EP 15: How AI is Revolutionizing the Retail Experience

Transcript for this Episode:

INTRODUCTION VOICEOVER: This is Tech UNMUTED. The podcast of modern collaboration – where we tell the stories of how collaboration tools enable businesses to be more efficient and connected. With your hosts, George Schoenstein and Santi Cuellar. Welcome to Tech UNMUTED.

SANTI: Well, well, well, today we have a very, very dear colleague of mine. I'm very excited about this. Ms. Diane Hutcherson, welcome to Tech UNMUTED.

DIANE: Hi Santi. Thank you for having me. I'm excited to be here.

SANTI: Yes. Just for the folks who are joining and listening in and want to know a little bit about Ms. Diane Hutcherson, she has 25 plus years in the sales leadership role in the telecom space. Very successfully so might have mentioned. In fact not to put you on the spot but I am aware of the fact that you recently won a Bronze Award for the Woman of the Year in Sales. You got a Stevie Award recently. congratulations because that was a very well-deserved award. When I saw that, I was extremely happy for you, so congrats on that.

DIANE: Thank you, Santi. I appreciate it. It was an honor. Had a lot to do with people around me. More to do with them than me, so I appreciate it and you included in that, obviously. You and I have worked together for a long time.

SANTI: Yes, we have. I'll say this now and once I say something in a live podcast, it is forever etched in the interwebs. I will say that you are one of the few people, few professionals that I absolutely admire and I am honored to have you on Tech UNMUTED today.

DIANE: The feeling is mutual. Thank you, Santi. You know that.

SANTI: I know. Listen, I know that you recently went to NRF Nexus. NRF Nexus for those who don't know, it's the National Retail Federation, I guess it's their annual convention but you've been doing this for a long time too. What I want to know today from you is one, maybe get a glimpse of some of the things that you took away from the conference but also what are you seeing in general in your daily life in that retail space. Let's start off with that. Let's start off with any surprises, anything that stood out for you at this conference.

DIANE: I'm always surprised by something. I think the thing and I remember writing it down, but I've been working in the retail space for many years. I've worked for multiple organizations who had a very retail-centric focus. To be in the room with those professionals is always a good thing but the one comment that I heard that really sat back was not all buyers are equal.

SANTI: Wow, that is so true.

DIANE: If you think about it, it makes a lot of sense, and if I'd actually stopped and thought, I would've thought, "Oh yes, from a marketing standpoint, absolutely." But to hear retail leaders, very well-Known retail leaders, and very common brands say that and have that perspective, it was very interesting. There's really two sides to that. The example that I heard was a business leader who was talking about walking into a very familiar and well-known technology store. This is a business leader who has spent thousands of dollars with this company to support their business and their employees. They're an ambassador of their brand essentially.

Then you have a team that walks in and the team's texting with friends doing their social media. Today, the in-store buying journey for those two is exactly the same. From a not all buyers are equal standpoint, you would think that the store would want to identify the value of each buyer to their company, to their brand, and provide an experience that is really more tailored to those individuals. That's being discussed widely throughout the retail space today. Personalizing the experience, in general, is huge right now. The organization, the retailer, their benefit to doing that is enormous topic and specifically technology and even more so AI plays into that in a big way, which I know we'll talk about.

SANTI: AI is one of those things that just strikes a chord with me. I can relate to everything you just said because I won't mention the name, but there's a very large coffee retailer that we all love and they do such a great job at remembering your name. To me that makes the difference. If I'm going to pay extra for coffee, I'm really paying not for the coffee, but for the experience and walking in there and say, "Oh hey, Santi, how's your day going?" By the way, they already know my drink. They see hundreds of people and so for them to be able to do the best they can at personalizing my experience along with the other hundred or so or thousands, I don't know how many people walk into one of these stores.

That is huge and that's why I keep coming back for the experience. I can relate to that. You mentioned AI. What was the sense of AI adoption just in general? What sense did you get as far as AI in the retail space?

DIANE: My take on AI is that based on what I'm hearing from people that I speak with in the retail space, it's not a matter of if but a matter of when. Unlike some other technologies of the past where you saw early adoption was a really big thing because you had more naysayers than you had early adopters and there was a lot of fear around it. I know there's some political conversation around AI and all that, but from a retail standpoint, I haven't heard a lot of pushback at all in terms of AI and incorporating that into their business. I think right now everyone is trying to figure out the path and the way and how to make it real in their environment and what that looks like.

Who should they be partnering with? A lot of people are waiting for the big companies to really dip their toe in the water and provide an actual product. Then others are jumping in, both feet in with startups because right now, frankly, that's a lot of what's driving that space is more of the startup-type organizations. Not a lot of pushback on we're not going to use it at all and more we have to figure out what this path looks like for us. They are actively working on that. Very interesting.

SANTI: I heard a new term, I don't know if this is a term also that you've heard. I've never heard of this term before until recently but profit protection. I hear this is one of those things that this particular vertical seems to be focused on. Do you have any sense on what profit protection means and how does it play out?

DIANE: Yes, and I think that it's the perfect example of where AI can help. The example that I have is you have an online buyer and they are surfing the website. Maybe they've put a few things in their cart, maybe they haven't. Retail organizations can use AI to determine based on their behavior on that shopping journey whether they are likely to make a purchase at the end of their session or not. Depending on the intelligence that they're getting back, they may or may not push an in-session discount or coupon, or offer to them. If there are things that they see that maybe this buyer absolutely has a propensity to we're pretty confident at the end they're going to make the purchase.

SANTI: I got you.

DIANE: They're not going to offer a 20% discount because they know from an AI standpoint, they probably have that buyer on the hook versus well, they just been hopping around. Maybe they've looked at a couple of sweaters but not really any significant interest. For this one to get them more on the hook maybe we do push an in-session 20% discount. I'm seeing those. I'm a buyer. I love retail because I like to buy things. I'm even experiencing those things and seeing those things myself when I'm out surfing or looking or shopping or whatever we want to call it these days.

To understand how the retailers are looking at that and to some extent how that's happening on the back end is very interesting and it's definitely something that if you think about it, they lose 20% or they gain 20% depending on that session.

SANTI: That's correct.

DIANE: It's from a profit protection standpoint. To me in my mind, I think that's probably what they're referencing.

SANTI: Basically what they're using is they're using AI to predict the outcome. It's prediction really. That's what it is. That's great. We've talked a little bit about it, help me understand how are retailers starting to think about modern tools to maybe support things like their communication needs. After all, tech on muted is all about modern collaboration. I'd be curious to know what are retailers doing to address modernizing their communication needs. Any insight on that?

DIANE: I think it goes back to the conversation that we have with our buyers, which is understanding their business needs and their initiatives, their corporate objectives, what really are they trying to accomplish. It all starts with that end user. It all starts with that buyer. What they're doing and what we can do is take that information and say, "Creatively, how do we impact that?" That's how they're looking at everything from point of sale to their devices, to their voice communication, but between the organizations. For example, one of the things I'm hearing a lot about is they're trying hard to create brand ambassadors and return buyers and commitment.

If there are ways through technology that they can provide a better experience that ensures that, 100% they're on board. For example, from a distribution standpoint, I've heard people reference first-time buyers. From a first-time buyer standpoint, if you can use technology and the tools that we can provide for their first order to deliver that product in three days versus seven days to their door, perfect. That's exactly the kind of example where they can use technology and they can fold that into delivering a better customer experience and hopefully a return buyer.

SANTI: There's nothing more satisfying than going to amazon.com because we all do it, you place an order in the morning and in the afternoon it's delivered. If you have the whole garage set up, they can actually put it inside. I'm like, "How do they do this?" Obviously, it's all about managing distribution, but it's just phenomenal. I just place an order in the morning and I got it delivered in the afternoon. That's mind-blowing to me.

DIANE: I heard this exact conversation recently and it was a big-- I'm trying to think of the brand. It was a clothing brand if I'm not mistaken. They were thrilled because they said they actually went in and ordered something from their company and ordered something else from Amazon at the same time, and theirs actually showed up faster than the Amazon. I was like, "Well, you've accomplished something there. That's fantastic."

SANTI: That's a big accomplishment. [laughs]

DIANE: Amazon's taken over the world. I don't know of many people who don't buy from Amazon at this point, but to hear them discuss that was pretty interesting.

SANTI: Yes. I want to get back a little bit on the AI stuff because again that's an area that-- I'm very passionate about any podcast you hear. You're going to hear me mention AI. It's where things are headed. Where does AI, and I guess to make it a little bit broader, the larger Microsoft ecosystem fit in the retail roadmap? Do you have any insight on that based on your experience?

DIANE: I think that's something frankly that I think we're all still trying to figure out. Very clearly there is a need and a benefit to the Microsoft ecosystem inside any organization. Even in a retail environment, you have headquarters, you have employees, you need the ability to keep all of those people connected. It's figuring out how to expand beyond that to the individual buyer at the storefront and the distributed brick and mortar or maybe the e-commerce side.

I think that's what we're still trying to work through and identify and flush out, but it definitely plays softly into that experience from a happy user, creates happy experience. I think that especially from a marketing standpoint and a content generation, you're hearing a lot about the retailers using AI in those terms already. We've used-- You and I've talked a lot about ChatGPT. We've both used it. I've heard examples of retailers and actual marketing people in that space using it on a day-to-day basis. I think what I'm excited about is that next evolution, which is figuring out what does that mean to the buyer. I'm really eager to see that. I think that's going to be a lot of fun to see it play out.

SANTI: Microsoft has so many AI-driven things on the roadmap that honestly it's going to change not only how we work, but it's going to change how we think about work. It's not just a physical, "Hey, here's how I'm going to do things," but you have to now plan differently. It's going to flip everything we know upside down which I can't wait. I personally--

DIANE: I'll tell you a really cool example is, especially with different generations, we are seeing a lot of discussion around social media binding. You're in your social media platform, we're all there, we've all done it. Something pops up, an influencer and they're wearing the latest hat or something. Well, maybe that hat is your favorite football team and it was pushed to you because they know that that's your favorite football team. It all ties in together. It all works in together, but from an E-commerce standpoint the ability to if you see your influencer wearing that hat, you want that hat.

Click the hat and guess what you've bought the hat and it's on its way. It's amazing what we can do today that we couldn't do even two years ago, much less for us old-school people 20 years ago. It is amazing, but I always thought that was a really cool example and that is something that people are just-- the retailers are dipping their toe into. Some you can do social media buying, but not everyone yet, but I think that's going to be the next biggest wave that you see in terms of the experience for me. When I want to buy that hat, what can I do? Well, guess what? You can just click and get it now.

SANTI: I can see eventually we'll get to a place where if you visit a physical store because one thing is to analyze online buying behaviors. Another thing is to read a person. You're in sales. One of the best things that a salesperson has in their toolbox is reading their buyer. Well, how do you do that with artificial technology? I can see a future where the AI recognizes that you are a returning buyer to this store. This must be a local store for you. You obviously like the brand.

I could see this AI remembering what aisle you went down, what are the items that you were looking at, what are the things that interest you and come up with, again, a prediction, and potentially even either push stuff to your phone or if you walk past maybe a digital display, can you imagine a digital display saying, "Diane, have you checked this new shirt that I think you're going to like?" You're like, "Well, how do you know that?" [laughs] I could see that. I could see that and AI doing that.

DIANE: 100% because a lot of people think it's either digital buyer or in-store buyer. Yes and no. The challenge today is the in-store buyer a lot are even demanding a digital experience and exactly what you discussed. The ability based on-- walk in front of a mirror, put in the dress that you want to try on and it show a model with your similar attributes, or yourself, for example.

SANTI: That'd be awesome. Like augmented reality right before your eyes wearing a dress.

DIANE: Exactly. Another thing about the in-store experience is demographics have changed for retailers in terms of, used to when retailers did marketing and created a campaign in a retail space, it was age, geography, interest, the very straightforward. Buyers are bucking patterns and historical trends today. There are people who are my age who still very much like the trends of what you would think would be a 25-year-old buyer.

SANTI: Got it.

DIANE: For that reason, the demographic now that a lot of retailers are watching is not that, but more their adoption and use of technology. They know from a marketing standpoint, "Do I approach this buyer from a digital experience? Do I approach this buyer from an online experience, from a social media experience?"

The more intelligent and overtime that they gather about that buyer, the more personalized, which we talked about at the beginning of the session, the more personalized that journey can become for that person. That's pretty cool. [crosstalk]

SANTI: That's actually very cool. That's fascinating.

DIANE: Store-wise, even the digital experience, it is more of an experience than just a transaction. We've talked for years, Santi in our space about we have to understand our buyer's needs and it's not about what we're selling them, it's about their needs and their journey. It's a solution, not a product.

SANTI: We're solving a problem.

DIANE: Retail more than ever, it's the same thing so much that a lot of the still brick-and-mortar locations are creating experiences for, not just from a digital standpoint, from a community standpoint. Like they are becoming more of a part of the community. For example, one of the big sporting goods stores up north, there's a big need up there for ice rink time. It's a big hockey world. Ice skating. Apparently, ice rink time is coveted there.

It's hard to find it. They actually put an ice rink in the store. Now you have buyers coming into a store that maybe they are web buyers, and because of that you're bringing-- There's so many things got that they're looking at. Even that technology folds in that into some capacity. More than ever retail, it's not the days of we stock the shelves and you go in and you pick which one you-- it's just not that world anymore.

SANTI: Wow.

DIANE: It could not be more interesting and fascinating.

SANTI: Wow. This is changing so much. It made me think, especially the demographics piece makes a lot of sense when you think about it. How they change, how they do their demographics. Wow. Diane, let me tell you, it was an honor to have you here. This was a lot of fun. It was a lot of fun-

DIANE: It was. Thank you, Santi.

SANTI: -and very insightful. I know that retail's always an ever-evolving vertical and to hear some of these things and some of these affirmations of adoption of technology, that's great to hear. I want to say thank you for joining us today. Folks, if you haven't done so, this is a good opportunity to go and subscribe to this podcast on your favorite podcast platform so that you don't miss any future episodes. You can also subscribe to our YouTube channel where you can watch a video version of this podcast, but Diane, this is the part I hate, and it is the part where we basically have run out of time. Thanks, everybody for joining us, but until next time. Stay connected.

DIANE: Thank you.

CLOSING VOICEOVER: Visit www.fusionconnect.com/techunmuted for show notes and more episodes. Thanks for listening.

Episode Credits:

Produced by: Fusion Connect