AUTOMATION & Artificial intelligence (AI) has already had some impacts on the Consumer & Retail business environment. From chatbots to automated warehouses to driverless vehicles, what was once science fiction is now a reality.
Anson Bailey (ASPAC leader, consumer/retail, KPMG in China) and I recently discussed the topic with other executives from leading business in rhe consumer and retail industry at KPMG’s ‘Artificial Intelligence (AI): Taking Consumer and Retail Businesses to the Next Level’ seminar.
According to the Global Consumer Executive Top of Mind survey “No Normal is the New Normal: Make disruption work for your business” , conducted by KPMG International and The Consumer Goods Forum (CGF), some companies are now being much more ambitious.
Platform businesses, for example, already invest 13 per cent of their revenue in technology – compared to less than 5 per cent for the industry as a whole.
They are also significantly more likely to have already invested in AI, AR, VR, predictive analytics, open source platforms, wearables and chatbots.
In Asia, where mobile and online penetration is extremely high, ‘O2O’ or ‘offline to online’ customer experience is becoming mainstream.
Businesses are shifting from consumption to experience, and e-commerce and m-commerce continues to be on the rise. Social media marketing is thus playing an enormous role in retail.
In fact, from the recent KPMG CEO Outlook 2018, global CEOs have the highest trust for social media sources over all others.
Similarly in Thailand, there is a growth in new social media models driving e-commerce.
Moreover, there is a rising focus in experience and destination shopping, as well as substantial buying power in women, even in traditionally non-female categories. And even with convenience stores still shaping retail in Thailand, multi-channel sales are growing through e-commerce and personalized marketing.
According to Bailey, with the changes in consumer behavior and the emergence of new business models and technologies, businesses need to think outside the box if they want to stay ahead of the game.
Providing a holistic customer experience at a rate fast enough to cater to the on-demand needs of the rising new generation of consumers is key.
Businesses need to provide offline to online experience that is authentic and relatable to the consumers, whether through the use of innovation and technologies, co-creation and collaboration, and knowledge sharing between industry players.
With the fast pace of change, AI is playing a huge part in helping businesses stay ahead of the game, allowing for quick response and customizations to the emerging retail and consumer trends in each specific markets.
AI is currently used to analyze huge amounts of retail data, including demand-driven supply chains, insightful customer decisions, mapping customer journeys, improving store efficiencies and reducing operating costs.
The new retail business model is a reality. For example, China launched its chain of ‘cashier free’ stores and Amazon has recently announced ‘Amazon Go’ store that uses facial recognition to process payments. Other companies are looking at new ways to improve their distribution channel. JD.com, a Chinese e-commerce company, is looking at a deal that will see drones servicing 300,000 distribution points in rural China. So, even in remote areas, the impact of new technologies in retail is starting to be felt.
However, it is important that businesses understand that technologies and data needs to be utilized smartly, not just for the sake of adapting new technologies. Businesses need to reexamine their overall strategy and utilize these new technologies in such a way that aligns with their business goals, help them provide better experience for customers, streamline their operation and unburden their manual processes.
NITTAYA CHETCHOTIROS, Head of Consumer Markets, KPMG in Thailand.