Technology to help us automate decision-making, remove human discretion: Kishore Biyani
Future Group's Kishore Biyani has been a vocal critic of the Indian e-commerce sector, which is dominated by discounts and cashbacks. However, that does not mean he is not keen on technology. To fend off challenges emerging from the world's largest retail players like Amazon, Walmart and Alibaba, Biyani's group businesses are at the forefront of implementing the latest emerging technologies including artificial intelligence (AI), machine learning (ML) and data analytics.
The group, which runs several retail formats, businesses and brands across food, grocery, homeware and fashion segments, is looking to personalise customer service using the large trove of consumer data it already has. The Future Group recently partnered with Palantir Technologies, a data analytics firm that works with US defence organisations, to analyse and make sense of the vast data it has and it continues to collect everyday.
In an interaction with TechCircle, Biyani talks about how these technologies have helped the company to reduce shortage and wastage, decrease time to market and even produce and manufacture - around 50% of its sales are contributed by its own brands - according to the demand prediction. Edited excerpts:
How are you deploying analytics and AI to retarget customers or make them spend more with personalised offers?
Every product or brand a customer chooses tells a story about him or her. Everyday, on average, there are almost one million customer transactions that take place across our businesses. They visit us multiple times, often within a month, to shop with us. The cumulative data thus generated is huge. We now use data sciences, ML and AI to help make a faster and more accurate decision for our business. Potential benefits include helping our customers go through a more personalised experience at our stores, informing them about a new product or brand that is launched and is relevant to them, or engaging with customers before significant life events or festivals their family or community is celebrating, and much more.
Simultaneously, the tech also helps us forecast demand more accurately, source or manufacture a particular product in the most optimum quantity, design stores and plan merchandise relevant to customers and much more. The goal is to automate most decisions and take human discretion out of most day-to-day decision making.
Recently, you had partnered with US-based data analytics firm Palantir in order to collect and use the extremely micro-level data.How this will help you?
Palantir is among the many data sciences and AI organisations that we are working with. Palantir has the ability to work with very large and diverse data that an organisation like ours generate. Over the years, we had developed multiple proprietary tools like Consumer Shastra, Aspiration and Affluence Index that helps us understand our customers in the catchment areas around each of our stores. We are now layering these proprietary tools with algorithms and AI capabilities. The objective is to have a single view of every customer and treat her or him as an individual, rather than as a part of a larger cohort or community of customers. And then personalise her journey and her experience with us.
Today, almost everyone buys their daily needs from multiple channels, stores etc. As we are able to increasingly personalise the experience for her, the customer will be willing to spend her entire wallet with us. For customers who shop with us or are our members, we want to be so good to them that their entire spend on food, grocery, fashion and homeware is with us. A better understanding of our customer is also going to help us launch new services like subscriptions for daily needs and grocery items, anticipate and fulfil every need and aspiration of customers and also lower prices for our products.
How are you using technology to bring synergies among Future Group's various brands and divisions?
Our business is fairly simple – we sell food, fashion and homeware. And we do it through multiple formats and brands. In food and fashion, we are present across the entire value chain. Our brands account for almost 50% of our total sales. So, we manufacture or source it ourselves, we design and package all our products, we own the supply chain and we own the distribution of these through our retail networks. Thanks, we own the data that passes through the entire value chain – from manufacturing to the customers’ home. Technology allows us to now see this entire value chain as a flow of data – from making the product to the customer who is consuming it.
Has technology helped you reduce your time to market across all products from apparel to groceries?
Being present across the value chain, consumer data from our stores helps us manufacture or source in much more efficient ways, move goods at the optimal pace and quantities, and increase productivity and efficiency of all our resources. As we work more with data and predictive analytics, we believe we can estimate the correct quantities to manufacture or source, even before we launch a new product. This will reduce prices consumers pay for our products and markdowns in business.
Has technology (analytics and AI-based prediction) helped you to reduce wastage or procurement costs?
Our calculations suggest that almost 15% of our sales now are influenced by some form of digital interaction with customers – whether on our social media platforms, on our payment wallet, through direct messages to our customers or through our portals. This has already allowed us to reduce our dependence on mass media and rely on direct communication with customers. Customer acquisition cost is decreasing and we expect these numbers to grow exponentially as we strengthen our AI and data sciences capabilities.
For a retail company, which is your foremost concern/challenge while implementing technology?
Better technology is always an opportunity to further improve on what we do. We choose our technology and the platforms we create in a manner that we are able to continuously add new features, capabilities and take advantage of new developments in this space.
Will the Future Group experiment with fully automated stores with no checkout counters in the near future?
We are a customer first organisation. For us, the first question is what does the customer want or would like – not what technology is available and what we can do with it. Customers demand great experiences, they want personalisation and great service. We want to use technology to deliver these.
Are there any moonshots you would like to discuss?
We have very recently created a new organisation – Tathastu. It is built around data sciences and AI that can fuel a number of new businesses and moonshot ideas. It is distinct from Future Group in its mission and purpose. It is similar to Alphabet and Google – one pursues the moonshot ideas while the other nurtures mature businesses.