt, founder of Blue Yonder says: “Retailers need to stop looking at data as an abstract object and look at is as a lever to create marginal gains through having the best price, best choice and best availability, which historically has always been impossible, until today. Where retailers once relied on making decisions manually, there has always been a limit to the number of decisions they are able to make and the level of accuracy and efficiency. Automated decision- making based on predictions can reflect both brand and trading KPI's at store level on a daily basis.”
Success looks like machine learning in 2017
The research revealed that grocery retailers believe robotics, machine learning and artificial intelligence will be some of the key game changers in the industry.
- Robotics is deemed as the technology likely to have the biggest impact on retail: 69% directors in the UK saying robotics will change the future of the industry. 31% feel robotics is changing retail already.
- AI/machine learning: 77% of UK directors say machine learning will make an impact, with 23% saying it already is.
But even though many retailers know that automated machine learning is critical to grocery success and it being widely acknowledged as technology that will make waves, investment is still not at optimal levels:
·Only 38% of respondents have invested in automation in the last two years in the UK.
·Only 37% are planning investment in automation in the next two years.
Retail is an industry undergoing significant technological innovation and it will continue to do so as brands seek to avoid joining the likes of Woolworths and BHS. Prof. Feindt concludes: “Retailers who are still discussing machine learning and AI as tech that is coming are too late – it is here already. We are seeing the technology of tomorrow already being used today, drastically changing how retailers and consumers interact and purchase goods.”