Viewpoint: Algorithms determining service levels

Brought to you by Retail Insider and K3 Retail


Uber recently introduced a system in Australia and New Zealand that bans people from using the service if they are awarded low ratings by drivers.

After a number of incidents of bad behaviour by certain passengers the company has brought in measures that take away access to its service for six months if people fall below a certain level when scored by drivers.

Uber: don’t let your rating slip

This sort of system is likely to play a greater part in society as services such as Uber and Airbnb become more commonplace and people on one side of the transaction are reliant on the person on the other end for the arrangement to work satisfactorily. Being able to implement such solutions is very easy today with algorithms very much at the heart of these digital-based services.

Expect to see such mechanics widely used in the retail sector in the future as it becomes increasingly easy to accumulate data on individuals and then determine the level of services given to them according to their value to the company.

The most obvious way to utilise this capability is to stop certain shoppers from returning unlimited amounts of items. For fashion retailers the issue of serial returners is a major problem and so the running of algorithms to determine the ease with which shoppers can return goods seems a sensible course of action.

Serial returners: the bane of retailers’ lives

For those people who rarely return items it should be painless for them to send back unwanted goods but for serial offenders there should be tiered levels that give them fewer options when wanting to return.

Effectively retailers are giving a better level of service to their better – more loyal, more valuable – customers. This can clearly manifest itself in myriad ways such as offering same day delivery at no cost and giving access to limited edition goods to the best customers.

This use of data and clever algorithms to determine the levels of service delivered to individual consumers will become increasingly commonplace in the future as it clearly makes sense to both retailers and customers.

Glynn Davis, editor Retail Insider

K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.