At ALDO Group, a Canadian multinational premium retailer specializing in shoes and accessories, artificial intelligence and machine learning are equipping employees with the “superpowers” they need to succeed in delivering a superior customer experience.
In a recent virtual event hosted by SAP, Matthieu Houle, Chief Information Officer at ALDO Group, detailed the company’s success in leveraging value-driven AI while harnessing SAP’s composable CX solutions to increase revenue and loyalty.
For ALDO Group—which owns the brands ALDO, Call It Spring, GLOBO, and Sperry—overseeing the design and production of footwear and accessories across both brick-and-mortar and online operations is the work of 16,000 employees across the enterprise.
To move that work forward, ALDO has developed a machine-learning model, “Delphine,” to ensure the company can avoid overstocking or understocking while optimizing its inventory management processes. Ultimately, this model will free employees to focus on more creative tasks, such as fashion trend predictions, while providing them with an analytical starting point for demand forecasting.
Additionally, ALDO Group is helping to develop a generative AI model that will provide its shoppers with customized product recommendations based on particular celebrities and online influencers. If a shopper were to request, “I want shoes like David Beckham would wear,” for instance, the model would generate an image based on that input and recommend shoes that aligned with it.
Last fall, ALDO Group partnered with McGill University in Montreal, hosting a “hackathon” during which students worked to develop retail solutions with generative AI capabilities. One team of students came up with the model, which ALDO is currently bringing into production.
“I want to give my colleagues superpowers,” said Houle, referring to AI as a “key part” of ALDO Group’s go-forward business strategy. “If AI can crunch a lot of data, rather than [employees] being in Excel all day, they can get insights.”
The Future of Customer Experience
In conversation with Geert Leeman, Chief Revenue Officer, SAP Industries & CX, Houle spoke to the rapidly changing state of customer experience, noting that “customer expectations are going higher” and it’s the responsibility of brand and retailers to keep up.
“It used to be, with the fashion and runway shows twice a year, brands would know what we needed a year ahead,” he explained. “It was easy for supply chains. Today, people don’t look at runways like they did. They look at influencers and social media, TikTok. Things change by week, by the day.”
While generative AI is currently all the rage in the world of technology, given the potential of its natural-language capabilities, it’s not the only way that companies like ALDO Group can get ahead. Predictive AI and machine learning, Houle stated, have been far more instrumental in transforming ALDO’s approach to innovation.
To secure the retail industry’s “holy grail” of predicting, addressing, and managing future sales and inventory, ALDO Group leveraged a Canadian government subsidy to develop Delphine, a predictive machine learning model that can help ALDO to ensure inventory is available across all channels, from in-store to TikTok Shop.
“We gave her a name because we just want to make sure that people don't think that she's going to have all of the future [responsibilities],” Houle explained. “It’s art and science, so we have the fashionistas and buyers that understand the human part of planning. We just want Delphine to be at the table when they do their plans because she's very good at crunching data.”
"A Superpower, Not A Replacement"
ALDO has an expansive partnership with SAP, leveraging its solutions across front- and back-office functions, including ERP, finance, supply chain, e-commerce, customer experience, and human resources. To enhance its predictive modeling, Delphine leverages data from ALDO data sources and SAP applications. Getting the most value out of the model, Houle said, requires ALDO to stay focused on data quality, integrity, and governance.
“Even if it's the same data, sometimes the data, and the way you need to manage it, is not the same as when you do your Sunday sales report,” he said. “We've invested quite a bit of time on this. Pulling [data] out of SAP and making sure it goes back into our workflows and processes is an area that's not as sexy as the AI itself, but an AI by itself doesn't do anything if people are not able to use it.”
While managing data flows between front and back offices has been made easier by their discrete focuses on consumer data and product information, respectively, ALDO is still working to overcome issues posed by hidden data that still exists primarily in outdated spreadsheets.
Houle elsewhere noted excitement about SAP Business Technology Platform (BTP), a potential “silver bullet” to help deliver the business process adaptability and flexibility ALDO Group needs, given the industry’s “massive disruption” and changing consumer behavior.
To evaluate any technology’s strategic value and priority, Houle said he works closely with ALDO’s executive team to evaluate challenges and growth opportunities, determining where to invest and what processes to prioritize, based on what will drive the most significant value for the business. In assessing AI applications, ALDO Group remains focused on considerations such as build-versus-buy, timing, and partnership pressures.
“We’re not a technology company, so who are the right partners? Who’s going to get us ahead? Do we need to do it now or wait for things to stabilize a bit?” he said. Internally, Houle advised early awareness building and project engagement to aid AI adoption.
AI “will be a superpower, not a replacement,” he added. “Make sure the users that will benefit from the superpower are at the table. It’s also about training, teaching how they can use GenAI tools or Delphine. It’s about change management — but it’s a pretty big change that’s required.”