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Holiday shoppers have an infinite digital world of products available for viewing at their fingertips. Stepping into a brick-and-mortar store seems to have lost its appeal. In reality, 85 percent of customers still preferred to shop at physical store last year according to Time Trade.
Though that’s positive news for brick-and-mortar retailers, many brands still aren’t doing enough to meet consumer demands that rival the online experience. Last year, our research showed only a small percentage of retailers met consumer’s expectations. Consumers wanted retailers to better understand the context surrounding their purchases, and wanted shopping to be more convenient and the experiences more consistent.
We anticipated retailers who could survive this unsettling time in the industry would use the cloud and cognitive systems to connect data, devices, people and processes to be more relevant and responsive to customers. That prediction is playing out in the industry much more quickly than we initially thought, but cognitive computing or artificial intelligence is becoming the secret tool helping to transform and enhance the consumers’ shopping experience this holiday season.
Cognitive computing learns over time from previous interactions with customers and business partners, then forms hypotheses based on those experiences in near real time and at scale. The technology comprehends both structured and unstructured data, such as images and videos, and also understands and reasons the world the way humans do — through senses, learning and experience.
Almost all retailers recognize the value of cognitive.
In a recent IBM Institute of Business Value (IBV) study 94 percent of retail executives said they intend to invest in cognitive capabilities moving forward. And 91 percent of those same retail leaders also believe cognitive will play a disruptive role the industry, affecting how retailers better engage with shoppers, differentiate their merchandise and adopt a culture of experimentation.
For example, Staples is taking advantage of cognitive computing in its “Easy Button,” enabling small and medium businesses to transform how they shop for everything they need for their offices.
The Staples Easy System integrates IBM Watson technology to simplify office supply management for its Staples Business Advantage Customers and brings the “on-demand” world to businesses, allowing customers to order anytime, anywhere, from any device they prefer. By tapping into the IBM Watson Conversation service, Staples customers can easily order office supplies via Staples’ proprietary next-generation Easy Button, through the app, text, email, over Facebook Messenger or with a Slackbot.
The proliferation of connected devices and mobile phones, coupled with voice activated technology and chatbots, provides retailers like Staples with new avenues to both recognize what customers want to order in an easy way, and to produce the data necessary to analyze and further understand those shoppers.
Cognitive technology can identify patterns in structured information, like purchase history, as well as unstructured data, such as call center feedback, which allows the systems to quickly respond to common requests like product availability. Cognitive provides retailers like Staples with more-informed, actionable insights to optimize inventory, promotions and layouts during the busiest shopping season of the year.
Retail and consumer product companies recognize they must be agile, provide unique products, services and shopping experiences to keep existing customers — or risk losing market share this holiday season. That’s why we put together a point of view exploring recent industry trends and pain points with huge implications for retailers. Some topics explored in the study are:
- What does a digitally transformed physical retail store look like?
- How can data science influence merchandising?
- What can retailers do to move from being reactive to shoppers needs to immediately giving them what they’re looking for?
- How will the Internet of Things (IoT) affect retail, particularly with streamlining global supply chains and fulfilling on demand?
- How can cognitive systems enhance every function of the retail enterprise to respond to emerging trends and real time changes in demand?
Retail and consumer product companies must make the shift from being product-centric to customer-centric by putting consumers’ needs and wants at the heart of everything they do.
This holiday season, innovative brands will use cognitive computing and analytic capabilities to reveal unparalleled insights and distinguish their brick-and-mortar shopping experience from the huge number of online competitors and digital entrants. For retailers to be prepared this holiday season and beyond into 2017, read our study and start planning for the future, today.
To learn more about the new era of business, visit ibm.com/cognitive.
This story first appeared on Forbes.com.