Are tech innovations the key to unlocking the future of retail?
With the pandemic fueling borderless innovation, India is fast becoming the world’s largest technological innovation hub. The Global Retail landscape is an indispensable part of the global economy. E-retail sales are expected to reach 22% of global retail sales by 2023 as per a recent Statista report.
Induced by the global pandemic, the sector is witnessing a transformational phase. Not only has it challenged retail businesses across the world, it has also presented an opportunity for ushering in a retail revolution.
This has been made possible through supply chain transformation, building operational efficiency, merchandising excellence, and customer engagement. In the current business climate, Lowe’s India has reaffirmed its belief that India is home to a wide network of innovators developing solutions to global issues while the industry is at an important conjecture wherein technology will reshape retail.
Lowe’s Companies has been at the forefront of innovation while serving more than 20 million customers a week in the United States and Canada. The brand’s services have been revamped to translate the customer’s imagination into reality while delivering a seamless shopping experience. To accomplish this through trying times such as these, businesses have heavily relied on technology, which has come to the rescue for multifarious global sectors.
Below are some of the excerpts during a conversation with Mr. Ankur Mittal, Managing Director and Senior Vice President of Technology, Lowe’s India, detailing out the innovations transforming the sector globally:
1.) What are the aspects the innovation team in India is supporting the global team with? Any specific projects which have been led from India and have been received well in the US?
We at Lowe’s put a premium on making continuous improvement by way of innovation and building and strengthening a culture of experimentation. To drive breakthrough innovation, our Lowe’s Innovation Labs team in India has worked with 8 start-ups from across the country, representing a diverse range of interests including merchandising, AI-driven trend forecasting, automated content generation, talent acquisition, hyper real AI and sustainable, next-gen home construction technology, etc. Apart from that, Lowe’s Innovation Labs has also worked on internal prototypes of unique solutions around sustainability. Some of these projects are now moving forward for organization-wide evaluation and deployment.
In addition, the tech and operations team at Lowe’s India work on driving process and incremental innovation to support our business priorities.
2.) While a lot of the new aspects introduced to enhance consumer experience are led by AR & VR, what do you feel about how AI & ML is reforming the retail experience globally?
AR / VR are some of the newer channels gaining momentum for driving customer engagement, especially in retail. Lowe’s Innovation Labs has deployed AR/VR solutions for enhancing consumer experience since 2015. Our teams have also developed a strong understanding of various visualization technologies including AR/VR, Mixed Reality, LIDAR, CGI etc.
With regards to AI & ML, they provide enhanced customer experience across both the physical stores as well as digital formats. One of the exploratory projects done by Lowe’s Innovation Labs in India was to evaluate hyper real AI and its applications around synthetic agents to drive stronger consumer experiences and helping consumers shop in a more tactile environment on Lowes.com
Another use case of AI/ML from our home improvement business is the concept of converting a customer from one who purchases products to one that executes projects through us. We know that the latter is enormously more profitable than the former and ensures customer lifetime value is increased several folds. In this case, AI helps us understand the customer’s purchase patterns and predict the project he may undertake. Thus, giving us a chance to offer free project consultation and take opportunity to undertake end-to-end projects. In addition, we have been using AI extensively to predict not just the likelihood of customer churn but also understanding why a customer is likely to churn.
3.) How have these technologies been received by the consumers shopping at Lowe’s? Could you define any change in revenues post the introduction of these technologies?
Lowe’s Companies Inc. has had a phenomenal FY 20 with over $90 Billion in revenues, and annual sales growth of over $17 billion. One of the chief reasons for this tremendous growth is the massive tech transformation we have been driving for the last two years, one of which is for our eCommerce experience.
In FY 20, we have seen a 121% increase in revenues on Lowes.com. In the first quarter of FY 21, on Lowes.com, our sales grew 36.5% on top of 80% growth in the first quarter of 2020.
In the last one year, we have accelerated the re-platforming of Lowes.com from a decade-old platform to the cloud. This truly transformed site stability, which enabled the site to handle an over 70% increase in traffic volumes in 2020.
4.) What do you think will be the key technology drivers in reshaping the future of retail?
When focusing on the future of retail, it is essential to experiment with emerging and deep technologies and evaluate if these technologies solve clear pain points for consumers or our associates today and accordingly develop the capabilities that power the future of retail. As part of that, we need to take it across the lifecycle of building prototypes, executing Proof of Concepts and Proof of Futures, piloting them at scale, and deploying them across the organization.
Some of the technologies from a Home Improvement standpoint that could be the key drivers include AI/ ML, Robotics, AR/VR/XR, VoiceTech, Material Sciences, etc.
