Frontline workers play a crucial role in the retail industry. Whether they are refilling stock, helping customers with their needs or finalising purchases at the checkout, thousands of fashion, food and consumer goods businesses around the world rely on them every day.
However, Microsoft’s 2023 Work Trend Index report discovered that one in two frontline workers cite being burned out in their job. This is having an impact across the industry in the form of labour shortages and employee retention challenges.
According to Anya Minbiole, global business strategy lead for worldwide retail and consumer goods at Microsoft: “The working age population is getting smaller and there is a burden on younger generations to fill positions.
“Furthermore, key performance indicators such as a sales revenue-to-work hours ratio can push retailers into asking employees to work harder and more efficiently, despite barriers such as high employee turnover rates and the growing divide in technology know-how.”
Anya Minbiole is global business strategy lead for worldwide retail and consumer goods at Microsoft
Retailers are counting on artificial intelligence to come to the rescue.
“Generative AI is becoming increasingly pivotal in shaping the retail landscape,” says Minbiole. “This transformative technology is not only enhancing customer experiences but also streamlining operations, from personalised shopping to inventory management.”
The combination of AI and the cloud can deliver significant benefits: easing communication between colleagues, making important data available in real-time and removing some of the time-intensive tasks that workers face daily.
Microsoft Cloud for Retail can provide a unified data platform for retailers to use across all their stores and headquarters. With a holistic view of their data, these organisations not only gain access to actionable insights but also adopt other AI-enabled tools easier.
Those tools include the new templates designed for retail organisations in Microsoft’s Copilot Studio, which, for example, can be used to create customer service or human resources chatbots for their employees. Through natural language and real-time data collection, frontline workers get instant answers for questions on operating procedures, policies on topics such as product returns and more.
Microsoft partners are also working to develop their own tools that integrate with Microsoft’s offerings. Sitecore OrderCloud, for example, unifies customer profiles and order data, providing frontline workers with a better understanding of the people they serve daily and what they are seeking.
Better for everyone
Retailers considering the value of investing in AI tools for their frontline workforce need to consider the benefits it would bring to employees, customers and the business overall.
“Retail is a people-oriented business,” says Minbiole. “Employees are the largest asset on the balance sheet for a retail organisation, and that asset needs to be used in the most efficient and innovative way to keep your purpose alive and thriving.
“A human-centred strategy powered by technology enables employees to develop their business’s intellectual property by using AI to bring their own insights back into the company’s decision-making process.”
In central and eastern Europe, footwear retailer CCC Group has realised these benefits. Frontline workers from around 800 stores previously used email to communicate, manage tasks and share reports. This caused problems when it came to gathering and distributing information such as store feedback.
CCC Group’s solution was to set up a global Teams channel for company-wide communication and feedback. Regional and store-specific operational channels were created for daily tasks, reports and surveys.
The firm also consolidated frontline employee support in Teams. This allows employees to ask questions in a designated chat where an expert can quickly respond, removing the need to worry about having the right contact information or email address. This has not only streamlined communications for frontline workers but has also improved sustainability. Previously, key information would be printed off by the store manager and distributed to the staff, but now with Teams running on employee devices, there’s no need for paper copies, saving an estimated $500,000 annually.
CCC Group is using Microsoft Teams to support communication between its stores and its frontline workers
A symbiotic relationship
AI can be deployed to assist, rather than replace, human colleagues and augment their natural abilities, such as decision making.
In 2022, Minbiole wrote that “more than half of retail workers in non-management positions reported not feeling valued as an employee. These challenges represent an important opportunity for retailers to better equip, develop and engage the workers most critical to their success and survival”.
Microsoft conducted research in 2023 to better understand what frontline workers are seeking from AI tools. The most popular response was the opportunity to find the right information they need in the moment to make decisions.
Reflecting on this, Minbiole states: “Put simply, they want help finding answers.
“They want AI to help them speed up administrative aspects of their work, such as scheduling and task management. Essentially, they want help automating components of their work that take up too much time.”
A study from Bain found that there is a 95 per cent correlation between decision effectiveness and financial performance, while a study from McKinsey found that managers of a typical Fortune 500 organisation may waste more than 500,000 days a year, equivalent to $250 million in wages, on ineffective decision making.
“Technology empowers retailers to automate decision intelligence, which provide their workforce with the best next action to take from within their workflow,” says Minbiole. “Besides being more relevant, transparent and auditable, decision intelligence improves predictability and resiliency by accounting for uncertain factors.”
One retailer that is taking this into account is British supermarket chain Sainsbury’s, which recently signed a five-year strategic partnership with Microsoft to adopt new AI solutions.
Sainsbury’s will use Microsoft’s cloud and AI solutions to provide its colleagues with real-time data and insights that support key processes such as shelf replenishment. Employees will be guided to the shelves that need restocking, saving time and allowing them to focus on customers and other important tasks.
Sainsbury’s is using Microsoft’s AI tools to provide its workers with real time store insights
Accessible for all
The diversity of the frontline retail workforce means retailers have to ensure they are inclusive when deploying new tools and technologies for employees.
“On the one hand, the oldest and youngest workers struggle when technology doesn’t ‘just work’, they don’t expect their day to be impeded by technology,” says Minbiole. “Meanwhile, the generations in between have learned to modify how they work to adapt to technology and have gained technical know-how along the way.”
To ensure that AI tools can be used by any employee, a human-centred approach is key.
“It is a complementary perspective in which humans and AI are partners that balance out each other’s weaknesses,” explains Minbiole. “Generative AI tools allow retailers to hire early-in-career employees who can use the business’s apps to quickly onboard, become productive and contribute to the company’s experience base, whilst also allowing experienced employees to have a broader and more engaging range of responsibilities by using AI to complete tedious work.
“By removing the ‘user interface’ altogether and replacing it with a more natural way of working, retailers can sidestep the tensions stemming from the vast generational differences in workstyles.”
This approach has been integrated into Microsoft’s offerings for the retail industry, including Teams.
“We’ve worked hard to build Teams into a platform suitable for every worker, including those on the frontline,” says Minbiole. “There are of course the basic tools that apply to every worker, including chat and call capabilities, but there are also specific tools for frontline workers including simplified home screens, shift and task management and push-to-talk communications.”
When developing the right experience for frontline workers, Microsoft focuses on three key goals: secure, simple and smart.
“At the foundation, frontline experiences need to be secure no matter what their device is,” explains Minbiole. “It also needs to be simple, and give employees everything they need in one place. Finally, to really upgrade their productivity, they need smart capabilities integrated directly into their everyday communication tools.”
Aside from generational gaps, there are also concerns from smaller enterprises regarding their ability to adopt AI due to budget or size constraints, or questions about the value they would receive out of it.
According to Minbiole, “it’s not about the size of the organisation, but rather its agility and focus in applying technology strategically to further the business strategy”.
“Deploying AI is not about technology itself but significantly more about the people involved,” she continues. “While a small amount of the AI adoption effort goes into algorithms and system integration, a substantial amount of the effort must focus on transforming people, processes and culture. By focusing on this, retailers can not only survive but thrive.”
Partner perspectives
We asked selected Microsoft partners how they are utilising Microsoft technology such as generative AI to empower the retail workforce
“Celonis is a top-tier partner of Microsoft and its solutions are available on Microsoft Azure marketplace,” says Griffin Banta, senior valued engineer for applied AI at Celonis. “From an engineering perspective, Celonis integrates with Microsoft Power BI, Power Platform, Teams and Dynamics to deliver industry-specific capabilities to retailers.”
“Partnering with Microsoft has allowed Kyndryl to help retail customers extract the most value out of their data,” says Edgar Haren, associate director of offering management at Kyndryl. “We can architect a performant hybrid cloud ecosystem that extends from Azure to on-premises, enabling us to modernise customer workloads with public cloud capabilities, while bringing the cloud into retail stores to deliver a connected digital experience with Azure Stack HCI.”
Read more from these partners in the Summer 2024 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.