Retailing in the era of Live Enterprises!

Retail enterprises should be able to respond under pressure. They should be aware and be able to respond to stimuli, no matter how extreme, in its environment -- taking cognizance of market shifts, making decisions, checking inventory, and automating changes. However, the reality of being able to do so is far more complex. In the last few weeks, we’ve had the opportunity to experience how retailers have grappled with a whole new slew of challenges – more customers online, steep spikes and plunges, and a workforce that needed additional care, among others.

To give you one specific example, large retailers that source products from suppliers across the globe could wait any time between 60 to 90 days for deliveries. During this time, many have zero visibility into their orders, and with the significant Lead Time (LT) variability, retailers struggle to make delivery commitments to their customers. The default on OTIF (On Time In Full) and Perfect Orders costs the industry more than 100 million USD in lost sales and half of that in penalties and charge backs every year!

As data becomes increasingly available to all, digital-native firms are first out of the block to leverage data pools for personalized experiences. They seem to be able to make targeted purchase recommendations, create deeper engagements, and almost intuitively foresee the next trend and prepare for it. As large incumbents catch up, the question is no longer about incumbents vs. digital start-ups. Instead, it is about an organization’s ability to leverage emerging technologies to up the ante for the demanding, sophisticated, impatient retail consumer.

Today especially, retailers -- incumbents and natives alike -- are armed with data lakes (should we start calling them ‘data oceans?’), considerable analytical muscle, intuitive intelligence, and sophisticated automation. Welcome to the era of Live Enterprises!

Data, data everywhere. Retail organizations lend themselves well to the analogy of a living being. They must continuously sense, learn, and respond to market/environmental changes.

Live retailers are those evolved organizations that devolve routine data management and decisions to AI; this organization is so tuned to market events that it responds almost instinctively, without interrupting what it is doing.

Intelligent Automation. Using AI, retailers are increasingly automating myriad routine activities and decisions that take up the energies of the workforce. Grappling with data to get through daily decisions (Shall I order this product today? Is this customer a reasonable credit risk? Which shelves are empty at which outlet?), employees who are focused on minute details miss out on the larger signals indicating unmet needs, emerging trends, or unresolved problems. But with intelligent automation of the mundane, they are set to reimagine value chains, improve processes, and eliminate redundant activities.

Experiential retail. As the millennial consumer increasingly seeks experiences, emerging technology is critical to its success. As data highlights the gaps in the value chains – mostly unmet, unarticulated needs – retailers are trying to fulfill them through conscious experiences and innovations – generating a fresh round of data and intelligence to improve decisions and customer value chains further. Thus, a self-sustaining virtuous cycle is begun that is institutionalized over time.

I began by juxtaposing an ideal state and reality; let me conclude with an example that offers a glimpse into the future.

Infosys and a global logistics visibility provider created an intelligent supply chain orchestration solution based on the Digital Brain (part of the Infosys Live Enterprise Suite). The solution offers end-to-end visibility into global supply chains, integrates data from suppliers throughout the value chain, predicts exceptional events (failure), and suggests alternative routes with the cost-time trade-off. The outcome: improved OTD compliance by 3 to 5 percent to reduce lost sales by about US$ 30 million and chargeback by about US$ 5 million. The result: the evolution into a Live Enterprise!  

#LiveEnterprise #DigitalTransformation #Retail #Data