The Crunch: Retailers are quickly recognizing the untapped potential that lies beneath the heaps of data they’ve been collecting in recent years. Watson, the learning supercomputer created by IBM, possesses the ability to make sense of previously unstructured information, and companies are leveraging this data to improve efficiency across their operations. The role of the storefront associate is evolving as machine learning technology frees them up to focus on engaging with customers. The knowledge unlocked by Watson is helping employees do their best work, which translates to higher customer satisfaction and a healthy bottom line for retailers using IBM’s cognitive capabilities.
In the early 1800s, a group of English textile workers known as the Luddites raged against the machines, fearing technological advances would threaten their livelihoods.
At the time, the Luddites’ fears may have seemed reasonable, but history has proven the opposite to be true. Technology has only made jobs easier, creating a society with more time for hobbies and leisure. A similar skepticism, this time around artificial intelligence, exists today.
After what we saw in our visit to the IBM booth at the National Retail Federation’s Big Show in New York City, it’s evident that Watson, IBM’s learning supercomputer of Jeopardy fame, is not a threat to retail employees’ jobs. Instead, it’s using data to make their jobs easier and empowering them with a unified view of inventory and store operations — information they need to deliver improved customer experiences.
“AI and machine-learning technology has been around for a really long time, but I think what’s really exciting is, instead of trying to replace a retailer or a marketer, we’re actually helping them make better decisions,” said Jay Henderson, Director of Offering and Product Management at IBM. “You’re almost giving them a new employee … a trusted adviser.
“It’s man plus machine working together, and that paradigm of interacting is really going to help drive the next wave of adoption and make this kind of technology mainstream.”
— Video Credit: IBM
The overarching benefit retailers are seeing from Watson is its ability to make sense of unstructured data. Retailers know how important data is to their success, with many of them collecting as much of it as possible in recent years. In fact, around 90% of the world’s data has been created in the past two years, with an estimated 2.5 billion GBs of data gathered each day.
“Eighty percent of the world’s information resides in unstructured form and has been invisible to IT systems until now. This is the breakthrough that Watson represents,” said Mark Yourek, IBM’s Global Retail Solution Lead. “Watson is a collection of cognitive capabilities that can access, ingest, digest, and understand unstructured data in all kinds of forms … and assimilate it into a growing body of knowledge.”
Every new bit of information refines how Watson looks at complex issues, helping it to recognize patterns unseen by human eyes. Teaching Watson through inputting data is an iterative process, but it’s one that yields far-reaching benefits for retailers and their workforce.
From Ad to Actuality, IBM Made The Easy Button™ Real for Staples
One B2B retailer that’s already seeing the benefits of IBM’s Watson is office supply company, Staples.
You might have seen Staples’ popular ad campaign from 2005 that featured the “Easy Button.” In the commercials, an office worker pushed a red button and the task at hand would magically be resolved. Recognizing emerging technology that incorporates voice and image recognition, the folks at Staples decided to turn the Easy Button into a reality.
Using Watson and an iterative process of data analysis, Staples developed the Easy System, which allows businesses to more efficiently order supplies through their choice of an Easy Button device, mobile application, text message, email, Facebook Messenger, or Slackbot. Users can also just as easily access shipping information or customer service from wherever they are with voice and image recognition.
We spoke with Faisal Masud, Staples’ Chief Technology Officer, in New York City, and he told us the genesis of the Easy System came as the company was looking at what to do with the massive amount of data it had accumulated. Since Watson is a learning computer, the Staples team is feeding it a lot of information and refining processes based on results.
“The engineering team that works on it literally is looking at every request that’s coming in and learning what we got wrong,” Faisal said. “There’s a confidence factor on whether it should answer the question or not, and if it doesn’t, it goes into a queue to resolve the data.”
Recognizing past purchase patterns, the Easy System improves with each supply order. For instance, if an office worker pushes the button and says, “I need blue pens,” Watson knows which brand of blue pen their company prefers and what a typical order size looks like. Faisal said the goal of the Easy System is to make orders so seamless that it frees up employees to do higher-level tasks like focusing on improved customer service.
“They won’t be wasting time on the little things, and they’ll be faster at serving the customer,” Faisal said.
The Staples Easy System is being alpha-tested by a small group of Staples Business Advantage customers in Austin, Texas, with plans to expand to 100 more customers in the coming months.
Watson Reasoning is Helping Retail Companies Make Better Decisions
Retailers are realizing the benefits machine learning and big data can bring to every phase of their businesses — from delivering unique methods of engaging with customers to removing inefficiencies from store operations.
Watson takes massive amounts of unstructured data, recognizes new patterns, and turns it into actionable information that retailers can use to boost their bottom lines while helping employees accomplish more.
Personalized Customer Experiences Across Every Channel
The most consumer-facing aspect of Watson’s value for retailers is helping to engage with and market to customers in a consistent way across each interaction. Achieving a well-developed single view of your customers goes a long way in tailoring your messages to them to drive purchases.
Watson uses transactional and social media data to help companies build brand loyalty through more effective employee interactions with consumers. Employees benefit from a single view of a company’s inventory, whether they’re selling online or in-store, so they can always deliver accurate information to customers.
— Video Credit: IBM
Machine learning improves marketing efforts by uncovering customer insights to deliver personalized promotions and analyzing data to find out what strategies are delivering the highest returns on investment in marketing. Each customer is unique and responds differently to marketing. Knowing the ideal time and medium to deliver a message to each client helps a retailer’s marketing team boost conversion rates and keep customers coming back.
Insight-Driven Merchandising & Real-Time Supply Chain Visibility
Understanding customer preferences and social trends through data analysis can be leveraged by merchandisers both online and in-store to keep products flying off the shelves. Watson helps retailers improve the decision-making process by making sense of the information. With these insights, merchandisers know what customers want to buy and the types of promotions and pricing they’ll respond to, which ensures a retailer stays competitive and profitable.
Watson also gives retailers a supply chain platform that cuts operational costs and helps employees fulfill orders in a more efficient fashion. Companies using IBM’s retail solutions receive real-time visibility into their inventories and ensure products remain in stock, helping customers receive orders quickly.
Streamlined Back Office Operations Improve Efficiency
Customer experience is mostly based on what happens in the front of stores, but what’s happening in the background is just as important. From finding the best talent to using visual dashboards to measure performance, IBM helps back-office employees stay organized while keeping administrative costs low.
Collecting customer data is important to a company’s success, but keeping that data private is equally important to maintain the trust level that clients expect. IBM’s retail solutions ensure IT departments have the ideal infrastructure and security they need to avoid data breaches and deploy new technology in a timely manner.
Man Plus Machine — A Powerful New Combination in Retail
Unlike the Luddites, many retail employees are embracing technological advances that are making their jobs easier. As Watson relieves them of smaller tasks, companies can start getting their workforce to be more hands-on with customers.
“What we’ve really been doing the last nine months is focusing on front-of-store capabilities and recognizing the changing role that store associates are going through,” said Stephen Mello, Vice President of IBM Watson Commerce Solutions and Strategy. “They’re not just pointing in the direction of items that you’re looking for. We’re trying to equip that store associate for the more modern world.”
When we caught up with Stephen in New York, he told us that the modern connected world has led to an unbalanced employee-to-customer relationship, where the customer often knows more about specific products than the employees. Watson is helping to level the playing field by giving retail employees deep knowledge on products and customer preferences. This combination of human talent and machine learning making sense of valuable unstructured data gives retailers an edge that’s quickly becoming the norm in the industry.
“It’s hard these days to create real customer engagement in the store,” Stephen said. “It’s not the 1960s and 1970s when the store was it and you got to know everybody coming in. Now, they’re coming in and out, and they might never come back. We’re using Watson to build that level of engagement that you don’t typically have.”