Retailers across the world have struggled to make in-store customers feel as valued as those online or using apps. The reason is simple: the apps know your shopping history. They know everything you have looked at and liked and with that rich set of data the online experience can be much more effectively personalized.
In contrast, when a shopper walks into a store they don’t receive any personal recommendations and if there are discounts available then they apply to everyone. Japanese fashion giant Uniqlo is planning a digital transformation of their stores to try addressing this problem.
They are designing Artificial Intelligence (AI) systems to not only improve the way the company runs, but also how customers see the company. AI is being used to improve inventory levels and logistics and the vast web of connections between factories, distributors, and retail outlets. The intention is to ensure that the right products are always in the right store at the right time by using real-time data analytics.
Uniqlo has started rolling out new stores across the US that are more like large vending machines. They can be installed in airports, train stations, and shopping malls and stock a wide range of basic clothes. Anything purchased from a vending machine can be returned to a regular store or by mail if required.
The brand is also using their new focus on AI to help customers choose. By analyzing customer choices they are able to consistently offer highly relevant recommendations to the customer. This not only creates the opportunity for additional sales, it also strengthens the connection and bond between the brand and customer.
Uniqlo is demonstrating a far-sighted approach to fashion retail that truly transforms the entire organization through the use of data analytics and AI:
- The entire back office and distribution network is more efficient – the right clothes can always be in the right place
- The relationship with the customer improves because the experience is personalized
- They are redefining how clothes can be sold in-store by experimenting with new concepts and locations
This AI-first approach sounds more natural in technology companies such as Microsoft, but it’s clearly an area where retailers need to focus. Customers have changing expectations around how they interact with brands and they want a more personal experience. A brand that can get the right products to the right customer at the right time is certainly going to create a far better customer experience. I think Uniqlo is defining the future for fashion retail.
Let me know what you think about digital transformation in retail and what Uniqlo is doing with AI by leaving a comment here, or get in touch via my LinkedIn.