From pandemic highs to inflation-driven lows, retailers have been on quite a roller coaster ride these past 3 years. However, we are far from the “retail apocalypse” predicted back in 2010. Instead retailers have reinvented themselves for a new era through the embrace of cutting-edge technology and plain old ingenuity. 

Though creative strategic thinking can’t be quantified, retailers increased reliance on digital technology is well documented. In fact, experts predict that retailers’ global investments in digital transformation tools will reach $388 billion by 2026, growing by 18% a year.

Here is a look at how three major retailers are leveraging process mining, artificial intelligence and business process automation to solve the industry’s biggest challenges. 

Ikea accelerates its order-to-cash (O2C) processes

Since we originally covered Ikea’s cloud-driven, omnichannel transformation back in 2021, much has transpired. 

In addition to launching new, AI-powered customer experiences such as IKEA Kreativ, the global retailer has also revamped its back-office systems. Leveraging SAP technology, Ikea digitized, standardized and streamlined its finance and procurement processes. To deliver further efficiencies, the company also deployed Celonis’ process mining tool. 

For example, Ikea executives noticed that the company’s failure to collect rate (the percentage of people who never pick up the items they purchased online) in the U.K. and Ireland was especially high. Leveraging SAP and Celonis tools, the company was able to pinpoint the solution: narrow the time frame in which the customer could pick up the product. 

At a recent Celonis event, Tim Hills, Process and Data Insight Development Manager at INGKA Group (Ikea’s parent company), explain,” When we look at the various contributing factors for this click and collect cancellation, we can see that the UK had more of an opportunity than all of our other countries combined. But when we looked at the data further, we could see that we had some countries with similar volumes to the UK, but lower cancellation rates.

So then it’s about trying to understand the correlative and causal effects in the end to end flow, to then look at what is causing the problem? How do we prevent it in the first place?

In the tooling we have you can configure the pick up window between 1 and 12 hours. One of the things that we were able to see is a causal effect between the length of those windows and the rate of cancellation. We did some testing in the UK of reducing those appointment windows and it showed that for every hour we reduced those appointment windows, the rate of cancellation reduced by 7%.”

Macy’s leveraged advanced analytics to avoid inventory pileups

In 2020 Macy’s executive team unveiled its multi-year turnaround strategy, Polaris. An omni-transformation, the five major components of the Polaris strategy were strengthen customer relationships, curating quality fashion, accelerating digital growth, optimizing store portfolio and resetting cost base.

Fast forward almost 3 years later and, despite some ups and downs, the Polaris strategy has proven to be a success. In addition to automating its warehouse operations and launching new, digitally-enabled customer experiences, Macy’s is also leveraging data analytics to optimize inventory management and more effectively navigate supply chain disruptions. 

For example, after mining vast amounts of credit card data, Macy’s identified to identify some concerning consumer trends. Thus information pushed the company to cancel orders and adjust its spending on merchandise just as customers were reducing their spend on discretionary items. As a result, the company was able to avoid the inventory pileup that plagued their competitors. 

Walmart Goes Robotic 

This past year, the world’s largest retailer, Walmart, announced it would be upgrading its regional distribution automation strategy. To start, the company plans to roll out Symbiotic’s robotics and software automation platform across all 42 of its regional distribution centers. As of now, they are leveraging the technology in 25.

In a statement to CSA, David Guggina, senior VP of innovation and automation, Walmart U.S. explained “The need for accuracy and speed in the supply chain has never been more visible, and we’re confident that now is the time to move even faster by scaling Symbotic’s technology to our entire regional distribution center network. Using high-speed robotics and intelligent software to organize and optimize inventory, the Symbotic System helps us get products to our customers quickly and seamlessly by revolutionizing how we receive and distribute products to stores.”

To further augment its automated distribution strategy, in October 2022 the company announced they would be acquiring Alert Innovation, a material-handling technology for automating order fulfillment in retail supply chains. In addition to automating order retrieval and dispensing, it also offers enhanced data analytics capabilities. In addition to delivering real time data, leveraging AI and machine learning, the system has also learned how to make substitutions for out of stock items.