Digital Transformation & the Future of Retail

ShiSh (twitter: @5h15h)Audrey Piquemal [email protected]

Retail Industry Solutions DirectorMicrosoft Corp

Technological innovations and a hyper-

connected world have significantly

influenced consumer behaviors and

expectations.

Shift to Direct to

Consumer

Changing

Demographics

Legacy Systems

& Silos

Lifetime Customer

Engagement

More Informed

ConsumersBlend of Physical

and Digital

GLOBAL RETAIL & CONSUMER

GOODS INDUSTRY

EXPERIENCING DISRUPTION

VALUE ADDED SERVICES

CURATE &

SUBSCRIBE

BORROW vs BUY

MASS CUSTOMIZATION

INSTANT

GRATIFICATION

SELLING

EXPERIENCES &

LIFESTYLE

Digital Transformation in Retail & Consumer Goods

Digital transformation is essential to sustaining a competitive advantage

ENGAGE YOUR

CUSTOMERS

in a personal and

relevant way

EMPOWER YOUR

EMPLOYEES

to deliver

differentiated service

OPTIMIZE YOUR

OPERATIONS

to evolve forecasting

and react faster

TRANSFORM

YOUR PRODUCTS

and deliver new value

to customers

5


ENGAGE YOUR

CUSTOMERS

in a personal and

relevant way

EMPOWER YOUR

EMPLOYEES

to deliver


OPTIMIZE YOUR

OPERATIONS


and react faster

TRANSFORM

YOUR PRODUCTS


to customers

6

REAL-TIME INVENTORY

MANAGEMENT

Delight your customers with personalized experiences

Connect with customers at the right time, right place

with the right offersby gathering data from various points of customer contact to

understand customer behaviors and respond with

relevant offers

Predict what customers want before they tell youusing predictive analytics solutions to create relevant cross-sell

and upsell opportunities throughout the customer journey

Deliver engaging experiencesby combining technologies that give customers rich information

when they shop online with the in-store experiences of trying out

products and engaging with informed sales associates

Integrate click-and-collect

and customer wish lists into

inventory decisions

NEW!

20%OFF

Send real-time offers &

notifications based on

customer location

REAL-TIME OFFERSRetail App

Enjoy

20% Off Our New

Line when

you buy 2

items

Enable information-rich

experiences in store

DIGITAL/PHYSICAL INTEGRATION

Retail App

Other

colors

available

ORDER PICKUP

PURCHASE

Boots $

BUY

WISHLIST

WISHLIST

Retail App

Welcome

valued

customer!

Collect data through customer opt-in to

personalize the shopping experience

PERSONALIZATION CLICK &

COLLECT

Mobile Engagement in Retail

Foodservice retailer increased revenue with a cloud-based mobile solution

Challenge

• Inability to identify or

connect with customers.

• Lack measures of

customer loyalty.

• Untargeted promotions

erode revenue and

profit.

Solution

• Added an analysis and

insights system based

on Microsoft Azure.

• Gathered data on

customers’ behaviors

and preferences to

target offers.

Benefits

• Expanded reach to millions of

customers in five countries.

• Enabled personal, relevant,

contextual content that adds

value for the users.

• Improved promotion efficacy.

“The company saw a huge increase in customers, and those customers

spent 47 percent more. It was all driven at the device level.”

— Scott Bradley, CEO and founder of Plexure (Vmob)

Unable to identify or connect with their customers

No measures of customer loyalty

Untargeted promotions erode revenue & profit

Reach Use

Conversion rate

7xSales

Increase in ‘tray value’

47 %2xTraffic

Reach customers

Increase loyalty

Increase promotion efficacy

Visible Light CommunicationIn-store lighting pulses

Visible by mobile device cameras

Instantaneous

12” horizontal location accuracy

18-24” vertical location accuracy

14

Foot Traffic Tracking Thin, pressure sensitive mat

Easy setup

Up to 25 2’x2’ squares per transmitter

Cloud based dashboard

Chatbots &

Retail

Digitize the

Real World

Microsoft Confidential, For Internal Use Only

20

Robotics in

Customer Engagement

22


ENGAGE YOUR

CUSTOMERS

in a personal and

relevant way

EMPOWER YOUR

EMPLOYEES

to deliver


OPTIMIZE YOUR

OPERATIONS


and react faster

TRANSFORM

YOUR PRODUCTS


to customers

23

Empowering Employees with Chatbots

Inventory

Demand Forecasting

Next Best Action

Merchandizing

Manager

Workflow

Prescriptive Analytics +

Bot Framework

Hi Nancy, I noticed that some of these products may fall below forecast unless we run a

promotion on them:Women's Cargo Capri’s

Women's Floral Top

Women's Yoga Tee

Thanks for the notification SalesBot, lets run a promo on them, what do you recommend

will drive the best ROI?

I determined that running a sale this weekend for 15% off on these will drive the most

optimal results on Store performance. Can I go ahead and use the Discount App to run the

sale?

Yes. Go Ahead.

Cognitive Services in

Retail

Robotics in

Employee Empowerment


ENGAGE YOUR

CUSTOMERS

in a personal and

relevant way

EMPOWER YOUR

EMPLOYEES

to deliver


OPTIMIZE YOUR

OPERATIONS


and react faster

TRANSFORM

YOUR PRODUCTS


to customers

31

Listening to the voice of the customer

0

5

10

15

20

25

30

1995 1996 1997 1998 1999 2000 2001 2002

Sales Forecast in 1999

Film Cameras Digital Cameras

0

2

4

6

8

10

12

14

16

18

20

1995 1996 1997 1998 1999 2000 2001 2002

What Really Happened

Film Cameras Digital Cameras

Retail has a multitude of devices that generate petabytes of potential

insights

Monitoring and mining social media data enables

retailers to enhance customer insights

Open data sources and internal sources enable

retailers to better understand customers

Democratization of data

AI/ML

AutomationPrescriptivePredictiveDescriptiveDashboardsReporting

Analytics

What's Happening Now What Will Happen What Should Happen

Optimize your forecasting and react faster

35

Increase loyalty and share of wallet through hyper-

local assortments and inventory

with scalable cloud solutions that take advantage of data, such as

social and weather, to complement existing demand signals

Improve management of merchandise allocation

across channels

with data-driven understanding of what will sell, when, where

and to whom

Enable forward-thinking, agile pricing

and promotions

with analytics capabilities to predict optimum pricing and quickly make

changes as needed

FALL LINE

SEARCH

Twitter

Love these

shoes!

#Retailer

Retail App

JacketBoots

Dress

$$

$

TOTAL: $$$

Sept Oct Nov Dec

Furnishings importer delighted customers with the right offers

Challenge

• Give customers a better

experience and

selection.

• Understand what

customers are looking

for based on online

search.

Strategy

• Combined online and

in-store transactional

and behavioral data

to predict what

products customers

would be most likely

to purchase next.

Results

• Provided more personalized

choices to customers.

• Enabled targeted campaigns.

• Improved inventory management.

“We are continually getting better at identifying what our customer wants, using

Microsoft Azure Machine Learning and resulting data insights.”

— Sharon Leite, EVP Sales and Customer Experience, Pier 1 Imports

37

ENGAGE YOUR

CUSTOMERS

in a personal and

relevant way

EMPOWER YOUR

EMPLOYEES

to deliver


OPTIMIZE YOUR

OPERATIONS


and react faster

TRANSFORM

YOUR PRODUCTS


to customers

38

Ambient Commerce

Data is the new Oil: Driving New Business Models with Data

Filling Gaps in Customer Insight

There are only four people/organizations in the world who know my location at all times: my wife (because I tell her), Apple (because Siri), the NSA (because NSA), and now Uber.Since the service Uber has built is so convenient, and increasingly essential to my life, Uber knows where I live, where I work, where I eat, where I travel, where I stay/visit and when I do all these things.

-Ron Hirson, Forbes

• Cellphone data from 2007 shows how the

population density of coastal towns like Biarritz

and Bayonne shoots up by 50 or 60 per cent on

public holidays.

• On normal weeks, France pulses like a beating

heart, its people clustering into Paris from

Monday to Friday, before heading out into the

countryside on weekends.

• accurate, up-to-date data on population

movement across the nation could help public

transport agencies plan services, or help event

planners manage large crowds that flock to

concerts

• Understanding such movement in countries like

Sierra Leone, for instance, would let

epidemiologists halt the spread of disease, or

get help to where it is needed in disasters.

Correlations using Credit Card Data

Identify Areas where Customers Come From based on credit card spending patterns

Build Profile using credit card patters. Identify churn patterns.

Connected Vending Machines: Diji-Touch & MondelezIoT, Machine Learning

Event Hub

Stream Analytics

SQL

Microsoft Azure

Connected Fitting Room

46

Delivering enhanced shopping experiences to customers

Objectives• Increase customer

service and personalization

• Grow perception of innovation

Tactics• Connected Fitting

Room pilot in stores

• Associate productivity with tablets

• Assisted selling kiosks in stores

• Guided selling for mobile devices

Results• Increased insight into customer

“likes”

• Improved sales performance by

equipping associates with easily

accessible information

• Extended support for customers

through immediate catalog

access

How

Blockchainwill impact Retail

48

Secure

Shared

Distributed

Ledger

Blockchain is a secure, shared, distributed ledger

Using the Blockchain to verify Authenticity

49

Genuine

Blockchain Verified

50

Luxury Retail

•Battle against Counterfeit Goods

•Diamond certification and transaction history

Grocery Retail

•Food Pedigree

•Supply Chain Transparency

•Ethical Farming & Fishing

Electronics Retail

•Keep Product Warranties up-to-date and transferable

Supply Chain

•Supply Chain transparency

•Make Supply Chain data become searchable and accessible to shoppers

Shipping

•Modernize Bill of Lading using Blockchain

Blockchain for

Product

Pedigree

RFID Real Time

Inventory

In-store Traffic

Analysis

Digital Wallets

Retail Mobile

Shopping

Electronic Shelf

Labels

Chatbots

Workforce

Analytics

Algorithmic

Merchandise

Optimization

Cognitive

Expert Advisors