How Quantium’s Actuaries are Helping Retailers Improve Customer Experience and Reduce Product Waste

Large retailers aim to create a personalised shopping experience for every customer. By better understanding customer needs, each store can help shoppers to find the products they want in their local stores. This makes customers’ lives easier. It also helps retailers build loyalty and cut waste: by matching the stock they hold to what customers are looking for. That’s good for shoppers, good for the company, and good for the environment.

Actuaries at Quantium have been working with large retailers to achieve this goal.  Their brief: to collect and analyse shopper data to help build a more tailored customer experience.

Challenges

The team faced three key challenges in delivering this:

• Measuring demand is highly complex.
• They had to consider and ensure ethics and fairness around collecting data on customer attributes.
• They needed to find a balance between logistical complexity and commercial desirability.

“When you work with an organisation that has a large scale, if you can move the dial on accuracy by a few basis points, it doesn’t look like a big change, but it affects millions of dollars in product.” – Victor Bajanov, Executive, Product Analytics, Quantium. 

Actuarial approach 

Meeting retail customer demand gives Quantium’s actuaries the perfect large-scale problem to solve, because it’s so hard to measure accurately. Logistical nuances, like seasonal products, store footprints and packaging designed for specific shelf space make the problem more complex than simply who buys what, when and where. 

Quantium tackle this by harnessing shopper data to build a clear picture of what products customers want, and in which locations. This helps retailers answer the basic question: ‘should this product be in this store or not?’ 

Quantium is also very conscious of data privacy. They apply data ethics to guide decisions on the type of information they collect, with customers typically opting-in in exchange for a more tailored retail experience. Even for data that is collected, it is de-identified and aggregated to yield actionable insights without identifying and targeting individual shoppers. Consumers get the benefits of state-of-the-art algorithms, without being invasive.

Likewise, they make sure their algorithm doesn’t advantage certain suppliers. Fairness is a key principle of ethical data use and always upheld as missteps here could have implications for cashflow of small businesses operating on tight margins.

“Within the laws of physics, we’re trying to get as close to replicating the personalisation of the online shopping experience of customers in-store. We want people to ideally walk in and see the products they want on display in front of them. It’s complex data that makes it easier for retailers to personalise in-store shopping.” – Victor Bajanov