Retailers told to use data to drive sales

The goal is to create a curated shopping experience that prevents stockouts.

Retailers should use and analyse data to identify which products to carry and how many to stock, predict consumer demand and optimize inventory to drive sales, according to a product strategist.

“You need to make sure you understand your customer deep down into their behavior, in their lifestyle, in their structure, and then transform it,” Alex Luu, regional strategy director for Thailand, the Philippines and Vietnam at Silicon Valley-based Centric Software, told the Retail Asia Summit in Bangkok in February.

Artificial intelligence (AI) could help companies analyse customer buying patterns and help them react in real-time, he said. Using the tech, retailers can optimise their stock keeping unit (SKU) selection to give consumers the right choices.

“You need to make the right decision at the very beginning to offer the right SKU, the right item, and make sure those are profitable,” Luu said.

He said the goal is to create a curated shopping experience that maximizes sell-through and prevents stockouts, as opposed to letting customers buy in-store and then shipping the product to them later because it is out of stock.
Retailers should develop products that resonate with customers, especially Gen Z — those born from 1997 to 2012 — which according to management consulting firm McKinsey & Co. will account for a quarter of the Asia-Pacific region’s population this year.

Luu said the Gen Z market usually buys products that reflect their beliefs. Aside from product development, AI could help retailers optimise pricing and promotion to ensure they can fuel sales and clear their inventory, he added.

But he also said there are challenges in AI implementation, including in gathering data and convincing people to adopt it. Once these are overcome, retailers could gather enough data to build their own AI solutions, he added.