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Research says consumers love innovative companies (and that grows the value of your brand). So how difficult is it to become an 'innovative' retailer?

AI helps retailers focus on strategic and creative opportunities by processing the mundane.

And what does ‘innovative’ really mean?

Note: With this newsletter, we’re implementing a new online content ‘briefcase’ program, focused on a category of discussions and questions that retailers and restaurateurs ask us about. Each ‘briefcase’ is an online collection of articles and research that you can come back to when you have time to explore the issues, examples, and lessons we’ve found to be helpful to our customers.

In our debut edition, we’re looking at the roles and intersection of Business Intelligence, Automation, Artificial Intelligence, and Innovation within a Digital Transformation; from getting better business insights, to big data & automation, to retail use cases, to planning for the technology, to what retailers are spending on AI (& why), and finally, getting started without breaking the bank.

You’ll find the list of articles and the link to the briefcase at the end of this article.

Innovative means...

When we hear the word “innovative” we often think it means experimenting with technologies like artificial intelligence, IoT, virtual reality, robots, and the like.

But being innovative is really about the improvements you make behind the scenes — that demonstrate how ‘together’ you are so you can deliver the experience that makes your customer say, “You ‘get’ me and I love you for that.”

BI + AI = Better Results that Learn to Help You Improve Continuously

It all starts with your data, processes, and networks, and extends throughout your people, places, and products to keep learning and constantly help you improve the way you do business. We know that many brands use AI to improve things from customer acquisition to conversion, personalization, and loyalty; but they’re also learning to use it to make efficiency gains and improve margins across all parts of the business. Big and small transformations are happening everywhere from product design, to manufacturing, to the supply chain, to customer management, to your workforce, your business ecosystem, and throughout entire industries.

Digital Transformation = Intel + Tech for New Capabilities

Digital Transformation is not just about the technology, though the technology overhaul is critical; Digital Transformation is about using that technology to develop new capabilities, with systems of intelligence that leverage every person, process and data asset across the organization. It’s about building a new, or just better, business model, in order to deliver on your promise that your customer will pay for (and love, and potentially evangelize).

According to Microsoft’s Satya Nardella,

“Digital transformation requires systems of intelligence that are tailored to each industry, each company, and each micro-task performed by each person. Systems that can learn, expand and evolve with agility as the world and business changes.” (LinkedIn Pulse, 7/2016. Still very relevant.)

AI helps retailers focus on strategic and creative opportunities by processing the mundane.

Starting Today: How to Think About AI in Your Business

To illuminate further, here’s an excerpt from our curated article: “Models Will Run the World” from the Wall Street Journal (requires registration):

“Today most industry-leading companies are software companies, and not all started out as such. Aptiv and Domino’s Pizza, for instance are longstanding leaders in their sectors that have adopted software to maintain or extend their competitive dominance.

“There is no shortage of hype about artificial intelligence and big data, but models are the source of the real power behind these tools. A model is a decision framework in which the logic is derived by algorithm from data, rather than explicitly programmed by a developer or implicitly conveyed via a person’s intuition. The output is a prediction on which a decision can be made. Once created, a model can learn from its successes and failures with speed and sophistication that humans usually cannot match.

“A model-driven business, then, uses models to power the key decisions in its business process, creating revenue streams or cost efficiencies. Building this system requires a mechanism (often software-based) to collect data, processes to create models from the data, the models themselves, and a mechanism (also often software based) to deliver or act on the suggestions from those models.

“A model-driven business is something beyond a data-driven business. A data-driven business collects and analyzes data to help humans make better business decisions. A model-driven business creates a system built around continuously improving models that define the business. In a data-driven business, the data helps the business; in a model-driven business, the models are the business.” (Read the rest in our briefcase and check out some of their examples. They’ll get you thinking.)

You can’t have better business models without your business data.

(P.S. All the above may sound “pie-in-the-sky” to those of us who are still struggling to get a good grip on inventory: read the ‘briefcase’ articles “How AI will revolutionize inventory management” and “Brains Meet Brawn in Retail & Supply Chain” for some insight.)

So How Does a Retailer Get Ready for a Digital Transformation?

Automation comes first, according to an Infosys’ report:

“96 percent of more than 1,000 executive respondents across 10 industries agreed that “achieving pervasive automation is key to their digital transformation initiatives.”

But first, to get to that stage, you need to make better use of your business intelligence tools as the baseline, and foundation, of any improvements or innovations.

Which is why we’re (still) surprised each time a retailer or restaurateur tells us that business intelligence and analytics tools are not employed consistently throughout the company, or if they are, it’s at a very basic level of reporting. There are a variety of reasons why this is so; not everyone is a data scientist or a business expert, people will interpret results differently, people will make business decisions based on their own silo (the list goes on, all real concerns). And people still have their own core jobs to do. (Read “Why Your Business Intelligence Needs Artificial Intelligence” in our ‘briefcase’.)

What this really comes down to is: Your peers are already moving the needle on AI. Juniper Research found that retailer spending on AI alone will reach $7.3 Billion just four years from now. Two additional reports say that three-quarters of fashion retailers are investing in AI right now. (Read these articles in the ‘briefcase’.)

Done right, BI is the language of your business performance; AI is the engine that continually generates improvements in your business. The combination is what drives real next-gen transformation.

AI is Accessible Now.

AI is now  an accessible way to make continuous ‘iterative-yet-significant’ improvements to the delivery of your brand promise. And thanks to the Googles, Microsofts, and Oracles who have been pioneering the ‘democratization’ of AI through open source initiatives and the like, retailers are already making use of code libraries and case studies, in pilot programs and smaller projects.

Even further, we’re seeing more and more incorporation of AI into ERP. (Read “Up-and-Coming Tech of the Year: Democratized AI” and “The future of ERP is AI” and “Artificial Intelligence is transforming ERP solutions” in the briefcase.)

AI in Retail ERP creates sustainable competitive advantage.

It's Not Just 'Star Wars' in the Dressing Room - Together with BI, AI is Just Good Business Sense.

You can’t ignore BI, use it intermittently, or rely on dated BI products or processes, if you want to succeed, especially with AI-aided technologies that actually help YOU, and accelerate your efforts in creating competitive advantages your customers want.

Your BI’s the starting point for any potential innovation, as well as the final say in whether (and how) it’s working. Innovation is inevitable; it’s well, you know, Darwin & all for those of you who are paying attention and thoughtfully advancing toward your own retail transformation.

So check out our debut issue of the Retail Transformation Advisor, which is all about getting retail business results from BI & AI.

Some of the articles (and research reports) are timeless – whether they’re from 2016, 2017, or 2018, many mid-market retailers are going through this for the first time now, so we’ve included them. We hope it helps as you’re thinking about ‘owning’ your future in retail with your business transformation.

Here are the articles you’ll find inside the ‘briefcase’:

1) Why Your Business Intelligence Needs Artificial Intelligence
2) Models Will Run the World (Subscription or registration required)
3) How AI will revolutionize inventory management.
4) Brains Meet Brawn in Retail & Supply Chain
5) How to Get Business Insights from Artificial Intelligence
6) How retailers can use artificial intelligence effectively
7) What Small Retailers Can Learn From the Industry’s Push Towards AI and Big Data
8) Turning Big Data into Business Insights
9) The power of digital personalization: how to leverage AI to compete with Amazon
10) Innovation Through Digital-First and Agile Customer Engagement
11) Up-and-Coming Tech of the Year: Democratized AI
12) The retail renaissance: Leading brands use data and AI to win
13) AI in Retail
14) Artificial Intelligence and Machine Learning
15) Juniper Research: Retailer Spending on AI to Grow Nearly Fourfold, Reaching $7.3 Billion by 2022 (Paid Report)
16) Three quarters of fashion retailers will invest in artificial intelligence over the next 24 months
17) From Online to Offline: How Brands Use Big Data to Figure Out Where Their Customers Will Shop
18) Five Big Data Use Cases for Retail
19) Big data and digital transformation: How one enables the other
20) The future of ERP is AI
21) Artificial Intelligence is transforming ERP solutions
22) Use Artificial Intelligence Where It Matters
23) Get your priorities straight before you start applying artificial intelligence in your business solutions

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LS Central (Nav) is the only end-to-end retail business management system for midmarket retail & restaurant brands.

LS Central is integrated into Microsoft Dynamics 365 Business Central (formerly Dynamics NAV), one of the world's most popular ERP systems for growing mid-market businesses.

LS Central (formerly LS Nav) delivers end-to-end retail and hospitality management capabilities for sustainable growth and profitability whether you have a retail business, a restaurant business, multiple verticals, or retail + restaurant (and vice versa) LS Central is the one solution that can manage it all.