CV-19 Insights

Breaking Through the Digital Transformation ’Noise,’ and Focusing on the ‘Signals’ That Drive Retail Growth and Profitability

Digital transformation is now critical for success for traditional CPG manufacturers and retailers who face growing challenges from  formidable e-commerce companies and radically changing consumer tastes, attitudes and shopping behaviors. Given the strategic and operational stakes, senior executives must own the decisions to adopt particular data management solutions and emerging technologies such as predictive analytics and artificial intelligence. Yet, many lack a practical grasp of how such technologies can achieve specific business outcomes and are vulnerable to the hype-driven “noise” around digital. Examples of this digital noise include:

The Noise: Digital technologies are THE answer to all retail challenges.  Advanced digital technologies, such as AI, Deep Learning (DL), Machine Learning (ML), Natural Language Processing and Robotic Process Automation, promise an accelerated on-ramp to future retail industry success. But, how do you compete with the likes of Amazon or Alibaba? The world’s most formidable e-commerce competitors are relentlessly data-driven and technologically adroit. The world is clearly moving in their direction. Consumers (especially the younger cohort) routinely demand lower prices, enhanced digital engagement and seamless omnichannel access.

The Signal: Clarify the business problem before deciding on the best technology solutions. In other words, the right digital technology solutions must be driven by the problem you want to solve.

The Noise: Retail data provides crucial, actionable insights. Over the past decade, data volumes have grown exponentially. We’ve raced past gigabytes and even terabytes of data and are now dealing in petabytes. How can you generate practical insights in near real-time to make quality decisions that will have a measurable and meaningful impact on business operations and outcomes?

The Signal: Retail data can provide actionable insights but those insights can only be extracted via a robust data-management system.

The Noise: Predictive analytics is a solution you can buy. Maximizing on-shelf availability (OSA) to solve the industry’s massive and stubbornly persistent out-of-stocks (OOS) problem is among the biggest challenges plaguing the retail industry. To alleviate these pressures, CPG manufacturers and retailers are adopting complex predictive models driven by AI-based technology. Many vendors and IT experts insist that it’s not only possible to attain near-perfect accuracy in those models, it’s crucial to do so. Nothing else matters. The truth is much more nuanced and complex. In fact, total accuracy may not even be desirable and could actually exacerbate the challenges you face.

The Signal: Quality decisions should be based on realistic probability assessments, not inflated accuracy levels. 99% accuracy may not be the desired outcome, nor may it reflect the actual level of certainty in real-world conditions.

In the latest whitepaper by RSi, we target 5 misleading claims (the “noise”) such as those above and set the record straight, giving senior retail industry leaders a sharper understanding of the challenges such technologies actually address, and the real opportunities they offer (the “signals”). Don’t find yourself caught up in the technological hype. Check out our white paper and learn what it takes to digitally transform your company so you can grow, profit and rule — from supply chain to shelf.

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