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Nowadays, every organization can gain a competitive advantage by adopting information technology in its business plan. New types of retailers have been born, retailers that do not need a physical store, but the ones who are at a click away such as  Zalando and Asos.  So, the blog will dive into giving a perspective on how fashion online retailers maintain their brand loyalty as it cannot be measured and obtained by traditional factors. Could AI influence brand loyalty? The answer is YES.

Online fashion retailers such as Zalando and Asos, use the click-only strategy. Click-only companies can only be found online, in a constant need for innovation in order to improve efficiency, enhance sales, and increase customer satisfaction (Forbes, 2019). So, it can be said that these fashion retailers create the service of connecting customers to different fashion brands, and also with their brands. But how do they maintain and gain brand loyalty? Brand loyalty is usually affected by promotion, consumer satisfaction, and trust.

With more products, an online retailer has higher chances of more customers and higher satisfaction. By delivering different functions on the website, such as color search, the customer can see different products, not actually looking at the brand. This happens with the help of machine learning. By looking at prices, a good price of the products on a website is crucial for loyalty. An optimized machine learning algorithm will adapt the price by looking at past datasets such as competitors’ pricing data, transactional data, past promotions, inventory, and customer reviews. Thus, machine learning can affect brand loyalty, as a customer can go to another website which has smaller prices on the wanted product.

Last but not least, brand loyalty requires marketing programs that target potential customers and maintain the current ones. One of the most important factors is the customer’s contact with the brand, so traditionally it would be the salespeople. But what happens when the encounter is online and there is no person who can make an impact?  Artificial Intelligence can positively impact the customer’s experience on the website, with the use of Chatbots or Virtual assistants. These services are created with the help of machine learning, which collects as much data as possible and learns from each customer interaction. For example, Asos increased its purchases by 300% using a chatbot (Forbes, 2018). Visual search is another extraordinary innovation that AI can offer. By only uploading a picture with a fashion product the Asos application matches the image with similar products (BusinessInsider, 2018).

More and more functions created by AI are changing the way people are shopping. Could these new trends lead to the extinction of traditional retailers? No more going shopping on the streets or at a mall? Could AI also be implemented for traditional retailers?  Feel free to share your views!

 

References:

 

BusinessInsider, New App Asos app feature which uses a photo to save you money, [Online], Available at https://www.businessinsider.com/asos-style-match-app-review-how-to-use-tips-tricks-2018-3

Forbes, 2018, Customer Experience is the new brand, [Online], Available at https://www.forbes.com/sites/shephyken/2018/07/15/customer-experience-is-the-new-brand/#24cf0e8a7f52,

 

Forbes, 2018, How much money has poured into AI and Customer experience?, [Online], Available at https://www.forbes.com/sites/blakemorgan/2018/06/06/how-much-money-has-poured-into-ai-and-customer-experience/#579d7ca27ed2,

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General Electric (GE), one of the largest corporations, is having hard times in the new pandemic world. It is not a first for the company, as it has struggled in the last years to stay afloat.

Since February, when GE’s stocks were steadily climbing to a 13.16$  in February 2020, the pandemic created a free fall on the stocks, in the present days dropping below 6.5$, the lowest it has ever been.

In 2013, GE started considering its turn to digital transformation with its software platform, Predix. The software was intended to combine big-data analytics, asset management, machine-to-machine communication, security, and mobility. GE Digital was born in 2016, employing more than 1500 employees.

What went wrong? GE’s business units needed technological development, thus the insights of GE digital. Almost all the revenue of GE Digital came from its internal units. Moreover, when the unit had the chance of partnering with external customers the generation of short-term revenue was the goal due to its quarterly income statement which was focused on profits and losses. Thus, combining internal needs with outside partnerships only focused on short-term revenue did not work for GE Digital and Predix.

What are the take-aways from GE Digital failure? 

1. The need for the internal digital transformation of other business units such as jet-engines, railroads, wind turbines has made it impossible for GE Digital to connect with external partners;

1. The desire to digital transform all GE business units contributed in the fall of GE Digital, as there were too many projects to focus on at the same time;

1. The short-term revenue-oriented objective has limited GE Digital to explore different initiatives and partnerships that required long-term investments.

GE Digital renewed

In 2018, GE announced the emergence of a new industrial software business combining the old GE Digital with GE Power Digital and GE Grid Solutions, referred to as GE Digital 2.0, with its Predix platform being renewed. In July 2019, GE Digital announced a new CEO, which looks like a fresh start for the business, as GE Digital has separated from its parent company. Thus, learning from past mistakes, GE Digital could focus on developing software business by improving its Predix platform and creating more business opportunities.

On the 5th of April, GE Digital Grid helped in the organization of the nine-minute light power off in India, where more than 1 billion people showed solidarity for the fight against COVID-19. Without the help of GE Digital, the power system could have collapsed with such a sudden decrease in demand. Currently, GE Digital has multiple projects that show a big potential of what the company could do in the near future.

On the other hand, GE Digital still has weaknesses that put the business at risk, such as:

1. As GE Digital was a failure, in the beginning, it now has attached to its name a damaging reputation, thus it will need rebranding and more projects such as the one with the Indian government;

1. As its parent family faces challenges in the new pandemic world, customers can shift their view of partnering with GE Digital;

1. Competing in the IoT industry is risky, as big competitors such as Bosch, Siemens, IBM, Microsoft are involved in the IoT software; GE Digital should consider investing more in its Predix platform by coming up with more software packages.

GE Digital’s future depends on the next steps it will take. Will it start creating more value for the company by investing in Predix and other projects, or will it still be limited by its parent company?

References

https://www.ge.com/news/reports/2015-in-review-ges-digital-industrial-revolution

https://www.forbes.com/sites/forrester/2018/12/14/ge-announces-new-industrial-iot-software-business/#4888a75a4b1c

https://www.inc.com/alex-moazed/why-ge-digital-didnt-make-it-big.html

https://www.ge.com/digital/customers/posoco-and-ge-digital-ensure-power-grid-stability-during-national-show-unity

https://www.investopedia.com/insights/rise-and-fall-ge/

https://hbr.org/2014/11/digital-ubiquity-how-connections-sensors-and-data-are-revolutionizing-business