Retail Partner Conversations: How Retailers are Driving Enhanced Conversion, Loyalty, and Lifetime Value Through Real-time, Personalized Customer Engagement with Algonomy
The global retail industry is experiencing unprecedented disruption, but leading retailers are demonstrating resilience, tenacity, and a capacity for innovation. We’ve embarked on a series of conversations with executives from AWS Retail Competency Partners to showcase their leadership and innovation in these challenging times.
In the latest installment of our AWS Retail Competency Partner Conversations blog series, we chatted with Raj Badarinath, CMO at Algonomy, an end-to-end algorithmic customer engagement solution. Algonomy’s platform empowers leading brands to become digital-first with 1:1 omnichannel personalization, customer journey orchestration, merchandising analytics, and supplier collaboration. Raj shares how retailers are dismantling data silos and adopting cloud-based solutions to create personalized customer experiences in real time.
AWS: Help our readers understand your vantage point. What are Algonomy’s key segments in the retail industry, and with what type of retail executives do you interact?
Raj: Algonomy aims to help store-first retailers become digital-first with our Algorithmic Customer Engagement (ACE) platform. Algonomy was formed by the merger of two retail-focused companies with complementary solutions—Manthan, a leader in customer data and analytics, and RichRelevance, a leader in personalization—and sits at the intersection of deep domain expertise in retail and actionable algorithms.
ACE is an integrated platform for retailers and brands that brings together marketers, merchandisers, commerce, sourcing, and data executives with a single, customer-centric view of the business. It aims to be the operating system for retail. The clear value is to drive enhanced conversion, loyalty, and lifetime value through real-time, personalized customer engagement across online and stores supported by our customer data platform with in-built customer analytics.
AWS: Retail companies are facing a period of unprecedented disruption. What have been the biggest challenges for your retail customers?
Raj: Stores have been hit particularly hard due to mandated store closures in several regions. Most retailers weren’t prepared for the sudden customer exodus to digital last year and realized that they were unable to scale personalized experiences. At the same time, digital commerce has grown more quickly than ever; retailers who were quick to go digital are reaping great benefits.
The new normal requires retailers and consumer packaged goods manufacturers (CPGs) to redo digital by replacing traditional channel-centric promotional approaches (for example, emails, newsletters, and in-store offers) with a customer-centric, personalized approach.
Retailers are challenged by the flip-flopping of customer behavior: the migration from brand loyalty to value buying and vice versa, and the emergence of new, unexpected sales categories. The speed of response has evolved from daily to instantaneous, and new players, such as aggregators, have put retailers in a “frenemies” relationship to keep customers happy.
In addition, digitally native vertical brands (DNVBs), CPGs, and fast-moving consumer goods (FMCGs) companies are quickly adopting a direct-to-consumer (DTC) strategy to establish a direct connection to their customers.
Retailers are now in a battle to continue to leverage their core competencies—experiential merchandising, customer intimacy, and proximate location—to continue to evolve and thrive in a post-pandemic world.
AWS: How do you see retailers adjusting their operating environments to current market dynamics and changing shopper expectations?
Raj: A common theme that we are observing is the investment in digital to be more resilient. Retailers have come to realize that just having digital silos—an ecommerce site or a mobile app—are not good enough if these silos are disconnected from the in-store experience. They need to go digital inside out. This means learning about customers as they interact with the brand, leveraging these insights to personalize experiences with contextually relevant search, and offering real-time product recommendations across digital and stores. Leading retailers are looking at pooling their customer interaction data and leveraging patterns to help drive innovative merchandising and sourcing from responsible suppliers. In addition, they are making significant investments in artificial intelligence (AI) and data science to shape customer decision making at the point of interaction and leverage these findings across the enterprise.
Whether they invest in building best-of-breed solutions or buy a full-suite stack, retailers are making sure all their systems can talk to each other seamlessly.
AWS: The retail industry is incredibly resilient. As you look forward, what role do you think technology and the cloud will play for retailers? How do you see technology enhancing the shopper experience and improving operational efficiencies?
Raj: Retailers have traditionally been the early adopters of innovative technology. Despite investing in a multitude of systems, the realization is that there is a need to drive decisioning for retail customers in real time, not offline in batch. Poor customer data infrastructure is hindering their ability to make insights-driven decisions in real time and is jeopardizing data security.
To overcome these obstacles, retailers are turning to cloud-based solutions to break down data silos, analyze massive amounts of data, apply AI algorithms, and unearth hidden insights that can lead to better decision making and improved customer experience—all while adhering to data security and privacy norms and with a faster time to market.
Retailers are driving personalized customer engagement armed with a single source of truth enabled by cloud-based customer data platform (CDP). These CDPs act as a centralized repository of business insights, customer affinities, preferences, and propensities.
AWS: With the current disruptions in the retail industry, how is your company innovating to help your retail customers?
Raj: The last year has seen us realigning our investments and product priorities to cater to the market demands for a unified platform that connects demand to supply for retail. Algonomy is adept at customer data management, analytics, omnichannel personalization, and journey orchestration. From streaming data ingestion and real-time audience activation in our CDP to open AI, ensemble-based, real-time decisioning engine to drive contextually relevant engagement, our ACE platform is fully equipped to cover real-time customer interaction for retailers.
Other areas of investment include AI with deep recommendations and visual AI. We are also expanding our omnichannel presence with a contact center app, mobile, Internet of Things (IoT), and messaging.
AWS: There’s so much talk now that the shopping experience has changed, and there’s a “new normal” going forward. What does this “new normal” look like to you, and how do you think the retail experience will look three years from now?
Raj: Here’s how Algonomy visualizes retail three years from now.
Demand and supply will be aligned through AI. AI will help predict demand, optimize stock, and ensure just-in-time availability to reduce costs and improve profitability. There will be close collaboration between retailers and suppliers, which will ultimately benefit the customer.
Retailers will move from focusing on frictionless alone to introducing deliberate friction to create more memorable experiences by leveraging digital both online and in stores. And they will adopt hyperpersonalized solutions to tailor product and offer recommendations to a segment of one.
Increased data privacy guidelines from different regions of the world will mean a shift to zero-party and first-party data governance. Retailers are already adopting a personal touch to engage customers using opt-in data, with an increased focus on personalization that is noninvasive.
To learn more, read this report from 451 Research that provides insight into Algonomy’s retail-specific digital experience platform, offering solutions across the value chain from customer engagement to merchandising to supply chain.
AWS: Thanks for chatting with us, Raj. We appreciate your insights and expertise.
If you have questions for Raj, Algonomy, or AWS, leave a comment on this blog.
To learn more about AI-based decision making, listen to the recent webinar hosted by Algonomy and AWS on digital readiness for retail “Digital-First Strategies for a Resilient Business”.