Thanks to cloud technologies, business automation is becoming increasingly accessible for the retail industry. It connects applications and siloed systems, driving efficiencies, enabling excellent customer service, boosting sales, and reducing costs. However, there is still much to navigate. We recently spoke with our business automation expert, Jesper Lillelund, who has a strong background in the retail industry, to gain his insights on how retailers use business automation today.
Here, we highlight key points from our conversation, along with practical use cases for automation that produce real results for retailers today.
What are the benefits of business automation for retailers?
Jesper Lillelund: Several years ago, business automation was primarily about robotic process automation (RPA), where a robot could read from a screen or push a button, for example. Today, business automation is a much broader concept. Cloud services and solutions make retail business automation much easier. Business automation, by applying artificial intelligence (AI), helps retailers do things more efficiently, reduce costs, and win customers' trust and loyalty by providing excellent customer service.
One of the recent examples of process automation that I discussed was with a retailer that focuses on electronics. This high-end electronics retailer started using an AI-powered app that allows store employees to quickly find answers to customer questions. For instance, if a customer asks, "Can I get spare parts for Product X?" the employee can type the question into the app and provide an accurate answer along with details on how long it will take to get the parts, share technical information or a product manual.
In my opinion, business automation is the glue that links data from anywhere, enhancing both the customer and employee experience.
What prevents retailers from adopting business automation?
Jesper Lillelund: Retailers are busy. They are often focused on external demands and immediate operational needs, such as managing inventory, meeting customer expectations, handling sales, and addressing market competition, leaving little time to stop and deeply examine internal processes.
Additionally, retailers typically use a variety of disconnected tools and platforms, such as various marketing tools, sales or CRM solutions, e-commerce platforms, recommendation engines, inventory management systems, and more. Each of these systems often operates in isolation, creating silos of data and processes that are not easily integrated. This lack of integration can make the prospect of business automation seem overwhelming because it involves consolidating data from all these disparate sources to achieve meaningful results.
Fortunately, this isn't the case anymore, but many people are simply unaware of the advancements, which I completely understand. It is hard to keep up with the continuous technical evolution.
Finally, budget can also be a blocker, necessitating a well-defined business case for approval. However, modern technologies enable organizations to start small and grow by demand, making it easier to address this challenge. A good example is when we recently met a customer facing such a challenge. We agreed to deliver a prototype and proof of concept (POC) to demonstrate the value of automating some of their manual administrative tasks. It took us just two days to deliver the first version to test, which surprised them and eliminated all their doubts.
How should a retailer decide what to automate? The variety is huge.
Jesper Lillelund: Business automation for retailers should be focused on the end-user. The first level of end-users should always be the customer. It's important to ask yourself: How can we improve the customers’ experience? How can we enable our frontline workers to enhance customer experience, loyalty, and sales? Could better employee onboarding or freeing up admin time for customer service make a difference?
The next level of end-users is your employees — one of the most valuable assets you already have. To define where to start, consider asking yourself: What business automation would enhance our employees' efficiency and job satisfaction?
Another important prioritization criterion is time to value. Assess which automation projects can deliver quick wins and tangible benefits in the shortest amount of time. This approach helps in building momentum and demonstrating the value of automation initiatives early on.
Are there any pre-validated use cases that work for most retailers and offer a good time to value?
Jesper Lillelund: Absolutely. Successful retailers focus on enhancing efficiency, reducing costs, increasing sales and overall customer experience. Especially in logistic and customer services we often see a great potential for improving on these parameters.
The technological evolution in the last years has made it possible for organizations to reclaim their competitive edge and use technology to differentiate. We see a change from using ISV solutions to building enterprise solutions based on low-code platforms like Power Platform. This strategy is faster, more cost-effective and most importantly composable and scalable. It gives retailers the possibility to use technology to support their overall business strategy and give them a competitive edge and stay ahead of competition. With traditional ISV solutions, retailers depend on standard features and may have to wait for needed functionalities to become standard or customize ISV solutions resulting in high operational costs, high development costs, high supplier dependency and complexity. Luckily technology has evolved to support retailers to focus on the specific business needs instead of trying to fit their business into a defined technology.
Logistics
- Enabling real-time inventory management and sustainable returns. By implementing automation for real-time inventory management, retailers can ensure customers are promptly notified when desired items are back in stock. For example, if a customer shops at a fashion retailer, they can press a button to be notified if an out-of-stock item becomes available again. This not only keeps customers engaged but also captures their contact information, allowing for personalized follow-ups and marketing.
Automating the process of updating inventory with returned items ensures that these products are quickly made available for sale again, optimizing stock levels and preventing missed sales opportunities. Additionally, this approach enhances sustainability and reduces waste. For example, the common issue of customers ordering multiple sizes of the same product to try at home. By using automation in combination with advanced data analytics and machine learning algorithms to predict the best size for customers based on their purchase history, preferences, and other feedback, retailers can reduce the need for multiple orders and subsequent returns.
- Reducing order fulfillment time and minimizing errors. These areas are critical for improving customer satisfaction. It's always satisfying when placing an order on a Sunday evening results in an immediate notification from the postal service and delivery the next day. This efficiency is made possible by integrated systems that prepare orders for shipping as soon as they are placed, along with automation in order entry workflows that significantly speed up order fulfillment. Furthermore, automating shipping processes—from label printing to delivery tracking and customer notifications—reduces human errors and enhances scalability during peak times like Black Friday.
- Optimizing inventory turnover. In our experience, automation in this area is highly effective when it enables in-depth analysis of sales patterns and automatically redistributes stock based on demand and availability across different locations. For example, if a customer cannot find a desired product in-store, they can order it online and have it shipped to their home or another nearby store with available stock. This approach enhances the shopping experience and boosts customer loyalty.
This becomes possible due to real-time updates and seamless communication between online and offline inventory systems. As a result, we achieve faster turnover and better cash flow management.
Customer service: automated customer inquiries handling with integrated AI
Customer experience is a top priority for most retailers, and great customer service is crucial for overall customer satisfaction and brand loyalty. When issues arise in the customer relationship, retailers have a unique opportunity to transform these moments into positive experiences, potentially turning customers into future top ambassadors and promoters for their brand. Here are three key elements for improving customer experience related to inquiries:
- Reduce the response time and make it easy to get in contact. You can use automation and AI to perform content-driven actions based on customer information. AI is now very proficient at summarizing and categorizing both text and speech-based information. In fact, the higher the complexity, the greater the efficiency. It is possible to automate specific actions and assist customer service with recommendations derived from dialogues. Implementing automated approval flows, including reminders for certain situations, is highly effective. Intelligent automation offers a unique opportunity to improve or replace unintelligent telephone switchboard systems, chatbots, and mailboxes. Merging all inquiries across all channels allows retailers to improve customer dialogue and communication, resulting in better customer experience and business results.
- Ensure accurate, consistent, and personalized customer communication. Customers want to be understood, acknowledged, and recognized when they need help from your organization. I am sure that we all have experienced poor customer service at some point in our daily lives. For retailers with several sales channels and customer touchpoints, it is a challenge to get an overview of all engagements with customers. Adding social media and services like Trustpilot makes it even more challenging to secure the best possible communication in all situations. Fortunately, intelligent automation can help you merge information so it can be used in customer dialogue. Retailers who master that discipline use data to personalize all customer communication and secure customer loyalty.
In fact, AI has proven to be a very good tool for analyzing and understanding what the customer is asking for and not being biased in the same way as humans. The results we have seen are truly amazing and can save a lot of time while improving accuracy and consistency. In our experience, AI is not flawless and needs to be monitored and adjusted on the way, but the technology is maturing at lightning speed, and we see great use cases with a high return on investment as we speak.
- Collect all data for analysis and improvement. Implementing automation around customer requests provides significant benefits as the amount of data grows, making it increasingly difficult to analyze without the help of technology. Most importantly, it allows you to categorize inquiries and use this knowledge to identify areas for improvement. When done correctly, retailers will have the opportunity to perform process mining on all inquiries and processes, prioritizing improvements based on data and impact. Additionally, this data can be used to track the impact of customer service on customer churn, order frequency, basket size, and future customer communication.
To summarize, I would like to say that we also see other great use cases for intelligent automation in areas such as operations, finance, and employee experience. However, the key takeaway is that technology has matured to support almost any business need and strategy. You just need to be adept at formulating the pain points and prioritizing them.
That’s an impressive list of possibilities. So retailers need to remember: determine the business need first, then the technology?
Jesper Lillelund: Yes, exactly! Once you have clarity on which use cases your organization should prioritize, the technology part is usually not a big problem anymore, even though it should be used smartly. I usually advise working with Microsoft’s Power Platform stack, especially Power Automate. It is a low-code technology that seamlessly connects your existing systems, so the issue of siloed systems is no longer a problem. You can implement incremental automation improvements quickly without overhauling your current infrastructure. This versatility makes it ideal for addressing technical debt and outdated software. Power Automate streamlines workflows, enhances traceability, and ensures efficiency, making the automation process swift and effective.
Could you share tips on how retailers can start their business automation journey?
Jesper Lillelund: As mentioned earlier, the identification of the most valuable business automation use cases is the first and most challenging, yet crucial step. If prioritization is done wrongly, the risks of wasted resources and missed opportunities are high. There are two ways to approach this:
- Internal process: If a company has plenty of resources, good internal processes, collaboration, and a team that can manage the governance of the process, it can potentially be solved internally by the retailer. However, in my experience, this is rarely the case. People are busy with their daily jobs and not always well-aligned.
- External help: You can invite external help to orchestrate the process, gather everyone, ensure alignment and further execution.
At Columbus, we often help retailers turn their strategic goals and current obstacles into potential opportunities for automation. Once we collaborate on that list, we can prioritize which ones to focus on and enable with technologies such as Power Automate.
To make it as easy as possible for you, we package this into one offering, which includes a one-week intensive through workshops designed to:
- Build your understanding of the Power Platform and the possibilities of workflow automation in your business
- Identify potential use cases for digitization and automation in your business
- Prototype and prioritize solutions for specific use cases based on your implementation complexity and business value
- Understand what is required to build an Automation Center of Excellence in your business
By participating in this workshop, your company can effectively address its unique challenges, enhance efficiencies, provide excellent customer service, sell more, and reduce costs even in a complex business. Talk with our team today to find out more.
