Intelligent Retail at Microsoft: Results-Driven Solutions that Generate Customer Insights and Empower Employees to Act on Them
Updated: 2.16.18 Business Solutions

Intelligent Retail at Microsoft: Results-Driven Solutions that Generate Customer Insights and Empower Employees to Act on Them

By: Michael Senecal

The Crunch: In retail, generating massive amounts of business and customer data is easy. But if it can’t be put to good use, it doesn’t have much value. Tools from Microsoft enable retailers to extract insights from their data and deliver more personalized shopping experiences, better customer service, and a more transparent supply chain. These enhanced abilities of digital transformation are key to instilling organizational flexibility and addressing the rising expectations of consumers. Results-driven e-commerce solutions from Microsoft help retailers win customers, earn a positive ROI on their technology, and gain a competitive advantage for the future.

Columbia Sportswear, a leading lifestyle apparel, footwear, accessories, and equipment retailer, was looking to deliver a more personalized and seamless experience. The company wanted to leverage customer interactions across channels to generate better insights and improve the tools it provided its store associates enabling them to act on that information.

So, Columbia turned to the Microsoft Azure cloud platform and Microsoft Dynamics 365 to manage its retail, call center, customer relationship management, and merchandising operations.

Microsoft’s platform and services enabled a holistic view of transactions, and Columbia is now personalizing customer interactions at every touchpoint, managing its merchandise and operations globally, and customizing its reporting and analytics to improve its business and intelligence. Judson Althoff, EVP of Worldwide Commercial Business at Microsoft, said the sportswear retailer is “setting itself up to be an industry leader for another 80 years.

For retailers, Microsoft products improve customer engagement, empower employees, and optimize operations. By enabling better connections between products, processes, and systems, Microsoft gives retailers a customer-centric platform for innovation across the business.

At the 2018 NRF Big Show in January, Microsoft showcased the transformative power of its retail platform and services, including Azure and Dynamics 365. Karen Garrette, Global Retail Industry Director at Microsoft, said that Columbia’s results-oriented approach to its investment in the Microsoft cloud typified the retailers that visited with Microsoft at the show.

“What we saw at NRF was an emphasis on the practical. Retailers are asking us to help them make sense of the data they have and to help them use it to their advantage by transforming it into information they can act on,” Karen said. “What we’re doing with Azure and Dynamics 365 and our other products is enabling retailers to use their data in a much more focused way than they ever could before.”

Transforming Business Intelligence into Personalized Experiences

Microsoft brings the power of machine learning and artificial intelligence to retail and uses advanced analytics to reveal hidden data insights. “When you look at data from disparate sources — when you compare transactional data with even something as arcane as weather data, for example — you gain predictive insight into demand,” Karen said. “That translates into personalized customer experiences across channels, which then translates into sales.”

Azure is Microsoft’s vehicle for accomplishing those objectives, and its big advantage is that it integrates a scalable platform infrastructure with applications designed to leverage it. “Our unique combination of platform as a service and software as a service in Azure results in easier, faster access to results and greater flexibility for retailers,” Karen said.

Pet Supplies Plus uses Azure-enabled data intelligence to hyper-localize its in-store and online assortments to personalize the customer experience. “Pet Supplies Plus uses the adorable phrase ‘pet parent’ to describe its customers,” Karen said. “If you’re a pet parent in New York with a cat, the things you want to see on a store shelf or web page are very different from what a pet parent in Minneapolis with a dog would want to see. They’re using an Azure-supported environment to deeply understand customer buying preferences and configure their supply chain accordingly.”

Screenshot of supply chain statistic

Grocery retailer Kroger uses Internet of Things (IoT) services and Microsoft Azure to support a smart-shelving system known as EDGE (Enhanced Display for Grocery Environments). Engineered by Kroger R&D partner Mission Data, EDGE enhances the in-store customer experience while also boosting operational efficiency.

EDGE displays pricing information, product videos, and promotional information on a digital display located below products on the shelves. Weight-sensitive sensors alert store associates to stock issues via mobile devices. As they walk down the aisles, customers using Kroger’s mobile app in-store see tailored promotions based on purchasing habits and when they encounter items on their grocery list.

“In retail today, the ‘stock problem’ is a trillion-dollar problem,” Karen said. “Putting the right product in the right place at the right time is at the heart of customer service in retail, and our platform enables it.”

Driving Conversions by Adding Value to Store Associates’ Tasks

The Kroger use case also highlights how Microsoft gives retailers opportunity to add value to the tasks store associates perform. Manually repricing every item in a typical Kroger store would require two weeks. With EDGE, repricing is automated. That not only saves costs along the supply chain but also frees up time for associates to spend helping customers.

At home improvement retailer Lowe’s, automation is performing a similar function. Azure supplies the brains behind LoweBots — autonomous service robots that perform simple customer service tasks and monitor inventory on store shelves. The LoweBots use cameras and lasers to navigate to store items requested by customers either by voice or keyboard. In the process, the robots communicate inventory issues to the associates who can fix them.

But LoweBots aren’t intended to replace workers. Instead, they free them to perform the higher-value consultative services that are vital to driving sales, cross-selling, and upselling.

“The last thing you want in-store customers to encounter is a stock issue. LoweBots detect those issues while associates stay on the floor doing things that robots can’t do,” Karen said. “That means more human interaction, not less, and more chances for consultative selling. Connecting with customers at that level is an increasingly valuable touchpoint for brands, and it’s how stores can stay relevant.”

The imperative then becomes empowering employees with the information they need to make sales. That’s where Dynamics 365 comes in. It runs on top of Azure to link the store floor with the backend, unifying product, customer, inventory, and order information across channels.

On the web, Macy’s uses Dynamics 365 to power a virtual customer-service agent. The agent solves merchandise and order issues — and seamlessly transfers customers to live agents when necessary — through its deep connection to store operations.

At Build-A-Bear Workshop, product customization is the basis of the business. The stuffed-animal retailer uses Dynamics 365 to generate a 360-degree view of its customers by integrating previously siloed legacy data systems.

“Improving productivity at Build-A-Bear is about placing the right associates with the right experience in the right places at the right time,” Karen said. “With the unified information provided by Dynamics 365, those associates can broaden the range of appealing choices available to repeat customers.”

A Flexible, Scalable Platform for Reinventing the Customer Journey

At the NRF Big Show, Microsoft also showcased Dynamics 365 innovations that bring additional productivity and flexibility to its portfolio of retail solutions. Associates can now receive notifications prompting them to complete assigned tasks — including helping customers, running transactions, performing stock counts, and receiving orders. And in-store order fulfillment is unified across channels, giving customers a true omnichannel experience on the store floor and extending real-time inventory visibility across the organization.

Photo of Karen Garrette, Microsoft’s Global Retail Industry Director

Karen Garrette, Microsoft’s Global Retail Industry Director, told us about the digital products Microsoft showcased at NRF 2018.

“Information that traditionally was relegated to the back of the house is now increasingly being put in the hands of everyone connected with the success of the organization,” Karen said. “That means better precision and positive bottom-line impacts from many different sources.”

And Microsoft makes the promise of transformation available to retailers across the spectrum of legacy systems. Azure and Dynamics 365 work not just within businesses’ own ecosystems but also with third-party solutions providers on a wide variety of platforms.

“Retailers come to us with monolithic ERP systems, separate website databases, different systems for forecasting, something else for CRM — there’s a whole gamut of people doing different things,” Karen said. “The biggest challenge is simply to bring all that data together. We have so many of the puzzle pieces under one roof now and so many ways forward. Data plus insights make action possible. Retail transformation works only if there’s unified data available to visualize and a platform powerful enough to crunch it. That’s what we do.”

Microsoft tools give retailers plenty of ways to invest that will result in positive ROI. More important, perhaps, is that the tools are customizable and extendable, meaning retailers that invest in Microsoft solutions can stay ahead of the customer curve for years to come.