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. 

ALDO’s Pre­dic­tive AI Mod­el: Delphine

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 Mon­tréal, 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.

Inte­gra­tion with SAP Com­pos­able CX Solutions

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.”