2020: Retail as a Service?

Digital disruption is typically seen as a form of “waterfall innovation” – where a new entrant unseats legacy players by adopting a radical new approach to service delivery using technology (like Amazon leveraging its own cloud based e-commerce platform capabilities to beat incumbent Retailers on convenience and price). Yet a challenge to this view is that such disruptors are actually applying a form of “agile innovation”, where through incrementally developing their own live services they gradually transform and re-shape a market – a detailed look at Amazon finds its approach to customer service improvement is not disruptive but iterative; where over the last ten to fifteen years it’s used its own net revenues for R&D activities (not for short-term profit) to continually drive massive grow.

The implication is that a Retailer can exploit the competitive advantages of digital disruption by using an iterative service delivery approach – so what could be the benefits and challenges of this “Retail As A Service” model? Here are some ideas…

OpEx Funded Innovation – A major blocker to Retailers investing in digital transformation is that it can involve significant upfront capital expenditure to deliver a return in investment that is difficult to forecast and realise. Applying an “as a service” approach, an alternative could be to deliver small, incremental improvements using a portion of Retailer’s margin earned during the same financial year. No big financial risks, the Retailer can only invest what it earns from the market with the added benefit that such OpEx funded innovation can rapidly pivot to changing customer demands. Yet any slicing of margin will impact a Retailer’s profitability – its owners or shareholders would need to tolerate a different form of financial risk to make this approach acceptable; reduced, variable short-term profit for potential significant long-term gains.

Zero Physical Asset Operating Model – Could the application of a service-based approach to delivery be extended beyond the traditional areas of IT and back office transformation into other parts of a Retailer’s operating model? For example, a Retailer could run a “zero physical asset” business; where front-end services like stores, supply chain management, even sales staff resources are provisioned on a pay-as-you-go basis. A key benefit would be that the Retailer doesn’t run the risk of owning fixed term assets like property or technology that may become commercially unviable or obsolete. However, this would create new risks – a key one being that the Retailer becomes wholly dependent on other service providers’ availability and ability to innovate to meet its competitive needs.

If you would like more information about how digital transformation can benefit your retail business, leave a reply below or contact me by email.

“AI Neutrality”: A proposed manifesto for artificial intelligence user experience design

What makes a great artificial intelligence (AI) driven user experience? Here are my thoughts…

1. Design AI services end to end – the disruptors that have transformed the travel, holiday and retail sectors over the last twenty years succeeded by focusing aggressively on improving their own single channel online experience. AI user experience design must also adopt this strict one channel approach to service delivery – every user journey should be simple, relevant, no fuss and always getting better because it’s being delivered by an artificial intelligence end to end.

2. Go beyond mobile  The interconnectivity of AI enables any environment or physical object to positively affect all of our five senses (such as connected home technology like heating and lighting devices that responds to a user’s mood). AI design should always be pushing to transcend the user interface constraints of existing service platforms (particularly the visual and audio experience of mobile) to truly reflect and improve how we use our senses to interact with the world around us.

3. Addressable media is a key user journey –  AI has the potential to utilise a complex range of historic and contextual customer data to deliver targeted, personalised advertising – for example, UK broadcasters are adopting programmatic technology to deliver specific adverts at individual households in real time. Yet if designed poorly such disruptive engagement risks coming across like hard selling that overwhelms or irritates a customer (consider the negative reaction of customers to pop up web ads that apply a similar approach). Consequently, it’s vital that AI driven addressable media is treated as a form of user experience that requires research, design and testing to ensure customers are empowered to consume it on their own terms.

4. Hardwire ethics and sustainability –  the positive disruption to our lives from social media has enabled these services to grow rapidly and organically by billions of users worldwide. Yet this has also led to these platforms becoming so big it’s challenging for their service providers to effectively manage and safeguard the user content they share. Drawing from this experience, and combined with public calls for the proactive regulation of AI, it’s essential artificial intelligence products and services have the right ethics and sustainability values in their core design as they are likely to grow even faster and bigger than social media.

5. Champion “AI Neutrality” – artificial intelligence has the power to transform all our lives like the internet before it. A fundamental principle driving the success of the web has been “net neutrality” – that internet data services should be supplied as a form of utility (like electricity, gas, water) in a non-discriminatory way to all customers. Access to simple AI services should be similarly “neutral” – a basic human right that is complemented by differentiated, chargeable products and services from over-the-top producers.

If you would like more information about how artificial intelligence can benefit your business, please leave a reply below or contact me by email.

Artificial intelligence customer experience design: the frictionless theme park?

Many theme parks offer an additional paid service that provides a virtual queuing bot that gives the paying customer immediate access to a ride during an allocated time slot with minimum fuss. This can deliver a smoother customer experience while enabling the park operator further monetisation opportunities through differentiated ticket prices.

But such services are not perfect. For example, like real queues, virtual ones can still get filled up (so reducing availability of time slots), a customer can’t simply change their mind at the last minute and expect an alternative ride to be available at the same time and many of these systems don’t reflect other dynamic factors that could affect ride enjoyment like poor weather.

So how could Artificial Intelligence (AI) potentially address these challenges? Here are some ideas…

One opportunity is to apply retail thinking to personalise the end to end experience – via mobile, an AI could suggest rides to visit throughout the day based on a customer’s social media updates, current and expected volume/demand for an attraction and forecast weather. In “the background” (i.e. the Cloud), the AI is constantly analysing customer behaviour in the park to drive these suggestions to help manage the people flow through different areas and rides to minimise friction for all. This capability could also enable the operator to offer on the spot additional services (like offering the chance to immediately access any roller coaster ride for a small charge) to further delight and surprise a customer during their visit.

Conversely, such an application of AI may be counter to what an operator wants to offer – after all, exciting theme park experiences come from customers being spontaneous when choosing their next desired ride or attraction. Accepting such unlimited freedom is not possible – this still leaves the risk of friction (like boredom) when a customer is waiting for the next experience to become available. An AI could turn this “dead time” into an experience in itself – using it as an opportunity to send personalised media content and offers to a customer’s mobile or tablet to consume while queuing for a ride. Alternatively, the AI could create social events for people in the park to interact with each other like mobile gaming competitions or dating. Such services could also be linked to third party promotions to generate further revenue for the theme park operator.

These illustrative use case ideas are based on one key assumption – most customers visiting a theme park at the same time will follow the guidance or direction given by an AI consistently, even when it results in a lesser personal experience than intended (but results in all participants gaining mutual benefit). This notion that AI can effectively influence human behaviour at scale in one place (like a theme park) is a major challenge for Artificial Intelligence Customer Experience Design.

If you would like more information about how artificial intelligence can benefit your business, please leave a reply below or contact me by email.

AI Empowered retail roles: the new competitive advantage?

A Retailer can potentially use Artificial Intelligence (AI) to empower its people to analyse, transact and crucially sell faster and smarter to customers than its competitors. So, what might these jobs look like? Here are some ideas…

“Fixers” – Retailers are always looking to optimise their supply chain costs while improving the customer experience. A key pain point is last mile logistics – the need to offer increasingly timely, flexible delivery of goods to individual customers while maintaining the right economies of scale on distribution to achieve margin. A Fixer – possibly a third-party platform service provider – bids for and delivers instant solutions to solve these daily challenges. Their unique ability to use AI to continually optimise delivery routes and facilitate the sharing of local stock between Retailers (often competitors) to satisfy customer demand 24/7 places them at the heart of the Retail Sector in 2020.

“Instore Experience Trainers” – AI doesn’t innovate by itself; this advantage comes from people teaching or training it to deliver delightful and compelling customer experiences on any channel. An Instore Experience Trainer is someone who spends their working day testing different AI driven experiences from different Sectors and then uses this emotional insight to teach an Artificial Intelligence capability new ways to better engage customers instore – rapid human innovation scaled to differentiate thousands of individual customer interactions with a specific Retailer.

“AI Scanners” – As Artificial Intelligence grows so too does the opportunity for competitors to use it to analyse a Retailer’s offerings for strengths and weaknesses. An AI Scanner is monitoring daily how customers are engaging a Retailer’s Artificial Intelligence to identify such behaviour and its source to enable a proactive response to protect market competitiveness.

If you would like more information about how artificial intelligence can benefit your retail business, leave a reply below or contact me by email.

Artificial Intelligence: The new entertainment experience?

Artificial Intelligence (AI) can radically transform how we interact with a range of services, with Amazon’s Alexa being a notable example growing rapidly in popularity. But in what ways could AI disrupt how we use and consume entertainment? Here are some ideas…

Dynamic film narrative

An AI can use Machine Learning to find hidden insights in a data set to identify remedial action. This capability could be used to enable a film viewer to directly interact with a film’s narrative – pausing the action any time to tell the AI (or even the film’s characters themselves?) how they think and feel about the story. Sentiment that an AI can then analyse in the cloud to learn what an audience wants next that’s fed back to the content producer – greater plot exposition, more of their favourite characters or action. AI-driven blockbuster entertainment that never flops!

Game voice user interface

Natural Language Processing (NLP) enables an AI to understand and respond to spoken and written commands. In terms of a console gaming experience, NLP could transform such experiences. Rather than using a controller to direct and interact with non-player characters within a game, the player could talk to them directly, naturally – a new level of gameplay design that creates truly immersive experiences.

Personalised content maker

AI’s ability to analyse massive amounts of data from potentially any source is enabling deeper, richer forms of Personalisation. Could an AI use this capability to create brand new content (stories, images, even films or music) to an individual’s specific tastes and mood? On demand entertainment that always delights, never gets boring or ends – the perfect TV channel you won’t want to switch off!

If you would like more information about how artificial intelligence can benefit your retail business, leave a reply below or contact me by email.

Intelligent personal assistants: an opportunity for retailers?

Alexa is arguably the tipping point for intelligent personal assistants; with Amazon’s open source approach to sharing its app (“skill”) development capabilities the sky’s the limit for this new, disruptive form of natural language driven customer experience. But what could retailers make of this opportunity? Here are some ideas…

It’s not the hardware but the cloud analytics that matters

Critical to any retailer using an intelligent personal assistant to innovate their brand is that these use cases should primarily focus on the business outcomes from using its cloud analytics capabilities, not the front-end device itself.

A retailer, for example, could use Alexa to provide instore guidance to shoppers to help them find items or make simple queries, physical customer browsing behaviour captured in the cloud that when combined with online experiences enables deeper, more contextual forms of personalisation across all this retailer’s channels.

An opportunity to simplify (and risk of complicating) customer journeys

A unique strength of an intelligent personal assistant is that it has the potential to smartly rationalise customer queries and transactions – an opportunity to turn chatbots into compelling conversational experiences a customer would have a preference for using over engaging a person or using a digital channel.

But there remains a significant user experience design challenge for its natural language driven interface – at what point does the buying journey become too complex for this channel and risks increasing friction for a customer? Any form of customer experience that requires a customer to look at detailed product information or make comparisons between products could be difficult and hard to follow through spoken voice generated content alone.

Alexa’s use of APIs could enable a retailer to combine this channel with its mobile e-commerce site (or in-store tablets) for example to create a seamless, holistic experience where complex information is shared visually driven by a customer’s voice commands and smartly informed by Alexa’s AI.

Bricks and mortar as a truly experiential destination

Perhaps the most exciting thing about Alexa (and intelligent personal assistants in general) is the potential for them to create unique, personalised experiences instore – a direct, deep relationship between a customer and a retailer’s brand. And because its cloud driven this enables interconnectivity (IoT) with other instore technologies such as targeted digital signage, interactive mirrors, social media engagement and mobile point of sale.

If you would like more information about how digital transformation can benefit your retail business, leave a reply below or contact me by email.

Shopping with Artificial Intelligence: The frictionless family customer experience?

With Amazon, Facebook and Google all adopting an open source approach to development of their artificial intelligence (AI) services, what could this innovation mean for a family shopping on the High Street? Here are some ideas…

An end to Saturday morning parking mayhem – having to spend half an hour queuing to get into a shopping centre car park only to find out the only spaces left are on the hundredth floor can be a miserable start (and end) to a Saturday shop for the whole family.

An AI personal assistant could reduce the friction of this inconvenience by reserving a suitable car parking space at the shopping centre in advance, based on the family’s store preferences, accessibility requirements and other factors, like forecast weather. It can then send the reserved space location to the family’s in-car GPS and automatically pay for its ticket. The more an AI can effectively integrate or communicate with other systems the greater the convenience for customers.

No more bored kids looking at their mobiles – the family have spent hours traipsing from store to store failing to be engaged by any of these retail experiences. The kids are just itching to get their phones out to start socialising with their friends, and mum and dad are getting the feeling they are better off buying online.

An AI could transform the friction of this irrelevant customer experience by giving in-store products ‘personality’ –  a product can introduce itself using spoken voice to these customers (via a store branded mobile app for example), talk about its unique selling points and answer potentially any question about its suitability – all personalised using buying and social insights the AI has about the family. The more an AI can effectively apply analytics to create experiential, contextual shopping experiences, the more compelling and delightful bricks and mortar stores become for customers.

Empowered shopping without added wrinkles – So the family have found things they need and discovered lots of things they want, but mum and dad aren’t comfortable with uncontrolled spending across their bulging wallet of bank cards.

An AI could help remove the friction of this uncertainty by acting as a single channel for these customers to manage their disparate bank services in one place, giving on the spot advice about saving and spending to enable the right purchasing decisions and provide a secure, easy to use payment system using customer voice recognition (biometric authentication). The more an AI can create a platform that combines and simplifies a range of complex services; the better mobility customers have on the High Street – experiences that rival anything offered by online retailers.

If you would like more information about how digital transformation can benefit your organisation please contact the Sopra Steria Digital Practice.