Deloitte has a message for Canadian retailers: future-proof the business or prepare to die.
A recently released report by the global accounting firm is urging traditional Canadian retailers to shift their mindset in how they use data analytics and artificial intelligence to avoid becoming another retail casualty.
The advent of e-commerce channels and online stores has steadily eaten up the demand for brick-and-mortar stores, pushing retailers to deliver distinct consumer experiences and adopt digitally-driven strategies to survive.
Meanwhile, the shuttering of department store chains like Sears Canada and Target Canada tell the story of what happens when retailers can’t keep pace with evolving customer demands. Even the future of the Hudson’s Bay Company looks murky after the company laid off 2,000 employees this past summer.
“Today, customers engage with retailers in-store, online and with mobile. Brands are also interacting directly with customers and e-commerce sales continue to grow. This reality has forced many retailers to operate in a reactive manner – making it very difficult for them to get ahead,” said Tom Quinn, Deloitte Canada’s national retail and wholesale distribution leader.
To dodge a similar fate, Deloitte suggests retailers need to challenge traditional ways of understanding the customer. That starts with embedding analytics, data and reason into decision-making.
Essentially, Deloitte believes Canadian retailers should leverage emerging technologies like AI and big data to drive customer insights, diving further into purchase patterns and more narrow market segments. Those insights mean Canadian retailers can offer one-to-one personalized experiences to win customers.
Ian Scott, Deloitte’s chief data scientist, called these kinds of technology a “critical ingredient” if retailers want to succeed in the rapidly changing retail market.
“Until recently, technology operated to some degree in isolation as a department within an organization. The most successful retailers will use artificial intelligence and advanced analytics as business enablers to uncover deeper insights, craft predictions and generate recommendations to better understand the consumer,” Scott said.
Practical applications of AI and data analytics can enable retailers to identify gaps in capabilities and new growth opportunities, said Deloitte. The firm also pointed to strategic partnerships—including with those in other sectors of the economy—as one area of focus that is becoming increasingly critical for success.