Michael Ross, chief scientist and co-founder of DynamicAction, offers insight to RIS News readers regarding the automation of decisions in today’s digital world adding layers of complexity and mass amounts of data for retailers in both the physical and digital realms. The piece digs into the basic decision frame work, differences between making decisions in brick-n-mortar and ecommerce, as well as what types of decisions need to change. He underscores the imperative nature of embracing an updated approach in order to keep up with the revolution that is unfolding.
Here is an excerpt from the byline:
I am not advocating automation of all decision-making. The value of people – their experience, intuition, judgment and empathy – remains critical to many core business decisions. Decisions on strategy, people or creative ideas still need to be made by managers.
However, there are many decisions in digital retail business that are taken on a day-by-day, hour-by-hour or minute-by-minute basis that need a new approach. These are in effect the ‘routine cognitive tasks’ of business, where data is analyzed, rules applied and actions taken. The types of decisions that should be automated include:
CRM: When to email an offer to a specific customer? Which product? What promotion?
Merchandising: When to markdown a product? Whether to run a promotion or increase marketing spend on a particular item? Whether to delist a brand?
Operations: When to upgrade an order to next-day delivery? How to prevent high-value customers getting stopped by a security system?
Marketing: How much to bid on a specific keyword? How much to spend on acquiring a new customer?
Site: How to rank products when customers search on your site? How often to change landing pages?
Changing the entire decision making process of an organization requires strong leadership. It is change management on an enormous scale – effectively taking a business on a journey where human input is augmented by algorithms. Ironically, in a world of big data and digitization, the most critical assets will be people-related.
