Are technical innovations the key to the future of retail?
As the pandemic drives limitless innovation, India is rapidly becoming the world’s largest technological innovation center. The global retail landscape is an indispensable part of the global economy. According to a recent Statista report, e-retail sales are expected to reach 22% of global retail sales by 2023.
Induced by the global pandemic, the industry is experiencing a phase of transformation. Not only has it challenged retail businesses around the world, but it has also provided an opportunity to usher in a retail revolution.
This was made possible by transforming the supply chain, increasing operational efficiency, excellent merchandising and customer engagement. In the current business climate, Lowe’s India has reiterated its belief that India is home to a broad network of innovators developing solutions to global problems, while the industry has an important premise that technology will reshape retailing.
Lowe’s Companies is at the forefront of innovation, serving more than 18 million customers weekly in the US and Canada. The brand’s services have been redesigned to turn customers’ imaginations into reality while delivering a seamless shopping experience. To accomplish this in tough times like this, companies have relied heavily on technology that has come to the rescue for diverse global sectors.
Below are some excerpts from an interview with Mr. Ankur Mittal, Managing Director and Senior Vice President of Technology, Lowe’s India, describing the innovations that are changing the sector worldwide:
1.) With what aspects does the innovation team in India support the global team? Are there specific projects that have been led from India and well received in the USA?
At Lowe’s, we value continuous improvement through innovation and building and strengthening a culture of experimentation. To drive breakthrough innovation, our Lowe’s Innovation Labs team in India worked with 8 startups from across the country who represent a wide range of interests including merchandising, AI-driven trend forecasting, automated content generation, talent acquisition, hyper-real AI and sustainable home building technology next generation, etc. In addition, Lowe’s Innovation Labs has also worked on in-house prototypes of unique sustainability solutions. Some of these projects are now being pushed for company-wide evaluation and deployment.
Additionally, Lowe’s India’s engineering and operations team is working to drive processes and incremental innovation to support our business priorities.
2.) While AR and VR spearheaded many of the new things being introduced to improve the consumer experience, what do you think of how AI and ML are transforming the retail experience around the world?
AR / VR are some of the newer channels that are gaining traction to drive customer loyalty, especially in retail. Lowe’s Innovation Labs has been using AR / VR solutions to improve the consumer experience since 2015. Our teams have also developed a strong understanding of various visualization technologies such as AR / VR, Mixed Reality, LIDAR, CGI, etc.
In terms of AI and ML, they offer an enhanced customer experience in both physical stores and digital formats. One of Lowes Innovation Labs’ exploratory projects in India was to evaluate hyperreal AI and its applications around synthetic ingredients to create a better consumer experience and help consumers shop in a more tactile environment on Lowes.com
Another use case of KI / ML from our home improvement business is the concept of converting a customer from a customer who buys products to a customer who carries out projects through us. We know that the latter is enormously more profitable than the former and ensures that the customer lifetime value is increased many times over. In this case, AI helps us understand the customer’s buying behavior and predict the project. This gives us the opportunity to offer project advice free of charge and to use the opportunity to carry out end-to-end projects. Additionally, we’ve used AI extensively to not only predict the likelihood of a customer churn, but also to understand why a customer is likely to churn.
3.) How have these technologies been received by consumers who shop at Lowe’s? Could you define a change in sales after adopting these technologies?
Lowe’s Companies Inc. had a phenomenal FY 20 with sales of over $ 90 billion and annual sales growth of over $ 17 billion. One of the main reasons for this enormous growth is the massive technological transformation that we have driven forward in the past two years, partly due to our eCommerce experience.
In FY20, we saw a 121% increase in sales at Lowes.com. In the first quarter of FY21, our revenue on Lowes.com increased 36.5% from 80% growth in the first quarter of 2020.
Last year we accelerated Lowes.com’s re-platform from a decade-old platform to the cloud. This really changed the site stability which enabled the site to handle a 70% increase in traffic volume in 2020.
4.) What do you think are the key technology drivers in reshaping the future of retail?
In focusing on the future of retail, it is important to experiment with new and in-depth technologies and evaluate whether these technologies solve clear vulnerabilities today for consumers or our employees and, accordingly, develop the skills that will drive the future of retail. As part of this, we need to run it through the entire lifecycle of building prototypes, executing Proof of Concepts and Proof of Futures, piloting it at scale, and deploying it across the enterprise.
Some of the technologies that could be the most important drivers from a home improvement perspective are AI / ML, Robotics, AR / VR / XR, VoiceTech, Materials Science, etc.
Since Lowes Innovation Labs uses its numerous startup accelerators as part of its To build Program that is deeply rooted in AI, all we have left is to experience how the new wonders unfold in our everyday lives.
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