By Simon Hay
Learning from Amazon: data, AI and automation
Cast your mind back 20 years (if you are old enough – like me) and imagine a day in 1996. You are bored, so what do you do? Boot up your desktop computer, make the tea while you wait for a minute (or more) for your dial up to connect and, bingo, you’re online! You’ve got the world at your fingertips – kind of. There’s no YouTube, Huffington Post, or Candy Crush. There’s no Google, Twitter, Facebook, or Wikipedia. Slim picking by today’s standards. You can however, order a book from a company called Amazon (it’ll never take off – after all why wouldn’t you just go to the book shop?). Fast forward two and a half decades and customers can do a whole lot more than order a book from Amazon.
Jeff Bezos has systematically grown the company to become the most valuable public company in the world. But that does not mean that its founder believes it to be infallible. In fact Bezos even recently predicted the company’s demise telling staff that one day Amazon would go bankrupt. For many retailers that would be a dream come true. Unfortunately for them, however, Bezos’ one goal is to delay that day for as long as possible by focusing on its customers.
So Amazon isn’t going anywhere soon. This means retailers need to find ways to thrive in the $1 trillion + Amazon world or face their own extinction. Research from the Yale School of Management shows that the average lifespan of an S&P 500 company in the US has fallen from 67 years in the 1920s to just 15 years today. And it is predicted that 75 per cent of firms in the S&P 500 now, will be gone by the year 2027. Not a rosy outlook. It’s the same story in the UK although corporate lifespans are a little longer. The main reason that companies die (beyond M&A) according to the study is that they fail to anticipate or react to:
- New customer demands.
- New technology.
- Competitors with new ways of doing things.
To counteract these, the answers lie in data, AI and automation. These are the three ways that retailers can stay in the game and compete with Amazon today.
Transforming data to gain a more granular understanding of your customer
Understanding what your customer needs, what motivates them and predicting what they want in the future is critical. Research from Deloitte shows that customer-centric companies are 60 per cent more profitable. In order to be customer-obsessed you need good quality customer data. With new legislative restrictions over what data you can collect and use, this means managing the data ecosystem has never been more complex.
Customers trust Amazon with everything from their personal information, buying habits, viewing habits to the literal conversations they have in their house as a result of Alexa.
But for retailers not lucky enough to have this wealth of information, you have to make the most of what you do have by being incredibly fast and …read more
Read more here:: B2CMarketingInsider