In many industries, AI has the potential to fundamentally reshape the value chain. Retail is no exception. There are many problems that AI could potentially help solve by:

1. 1. Picking up on changes in consumer demand patterns – on a category, brand and product level. AI can aggregate data from multiple sources to identify patterns and help manage inventory to meet rising demand.
   2. Simulating impact to weigh different strategic initiatives – assessing impact on revenues of different merchandising strategies, promotions, shopper marketing, performance marketing etc.
   3. Enhancing customer relationship/increase cross-selling by predicting the Next Best Purchase – the most likely purchase given patterns from both internal and external data sources brought together
   4. Sharpening targeting through a Personalized Shopping Assistant (in-store and online) assisting with search, best fit, suggestions etc.
   5. Optimizing customer service through dynamic scripts, face and voice recognition, predictive equipment maintenance etc.

However, the real value of AI goes beyond revamping current activities – ultimately, it will be in making entirely new retail models possible, where the very relationship with the consumer is reinvented. A few examples, among many others, could be:

Creating worlds and experiences – beyond transactions
Imagine planning a dinner party. You put in a theme and receive a dinner planned by Gordon Ramsay. As you select recipes, ingredients in the right quantity for your party automatically appear in your shopping cart – and a cooking flow is set for you with videos, instructions and timely reminders. Table settings for your theme dinner are delivered right on time with suggested wine pairings. AI can help create a world of experiences – where value is derived not just from the purchase transaction, but from the experience and interactions that these enable.

Lifestyle ecosystems – beyond the category
Imagine putting in the occasion for your next office party and receiving outfit recommendations, removing the traditional consumer angst of not knowing what to wear. Imagine your style choices then connect you to a community of like-minded aficionados (Recent years have seen the formation of many such lifestyle communities, from cottagecore to farm chic or now momcore that has recently been reinvented). This lifestyle community would bring together an ecosystem of providers, from clubs to sports, leisure and entertainment, supported by a stream of “endless” content. These ecosystems will not just foster a stronger sense of belonging and loyalty – each interaction will enhance the value of interactions to come.

Co-creation: sharing creativity
In the traditional model, consumers are subjects – on the receiving end of the brands’ creativity, branding and advertising. Recently, brands have been exploring reversing that pattern – putting consumers themselves in charge of advertising the brand – from Apple featuring consumers’ photography in its ads to Yeti’s UGC campaign. With the democratization of creativity brought about by AI, this can be taken one step further – with much more ease, consumers will be able to ideate, script, design and even produce an ad – and disseminating it to their networks, creating the sort of viral effects that create exponential growth.

Every retailer knows well that beyond satisfying consumers’ functional needs, there is a large market in meeting consumers’ deeper needs of feeling seen, taking control of their narrative and connecting with others. Through data and matching algorithms, AI can give consumers the ultimate control over their narrative – expressing their values, personality and lifestyle choices. In such an ecosystem, value would be created through much more than transactions – through the interactions that will create data that will ultimately enhance the value of the ecosystem at large.

The ultimate question is how these retail models will lead to new ways to increase value – an increased customer relationship leading to higher loyalty; better targeting to increase spend; and belonging to a community leading to increased frequency. This is when the AI opportunity will become real.

The post AI in Retail – Is the Value Real or Artificial? appeared first on Vivaldi.

Erich Joachimsthaler and Julie Roehm discussed business transformations.

Here are some of the key principles that Julie shared about her recent journey with Party City: 

1. While making it easy is not the only driver to keep customers coming back, it certainly does play a huge role in customer retention. Navigating through the pandemic is already complicated by itself, so companies are now concentrating more on making the highly digitalized transactions and customer interactions more seamless while fulfilling safety measures.

“I’m much more interested in learning: ‘Was it easy for those things to happen?’ When you peel that onion, that’s where you see the opportunities.” – Julie Roehm, Party City CMO

Party City’s main focus is currently on Customer Effort Scores because it informs the company how easy it was for customers to transition into highly digitalized transactions and finding relevant information. Party City believes in investing in seamless experiences because it increases customer engagement.

2. “Curbside pick-up is not an innovative experience but rather an expected norm.” Julie indicated that pick up without leaving the car’s safety has been part of Party City’s roadmap; however, the roll-out was expedited once the pandemic took place. In order to adapt quickly, it’s best to err on the side of action. 

“We chose to have an imperfect experience and just got the experience going to be able to service the customer.” – Julie Roehm, Party City CMO

Innovative outlets can come in the most unexpected and sometimes low-cost ways. To help parents adjust to their new work from home schedule, Party City provided free event itineraries that users can download with items from their inventory that go along with it. With this free asset, Party City discovered that providing free experiences has a direct impact and value on sales. 

“How do we celebrate Halloween while social distancing?“ 

3. We will probably not celebrate Halloween the same way we always have this year, but that does not mean that it can’t be fun anymore. Julie shared Party City’s “thrive rather than survive” approach by planning to continue making memorable experiences during this upcoming holiday with recent customer research outcomes. 

“People want to celebrate. They want to create joy regardless of the situation and the creativity that is there. They will figure out a way to do it. We just want to lean in.” – Julie Roehm, Party City CMO

Party City’s research shows an increasing demand for Halloween décor because it is a way to celebrate while social distancing. Through influencers in their team, they were also able to develop ways of doing Trick-or-Treating without contact by promoting “Trunk-or-Treating” where treats could be accessed from the back of vehicles. Finding creative ways to keep experiences as normal as possible is a fun process by itself and should be approached as an exciting challenge.

Retailers also need to consider creating a scalable experience and selling opportunity past the pandemic including:

• Identifying Creative Social Distancing Trends: By shifting from pandemic distress to an opportunity mindset, companies will find new customer segments with real-time quantitative customer journey data and influencer trends. The pandemic certainly has a daunting effect on both companies and customers, but using customer research findings as the guiding light during these dark times may bring exciting new opportunities and services to the company.
• Safety Impacts Customer Loyalty:  If companies continue to build trust between their customers by actively and consistently demonstrating safety measurements during the pandemic, then the company will be able to usher the customers towards their eventual reopening as they maintain their customer following.
• Retailers as “Experience Consultants”: Because the majority is unfamiliar with the changes in how we consume during the pandemic, retailers can suggest new ways for their customers to experience their products and services. Party City redefined celebrating moments by designing virtual experiences while waiting online, building party planning teams, and opening a new digital marketplace for additional services to complete the new party experience. Forming strategic partnerships that enhance these new experiences also creates new opportunities to innovate.

“If you create a brand purpose and you throw it out or revise it six months later, you probably haven’t arrived in a good brand purpose.” – Erich Joachimsthaler, Vivaldi_ CEO

A massive transformation is happening in almost every business because of the pandemic. Some elements should change, but the one piece that should not change is the brand’s foundation. By positioning your brand with a resilient future-proof purpose, it becomes easier to navigate through the transformation process and to plan the next steps to take.

Watch the full event here:

• 6:40 – Party City transforms from being a goods provider to an experience provider
• 8:35 – Party City aims to provide equal parts of party supplies and equal parts experience
• 12:55 – Listening to the customers and leaning into their demands
• 13:08 – Julie’s “thrive rather than survive” approach to challenges
• 19:30 – On making the customer experience easier
• 23:00 – Julie recommends retailers to provide consulting for their products and services
• 23:23 – Julie shares Party City’s findings of consumer demand shifts and how to work with the information
• 23:58 – A glimpse into what Halloween with social distancing could look like this year according to Party City
• 27:50 – How Julie’s previous experience car experience prepared her for her role in Party City
• 31:25 – The importance of bringing in a customer experience expert to leverage the customer journey
• 36:56 – On accelerating Party City’s roadmap because of the pandemic
• 37:36 – To err on the side of action
• 44: 08 – The role of partnerships in transformations

This segment was part of The Interaction Field Series of our LinkedIn Live Events. Please connect with us on our LinkedIn page to stay updated with our upcoming conversations.

The post “Thriving, Not Surviving”: Retail Transformation in Challenging Times with Party City’s Julie Roehm appeared first on Vivaldi.