Technology, analytics and the future of buying
21st January 2020
Technology and analytics will be one of the most disruptive forces for retail buyers in this new decade. The role of a buyer is on a quantum leap to a new unknown buying realm. But how exactly will technology change the way that retailers buy products?
1. USING ARTIFICIAL INTELLIGENCE TO MAKE INTELLIGENT DECISIONS
Currently, some aspects of a buyer’s role are based entirely on their own opinion or supported by weak ‘trends-based’ evidence – for example ensuring the right new products are brought into store and fit in well with the rest of the range. Choosing the right products in a range is crucial for customer retention and relying on gut feel is dangerous in an increasingly competitive market. According to Deloitte, over a third of major retailers are starting to use Artificial Intelligence to improve ranging and promotional decisions. Instead of the buyer trying to understand their customers through historic sales and market insights, they can rely on powerful, connected algorithms that lead to intelligent product recommendations. These algorithms use new unstructured data such as customer reviews, social media browsing, emails as well as traditional sales-based data, meaning there are more sources to analyse to understand the customer profile. The speed of decision making and predicting trends with such accuracy is paramount to that of human ability.
2. DIGITAL SENSES TO BROADEN THEIR SUPPLIER BASE WHILST SAVING TIME
Sourcing new suppliers can be difficult for buyers, as there isn’t enough time in the day to physically visit all potential farms and factories globally to get a sense for the quantity and quality of their product. As technology continues to develop at an exponentially increasing rate in the next decade, buyers will most likely rely less on biological senses to process this external information. Already today, we can see examples of external instruments enhancing the core functionality of human bodies and literally extending senses. Imagine the digital senses of smell and taste bringing the South African farmer’s lilies directly from the field to the buyer’s office. What they previously evaluated via video or onsite visits, buyers can now virtually smell and taste for themselves!
Advancements in technology mean that the buyer will only need to audit suppliers onsite in unique cases. Options for virtual audits are so vast, that all test criteria can be experienced in real-time virtual space. Using a headset and screen, buyers can move through the supplier’s actual production facility. Days to Weeks saved in travel time, these buyers can focus on other aspects of their role more intensively.
3. RISK MAPPING FOR STRATEGIC SUPPLIER SOURCING
Risk is a major factor that buyers must think about when deciding where to source their products from. They rely heavily on news developments and listening to intel from their suppliers. Technology advancements will be incredibly useful in mapping out current and future supply chain risk. A real-time dashboard is plausible; a world map showing the buyer in which countries disturbances in the value supply chain can be expected in the coming hours, days and weeks so they can plan accordingly. Google’s recent project named GDELT already gives us an idea today of what could be possible tomorrow.
A Global Database of Society – Supported by Google Jigsaw, the GDELT Project monitors the world’s broadcast, print, and web news from nearly every corner of every country in over 100 languages and identifies the people, locations, organizations, themes, sources, emotions, counts, quotes, images and events driving our global society every second of every day, creating a free open platform for computing on the entire world.
The software constantly analyses 250 million television, print and web news contributions from the past 30 years, in over one hundred languages from 140 countries. By quantitatively codifying human society’s events, dreams and fears, the algorithm maps conflict, provide insight to vulnerable populations and even forecasts global conflict.
Of course, while these systems identify anomalies and patterns, buyers still need to use these insights to initiate targeted measures such as ad hoc supplier audits or strategic dual sourcing before an incident occurs – but the key difference is that buyers are being proactive rather than reactive.
In a world of algorithms and big data, buyers now have the toolkit to work smart, meaning their new role is an indirect job upgrade. Buyers no longer lose time with manual analysis and searching for often sparse market insight – this can be augmented and automated. They don’t waste many hours spent travelling and dealing with supply chain crises. Instead they are taking on a proactive, innovative and impactful role in the business.
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