When the Covid-19 pandemic emerged in early 2020, it wreaked havoc on the retail industry as government-imposed lockdowns, travel restrictions and strict social distancing measures disrupted global supply chains and forced retailers to close their physical stores to keep customers and employees safe. While the virus is still causing widespread disruption, it has also acted as a major catalyst for adaptation, diversification and transformation in the global retail sector.
“Covid-19 is the new chief innovation officer,” says Shelley Bransten, worldwide corporate vice president of retail and consumer goods industries at Microsoft. “Retailers are no longer asking us what the Covid playbook is, but how can we go faster? The new world of digital shopping is as much about the visual presentation of the product, assortment and quality of recommendations as it is about shipping speeds, fulfilment options and the ability to personalise items. And it’s clear that retailers who laid their digital tracks early have weathered the storm of the past two years much better than anybody else.”
There have been many impressive examples of both digital transformation and innovation across the retail space. Walgreens Boots Alliance, for instance, has developed a virtual pharmacy consultation service via its app to enable pharmacists to remain connected to patients needing medical advice. Meanwhile, American sports equipment and clothing retailer REI partnered with Microsoft to create a new virtual outfitting service to help customers assemble bikes, find hiking boots and gear up for camping trips using Microsoft Teams. And, non-profit organisation National Chamber of Italian Fashion (Camera Della Moda Italiana) collaborated with Microsoft, Accenture and Optimizely to digitise Milan Fashion Week and host virtual cat walks, showrooms, sales campaigns and more.
“All three examples showcase not only the power of digital but also the high-level of digital optimism in the industry,” says Bransten. “This optimism reflects how brands and retailers are looking for ways to innovate and future-proof their business models with the Microsoft Cloud. Whether that’s hybrid work, future of the store, supply chains, sustainability, or cybersecurity, we’re seeing incredible innovation through digital technology.”
Data is also playing a pivotal role in empowering retailers to identify and capitalise on opportunities for transforming the way they operate and deliver products, services and experiences to customers.
“Petabytes upon petabytes of data are generated every hour – it’s essentially the demand signal for the world,” says Bransten. “No asset is of more strategic importance in today’s retail industry than data.”
Now that the volume, velocity and variety of data is growing, it is becoming more difficult for retailers to make sense of the information they collect. However, it is critical for them to find ways to mine it for actionable insights, says Bransten. “Retailers that are able to collect data and use artificial intelligence (AI) and machine learning technologies to extract valuable insights from that information can transform every aspect of their business,” she explains. “It helps them to streamline operations, improve employee productivity run efficient predictive marketing, understand customer behaviour and feedback, find new customers, and much more.
Microsoft partner Blue Yonder, for example, used Microsoft AI technologies to help its customers find alternate sources for $500 million worth of products and parts when a 1,300-foot ship blocked the Suez Canal in Egypt for 10 days in March 2021, disrupting global shipping supply chains.
Meanwhile, multinational coffeehouse chain Starbucks used AI technology to build Deep Brew, an in-house solution that analyses vast amounts of data to help the business identify opportunities for boosting operational efficiency.
“Starbucks’ use of data and AI is really impressive,” says Bransten. “Deep Brew combines information about Covid-19 case rates, consumer preferences and employee sentiments to provide managers with the data-driven insights they need to decide how to best operate their stores on a daily basis. For instance, data might suggest that it would be more efficient to ramp up drive-through, mobile order or delivery services rather opening stores fully.”
Microsoft aims to help retailers regain control of their data by democratising AI technology. “We believe in giving retailers freedom to use their data in any way they want,” says Bransten. “We’ve spent years developing powerful AI technologies they can use out of the box to build a holistic view of customers to personalise every interaction throughout the end-to-end shopping journey and build trust with authentic experiences across channels. They can do this while ensuring full control of customer data and unmatched data governance and privacy capabilities.”
To help retailers bring together data from disparate sources across the retail value chain and turn it into actionable insights, Microsoft has launched Microsoft Cloud for Retail. The platform leverages Microsoft 365, Azure, Power Platform, Dynamics 365 and Microsoft Advertising to help retailers deliver relevant, personalised experiences for customers across the end-to-end shopping journey while ensuring security and regulatory compliance.
“Brands and retailers worldwide are telling us loud and clear that they want to go faster and get more value out of both their data and their existing Microsoft investments,” says Bransten. “That’s why we developed Microsoft Cloud for Retail and why we’re so excited about the impact it will have on the industry.”
According to Bransten, Microsoft Cloud for Retail will empower retailers to do four important things: maximise the value of their data, elevate the shopping experience, empower frontline workers, and build a real-time, sustainable supply chain.
“Retailers will be able to unify disparate data and ecosystems across the entire shopper journey, uncovering insights and optimisation throughout,” explains Bransten. “By leveraging insights from this data and implementing new store technology, they will also be able to better engage with customers and enhance the shopping experience.
“Microsoft Cloud for Retail is also designed to equip frontline workers – which typically account for 80 per cent of a retailers’ workforce – with solutions that make their jobs easier and help them to provide amazing customer experiences. In addition, it will help retailers to connect data across their supply chains to identify issues and optimise performance, making them more sustainable.”
Microsoft’s partners are also building software and customised solutions running on Microsoft Cloud for Retail to offer additional business benefits for retailers. “We have an incredible ecosystem of partners that just keeps getting bigger and better,” says Bransten. “This network was one of the reasons I joined Microsoft and I continue to be impressed by how dedicated our partners are to serving retailers’ unique needs. I love the work they’re doing to both offer integrated solutions that extend our core cloud capabilities and identify new opportunities for innovation.”
Another innovation Bransten predicts will help retailers improve operations are low-code/no-code development platforms, which enable users to quickly build, test and deploy mobile or web applications with little to no knowledge of coding or traditional programming languages.
“This area really excites me because you truly see the power of technology with low-code/no-code apps,” she says. “I’ve spent plenty of time waiting for IT departments to help fix a problem, but now app development is being democratised and moving beyond professional developers into the hands of ‘citizen developers’. They include everyone from designers and marketers to salespeople, customer service professionals and others, which offers exciting opportunities for the future.”
Several retailers have already invested in developing low-code/no-code apps to improve processes and empower employees. Multinational clothing retailer H&M, for example, has built 1,500 apps that collectively have around 30,000 global users.
“H&M has transformed from a clothing designer with no previous coding experience to a pro developer looking for a faster alternative to custom coding,” says Bransten. “A prime example is the FLEXI app, which was designed to help H&M’s teams locate workers and understand their working hours after many employees transitioned to remote working across multiple locations and time zones.
“There are lots more stories like this – US-based office supply retailer Office Depot, for instance, has saved more than $100,000 by building over 30 apps with Power Apps. It has also created a Citizen Developer programme, allowing it to use Microsoft Teams to virtually train business users to leverage our Power Platform.”
Against this backdrop of constant innovation, Bransten predicts that retailers will need to become more agile to ensure they can quickly adapt and remain competitive as the industry continues to evolve in 2022 and beyond.
“There’s always something new for retailers to address and the industry’s speed clock has truly changed, so it’s critical that they can move fast,” she says. “That’s why the cloud is emerging as the business platform for the digital economy.”
Bransten recommends that retailers take inspiration from technology companies by adopting a growth mindset and building a culture that embraces and empowers innovation. “They should test new ideas and innovations, learn, and ‘blitzscale’ them if they prove successful,” she says. “To do this, however, they must implement a platform with the capabilities that help them run their businesses today and provide opportunities to innovate, grow and move in new directions in the future. That’s where Microsoft’s technologies become the key ingredients for their success.
“Microsoft’s mission statement is to empower every person and every organisation on the planet to achieve more. Microsoft Cloud for Retail is helping us to fulfil this goal by empowering retailers and partners to build their own tech intensity, so they can become independent with us, not dependent on us.”
Partner perspectives
We ask partners how they are using the Microsoft Cloud to help retailers and consumer packaged goods companies gain actionable insights from their data and transform their operations. Below are extracts from their responses, which you can read in full from page 164 of the digital edition of the Winter 21/22 issue of Technology Record.
Michael Klein, head of industry strategy for retail, travel and consumer packaged goods at Adobe Systems, said: “Leveraging cloud technology, the Adobe and Microsoft partnership gives retail and consumer packaged goods companies the tools needed to understand the customer journey, build a unified customer profile that considers online and offline activity, and deliver content in real-time that recognises the unique traits of that audience.”
Gijs Geurts, CEO of Anywhere365, said: “Anywhere365 fully leverages the Microsoft 365 ecosystem to help retailers create more efficient communications, drive digital transformations and streamline operations.”
Ted Combs, industry principal for consumer products at AVEVA, said: “AVEVA Insight delivers actionable information and AI capabilities anywhere anytime to help teams unlock critical data to improve agility, reliability and efficiency.”
Sankar Konduru, head of consulting solutions and innovation for Microsoft Biz Apps and Power Platform practice at Infosys, said: “Infosys REF-OR-M Smart Retail solution amplifies the capabilities of Microsoft Dynamics Retail for end-to-end management of point of sale and store operations.”
Alyssa Putzer, marketing communications specialist for Metafile Information Systems, said: “By integrating MetaViewer Paperless Automation with both Microsoft Dynamics 365 Business Central and Dynamics 365 Finance and Operations, we are helping retailers to gain insights form their data to make better informed business decisions and transform how they manage operations.”
Josh Schoonmaker, senior director of strategy for commerce at Optimizely, said: “Commerce teams can use predictive analytics from the Optimizely Data Platform to target the right shopper at just the right moment in their purchasing cycle.”
This article was originally published in the Winter 21/22 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.