I recently had a chance to speak to Todd P. Michaud, our new President and Chief Customer Officer of the Americas for Symphony RetailAI. I wanted to get a sense of what’s on his mind and what’s on his plate.
What it was about Symphony RetailAI that drew you to join?
I was familiar with many of the solutions that were a part of the Symphony RetailAI portfolio and was familiar with many of the clients as well. I have always been impressed by the company’s commitment to building out a retail-centric portfolio that was state-of-the-art that took advantage of a lot of the latest technology – particularly AI. When you look at the retail industry, a lot of retailers are saddled with legacy technology. As retailers look to the future, I think that many realize they need to significantly upgrade their technology capabilities. I believe that Symphony RetailAI is best positioned to help these retailers to transform their business. So, that’s a primary reason I joined the company.
How do you see AI enabling retail?
Consider the heart of AI. In retail, it’s almost always going to be based on customer demand intelligence and transactional data derived from point of sale and eCommerce systems. When you consider the volumes of data sources that retailers have, and the number of shoppers that they’re serving, it’s virtually impossible for time-starved humans to consider all factors when making vital decisions for the business. The premise behind AI is that it can help make the right choices about what products to have in the assortment, how to allocate store space and shelves, how to price products, which products to feature in a given promotion and at what sale price. AI can also help to ensure that the right inventory is on hand, and that prepared foods are ready just in time for an interested shopper.
Most retailers will tell you that one of their biggest traditional challenges is dealing with lost sales resulting from out-of-stocks, particularly on promoted merchandise. If you can eliminate out of stocks by just having a much more accurate forecast of what inventory needs to be in store and when it needs to be there, that’s a massive impact! Understanding shopper’s channel preference, being keenly aware of how to best serve disparate shoppers with different touchpoints, different techniques, different engagement, whether it’s physical or digital, these are all the promise areas of AI.
What do you believe are the biggest influences/trends happening in retail technology currently?
The way that the consumer shops has changed considerably over the past few years. Probably the biggest influence for most retailers is to diversify what used to be a POS-centric, in-store shopping experience into allowing shoppers to use new self-service, mobile, and eCommerce shopping channels to complement the in-store experience. As retailers make this digital transformation, they must know their shoppers much better. Retailers are expected to anticipate the needs of shoppers before they shop, while they shop, and after their shopping visit. This heightened shopper centricity influences all of the systems that retailers have come to depend upon.
This is part of the reason why many legacy systems fall short of the way retailers aspire to operate their business, as opposed to how they historically operated their business. Again, it gets back to your first question around why I came to Symphony Retail AI. Many retailers need to embrace digital transformation. Retailers now require an agile, modern portfolio that allows you to cater to the ever-changing customer expectations.
So, what’s your mission?
I’m here to help retailers successfully embark on this transformation journey. There are three main areas of primary focus for me.
First, the operations side of the retailer’s enterprise must evolve. I want to help retailers ensure that they have the right enterprise and supply chain systems to meet their future needs.
Second, we talked about the digital transformation and the focus on shopper centricity, and so I’m going to be very focused on personalized marketing and making sure that we help retailers serve the ever-changing expectations of the shoppers. I want to help our retailers make the shopping experience, whether in-store or online, as engaging as possible.
Third, it’s all about making sure that the retailer has the right product at the right place, price right, etc. This is where category management and merchandising capabilities are so essential. Do retailers have the right localized assortment? Are their products priced right? Do they have the right promotional offers in place? Are stores laid out in the most effective way, with respect of how to optimize the shopping experience?
To follow on what you mention above, tell us a little more about how you believe Symphony RetailAI can help retailers remain competitive and thrive.
The fact that we’re leveraging optimization, artificial intelligence, and we are delivering these capabilities on a cloud-centric platform to accelerate value is one thing. Our technology opens up possibilities around supply chain collaboration between retailers and their CPGs. Many companies still depend exclusively on human instincts to make all key decisions. Automation, optimization and AI can bring a lot of value to the table for these retailers.
For example, consider when retailers want to evaluate adding a new flavor to their assortment. Would that new flavor grow the category or cannibalize the other products already in the assortment? Our technology can tell you that. What happens when you go from 14 varieties of ketchup down to ten? Will it have any detrimental impact on sales? Or will the demand that was previously spread across the 14 varieties be reallocated to the reduced assortment? Our technology figures this out for retailers.
Demand forecasting and supply chain
Another major area where we can make a difference in the lives of retailers is demand forecasting and supply chain. All retailers want to reduce out-of-stocks because they can result in a 4-8% reduction of revenue because shoppers will go elsewhere. What if we can impact that? Retailers also want to avoid overstocks. Demand forecasting done right, leveraging AI, can reduce overstocks and free up working capital that’s tied up in non-value adding inventory, that’s inventory just sitting on the store floor for which the retailer is paying carrying costs. AI-based demand forecasting has the potential to reduce 20-30% of this non-value adding inventory. So, you get a double benefit. You grow sales that would have been lost due to out of stocks and, simultaneously, you can free up capital from not having inventory sitting around. On the surface, those two things happening concurrently may sound counterintuitive, but the right technology can do just that.
Take the whole Fresh area…produce, meat, bakery, deli, etc. Talk about the importance of having the right product at the right time! Ideally, shoppers want retailers preparing food right before they buy it – not too early, so it’s fresh. And, of course, there also has to be enough. Bottom line, our Symphony RetailAI solutions can help with these challenging categories. They help save money in inventory, avoid waste/spoilage, they bring retailers closer to their customers by having the right selection available and increasing loyalty.
Meet Todd Michaud at the upcoming Xcelerate Retail Forum in Boston, October 2 – 4, where you’ll be able to speak with him and other industry experts about how the latest technology can help you meet the challenges of today’s challenging retail landscape.