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How AI is sizing up footwear retail’s future

Opinion

Published by:

4 January 2019

Author: Richard Potter

Image: Photography by Nathan Dumlao on Unsplash

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Richard Potter, CEO of Peak, says category-specific retailers have an opportunity to shine with clever AI-driven data analysis.

As the unfortunate plights of some of the UK’s most well-known retail businesses continue to dominate headlines with declines and store closures, you could be forgiven for thinking that it’s very much all doom and gloom across the sector at the moment.

However, the fact is that retail is undergoing a revolution and this is presenting new and exciting opportunities to thrive.

Artificial intelligence (AI) and machine learning are leading the transformation of the industry. Our own research shows that those e-commerce retailers placing AI at the centre of their operations are growing 30% faster than those who aren’t, with 50% higher profit margins.

The reason for this is that we can use AI to analyse the factors at play in the constantly changing behaviour of consumers – like how, why, where and when we shop - in a way that we otherwise simply couldn’t. This data can then be used to shape and enhance retail operations, such as by informing product offerings, personalising communication and improving the efficiency of supply chains.

The concept of linking a physical store with digital activity, meanwhile, is growing and the combined phygital experience can be sculpted and enhanced using AI to analyse and extrapolate from behavioural data.

Eobuwie store designed by Dalziel & Pow, Poland
"AI is empowering footwear retailers to personalise communications at right time, in the right way, and with the right content."

For an example of this in practice, we can look at Peak’s recent work with clicks-and-bricks footwear retailer Footasylum. With access to a wide array of customer data, we unified and drilled down into its customer base to deliver a single customer view.

We then use AI to draw insights based on past behavioural and transactional data – notably from both in-store and online – using powerful machine learning algorithms to classify customers in terms of in-market predictions, product recommendations and brand and style preferences, as well as churn risk.

With this information, Footasylum has been able to better engage with its customers and adapt its product offerings accordingly. As a direct result of implementing this AI System into the core of its business, Footasylum has recorded a 28% uplift in revenues generated from its email marketing communications.

A truly customised experience, whether that’s online or in-store, is no longer desired by the modern consumer – it’s expected. This aforementioned wealth of customer data available, when leveraged using AI, can empower retailers to deliver hyper-personalised marketing communications, with personalised product recommendations targeting customers at the right time, in the right way, and with the right content.

Looking ahead, it will be those retailers who remain on the front foot and adopt the right technology now that will continue to compete in the future. There is no doubt that every brand and business will need to be able to utilise AI if they want to survive what is proving to be a difficult time for some of the UK and US’s most recognised retailers.

Richard Potter is CEO at Peak, an artificial intelligence firm based in Manchester and Jaipur.

Transform your relationship with your customers in-store and deliver Return on Inspiration by downloading our Retail Futures Report.

 

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