The Changing Face of Retail in Canada: Insight-Powered Reinvention

Authors: Krish Banerjee Mike Cloutier Brian Ng ??

Innovative retailers are leveraging data and cloud to redefine their competitive edge. A failure to do so increases the risk of falling behind and rendered irrelevant. Forces from consumers, producers, intermediaries, and regulators are driving change at an unprecedented rate. We, as customers, are noticing our day-to-day shopping experience drastically changing as the reinvention occurs.?

Concretely, the customer has moved away from brick-and-mortar only stores to e-commerce and immersive shopping, motivated by increased convenience, enhanced experience, and competitive pricing. Retailers and suppliers are organizing and searching for their reinvention to meet customers wherever they are. For example, retailers placing strong emphasis on environmental initiatives; establishing themselves as a marketplace, where influencers play an increasing role in capturing attention; breaking down barriers between traditional and digital worlds; leveraging the advent of Extended Reality to create new experiences; and focusing on supply chain innovation to make sure the right goods are at the right place and time. [1]?

Reinvention takes time and attention is limited. We will be presenting stories of retailers taking ownership of their redefinition and illustrating the role of responsible use of data and cloud to unlock insights. [2] & [3] Along the way, we will make sure to provide the lessons learned as their transformation partner. Let us look at a retailer that has strategically decided to have data at its core.??

Insight-Powered Transformation Stories?

Data at the Core of Business Transformation??

Imagine a steady stream of insights to help make better decisions. Data & AI have opened the door to entirely new possibilities. Our first example is a leading retailer obsessed about customer-centricity powering the organization. Data-led transformation was a well-thought investment strategy to unify the three businesses: retail, pharmacy, and health. The key objective was to drive new opportunity, specifically business growth and value creation, which was achieved by setting facts and data at the core of their strategy.??

The transformation is happening. Winning themes involved successful deployment of two parallel streams, called a dual-velocity approach. The first stream focused on enabling the foundation, including data governance, cloud consumption optimization, and other enablers for short, medium, and long-term velocity. The second stream was focused on unleashing immediate business value, including customer experience, capital expense optimization, new product, and services, to generate and maintain momentum across the organization.??

Top lessons learned from this data-led transformation: 1) innovation happens at multiple speeds and business needs are easier to address with literacy, while often only asking for a simple self-serve visualization; 2) The driver, data, is often locked in silos and may not be available at first for decision-makers; and 3) Strong leadership with a solid purpose statement is a recipe for success, for example: “happier and healthier lives.”??

Data-Led Personalized Experiences??

Better understanding and connection to customers have never been more important in the new retailer landscape where customer expectations are constantly shifting and on the rise. With the increasing uptick of online & social consumer platforms, enriched and consistent customer experience spanning across multiple channels, is key not only to retaining the best customers but also to driving critical growth.??

A leading international beauty product group has decided to increase its customer engagement by putting customer relationships and sentiments at the center of their digital and personalization strategy. By investing in a cloud-based data foundation and setting up data connections for large volumes of rich customer data across diverse sources and channels, the group enabled faster insights, and creating impactful product messaging, recommendations, and rewards for its customers.?

The results were deeper and timely engagements with millions of customers, achieved by generating tailored messages across all digital platforms. Email campaigns soared 35%, and e-commerce engagement jumped up to 25%, above average order value. Overall sales conversions went up too, by 25%. The beauty group is now on a digital-first journey, gearing up to unlock new capabilities, such as virtual skin diagnosis and try-ons for bespoke products before they shop. ?

Optimized and Diversified Supply Chain Operations?

In Canada, a leading retail chain with 1,000+ stores and a promotional portfolio of 17,000 items worth well over $9 billion a year, was faced with the challenge of accurately forecasting and adjusting its inventory levels in the supply chain. Every shift in basis points in inventory level translate to millions of cost savings or waste. To overcome the faced challenges, a cloud-based data and analytics solution was introduced to automate data connections from stores and vendors. The newly introduced data foundation and the surrounding work processes produced accurate demand forecasting, order management and advanced reporting based on machine-learning models. It enabled the retailer to produce new insights to optimize product quality, availability, and freshness.?

There were three majors impacts of the implementation. First, on the customer front, the retailer experienced a 10% increase in the number of customers walking into the stores in search of an item being on promotion, jumping from 88% to 98%. Second, the retailer achieved optimized promotional forecasting, which resulted in a 30% reduction in inventory, a 15% increase in forecast accuracy (to more than 75%), and a 10% improvement in store-based accuracy. Third, the retailer obtained far better and more useful insights into what promotions really worked, helping them enhance and sharpen their overall approach and strategy. ?

The Future Looks Bright for Sophie??

Some other cutting-edge retailers are combining emerging technologies with insights from data to create a whole new experience and relationship with their customers. Think about a future where your needs are anticipated and served before you even articulate them.??

Meet Sophie, an avid shopper at her favorite athletic footwear. She is eager to purchase a new pair of shoes for her hike tomorrow. The online presence of this retailer is off the chart using a refine and caring personalization engine, which recommended her products that were both timely and relevant. Sophie clicks the “instore pick-up button” and hits the road, and as she is making her way to pick-up, she receives a discount through the retailer’s loyalty program. While instore, she rejoices the immersive experience, as she turned on the Augmented Reality feature. She walked by the mirrors, mesmerized as they turn into fitting virtual fitting rooms, and she simply iterates through her clothes with a swipe of her finger in the air.??

Though Sophie has left the store with only the pair of shoes she ordered online, her data point propagates into a private hybrid cloud, driving real-time decision making across the organization. It empowers the retailer to pivot fast, to the latest trend and to always be ahead of its competitors, building on the accumulated breadth of information, collected, and used in a responsible, ethical, and trustworthy manner (i.e. doing it the right way). ?

Wisdom from Reinventions?

Each of the example mentioned shares a common thread, where retailers took a diverse set of data, turned them into differentiated insights, and used it to drive real business outcome. Retailers who can take advantage of the unlimited potential presented by data and cloud, are the ones delivering the most significant impact. To do this successfully, trends emerging around three dimensions are important to know:?

The Foundation, What We Do - Not See, Matters?

Data, the lifeblood of any company’s intelligence, helps provide the insights to become increasingly innovative, efficient, and closer to the customer. However, a retailer will not be successful unless it establishes a robust and agile data foundation that is analytics-ready and responsive to changes.??

Leading data & AI platform capabilities include:?

• Data collection, to gather and tie data from various sources in large volumes?
• Data science and advanced AI, to turn data into differentiated insights and products, responsibly?
• Robust data architecture, quality, and governance capabilities, to ensure integrity of output?
• Strong security and compliance??
• Scalability and flexibility to adjust and meet shifting demand??

Building The Team, In a Brave New World?

With enterprise digital transformations, demand for new talents and culture arise, to those who want to capitalize on new data-driven opportunities. Given the importance of data and analytics, companies must institute self-sufficiency on managing and capitalizing data as its unique asset.??

Leading talent and culture strategies include:??

• Acquire, grow, and retain an internal data “tribe.”?
• Establish a data-driven culture to guide and support all decisions.?
• Develop “ways of working” to allow technical and business teams to work seamlessly to transform data & insight to real impactful outcomes, responsibly?
• Where necessary, consider expanding or augmenting data and cloud capability with external support or M&A strategies?

Success Is a Virtue, Failure Is Not an Option?

The road to business glory is littered with countless transformations with value unknown or unmeasured. To succeed in an ultra competitive world, leading companies set and clearly communicate their value objectives, and their path to realization for each data and analytics initiative.??

Leading value realization stories include:?

• Business case and value underpinning each initiative?
• Alignment to corporate visions and objectives?
• Metrics and measurement processes to ensure accountability of outcome?
• Appropriate level of executive sponsorship and control of funding mechanisms?

First Step of the Journey?

It’s time to accelerate your data and cloud reinvention; don’t get left behind! At Accenture, we have helped hundreds of global leading retailers strategize, implement, and operationalized ways to leverage Data x Cloud driving differentiation and competitive advantage.? We combine deep retail industry expertise with proven technology assets including data-centric reference architecture, operating models, and AI-enabled retail analytics [4]. Such capabilities are supplemented with alliances & partnerships, including cloud providers. Please reach out for a strategic discovery with Accenture.?

Contributors: Debadipta Bhattacharya , Channey Kim and Bala Manickam

Note: The views expressed in this post are the opinions of the authors and are not representative of Accenture's opinion on this topic.?

?References?

[1] Retail Consulting. Accenture. Reset responsibly to drive profitable growth.??

Available July 25, 2022. URL: accenture.com/us-en/industries/retail-index?

[2] Data-Led Transformation. Accenture. Recognize the value of data to drive sustainable growth.??

Available July 25, 2022. URL: accenture.com/us-en/services/applied-intelligence/data-value?

[3] Cloud Services. Accenture. Get to value faster with cloud first.??

Available July 25, 2022. URL: accenture.com/us-en/cloud/services-index?

[4] Artificial Intelligence Services. Accenture. AI services and solutions to help you get more value from cloud.?

Available July 25, 2022. URL accenture.com/us-en/services/ai-artificial-intelligence-index?