Not so long ago, e-commerce stores dominated the AI and analytics conversation. Now, in-store brick-and-mortar retail analytics is seeing a rapid growth, with the use of AI, machine learning, location-based alerts, personalized real-time offers, just-in-time supply chain management, and more.
Perhaps partially because I am a loyal customer myself, I continue to be impressed with Starbucks and their leadership in the retail space in terms of tech integration. They have tons of access to data on users, habits and location statistics because 25 percent (or about 8 million users) of their U.S. transactions come from a smartphone.
Starbuck’s data-driven AI algorithm tracks what customers buy daily to recommend similar products and offers in the future. For example, when if I get a latte every morning, it will detect it is morning and suggest a breakfast option that I could add on and it may even come with an incentive to encourage me to try the new item. However if I made a purchase in the afternoon (for a pick me up) it may suggest a snack instead.
Retailers are using AI to better understand, connect with and create superior experiences for consumers.
Amazon is using AI in its first physical store to enhance the shop so customers can ‘Just Walk Out’ without using checkouts. Mimicking the technology used in self-driving cars, this is made possible through computer vision, sensor fusion and deep learning.
Ocado uses AI to analyse and categorise customer emails so problems can be dealt with quicker than previously possible. The AI model gives emails a summary and priority tag.
Morrisons is using artificial intelligence to improve stock availability in-store and has rolled out a system that uses AI and machine learning to predict exactly which products are needed in each of its stores. Morrisons has been using the technology to improve product availability, which has reportedly resulted in reduced shelf gaps by up to 30%. The system automates over 13 million ordering decisions per day.
Alibaba’s digital marketing arm has unveiled an artificial intelligence-powered copywriting tool. By tapping into the huge pool of content on Alibaba’s e-commerce sites Tmall and Taobao, the AI copywriter uses deep learning and natural language processing technologies learned from millions of top-quality existing samples to generate copy for products. Brands and advertisers can insert a link to any product page, and then see multiple copy ideas.
We’re hearing a lot about AI lately. We have seen virtual reality, endless aisles, and apps that allow mannequins to “talk” to us about what they’re wearing in action at trade shows, but we’re not seeing it used on sales floors too much yet; at least not in the Midwest where we live.
Lowes is using LoweBots that detect shoppers as they enter the store and guides them to what they are looking for quickly and easily. Macy’s has launched virtual and augmented reality furniture shopping experiences in 69 stores, and Amazon now has Amazon Go, a brick and mortar store that allows shoppers to check in upon entering via an app, and then leave with their purchase without scanning an item or taking out their wallet.
It’s exciting to see what’s in store for shoppers, but the end of the day nothing will ever replace the one-on-one attention of an engaged store associate.
Voice-powered service tools and chatbots are the most compelling AI use cases and, in my opinion, have the most potential.
Sephora and other brands are chatbot experiences through messaging app Kik. Sephora has a chatbot that asks users a series of questions to collect feedback. Mining this data, the chatbot can answer specific questions, offer makeup tips and even provide product recommendations. What makes these use cases so successful is that the chatbots add to the brands’ already stellar service strategies.
Amazon Echo (Alexa) – connecting consumers 24-hours, not only answering questions and playing music, but also allowing to buy from Amazon and using AI for unprecedented quality of speech understanding.
AI is reinventing retail, plain and simple. Many retailers have embraced this while others are still hesitant or simply do not want it. This said, the reality is AI is changing how customers and brands connect and thus, retailers need to keep up or risk not being top of mind among their customers when it comes time for them to make purchase decisions.
Watson from IBM, for example, helps retailers better understand their customers and predict future behaviors of their customers, ultimately driving sales to that merchant. Through a combination of data collection, analysis of customer behavior and intelligent predictive analysis based off these details, retailers are better able to capture customer dollars and support their consumers better through their real-time actions in both marketing and sales efforts.
I think an interesting AI experience is the Shisharka Land brand using a MysteryBotchatbot. It’s used to uncover different services or experiences, but you need to be clever to get through the process.
With Artificial Intelligence becoming more like a standard and less like a movement I think there is one standout retail business that has adopted AI as the standard. The flower industry has become very innovative. They utilize mobile applications as a practice and has innovative delivery methods that truly allow them to compete in a national level. From holidays to special occasions this business has made it a practice to collect data abut its customers. This business is also adapting machine learning the help keep customers reminded of special occasions and even offer automatic deliver of products and services based on customer data. It has become a data driven business with AI as its pilot.
AI adoption is in very early stages and no doubt we will see all kinds of fascinating uses for it. For now, Morrisons, in the UK, is a great example of a retailer that is leveraging AI for practical purposes, scaling success and making store associates more productive in the process, rather than replacing them (a big fear associated with AI adoption). Morrisons has taken the time to build algorithms that combine store level sales, weather and even local event variables in order to optimize stock levels.
This type of common-sense application of AI is a logical starting point for retailers because it drives results fairly quickly and has ripple effects that benefit employees and even suppliers. Sensible first, then fanciful forays can follow!
Alibaba debuted its FashionAI concept store during the summer of 2018 at Hong Kong Polytechnic University (PolyU) in an effort to bring AI experiences to fashion shoppers. The pilot store featured Guess apparel on smart racks, smart mirrors and next-generation fitting rooms. All items in the store were supported by RFID, gyro-sensors and Bluetooth low-energy (BLE) chips. This allows the mirror to more accurately capture movement and spot the colors, styles and attributes that are most popular among customers.
Visitors to the Miracle Mile Shops at Planet Hollywood Resort & Casino in Las Vegas can interact with an AI-powered shopping guide through Facebook Messenger whenever they need better information to enhance their shopper journey. The chatbot, named “Jules,” showcases a witty and sassy personality designed to reflect the mall’s audience of chic and lively shoppers. The chatbot can provide operational information about Miracle Mile Shops such as parking and security; suggestions of where to shop for certain items; food and beverage options nearby; and unique information for upcoming events or shows.
I was a cynic when Amazon launched the Echo and the Alexa voice assistant, but now I’m a convert. Until you’ve tried it, it’s tough to appreciate how frictionless it can be to re-order a favorite item simply by speaking. AI-powered voice interaction will transform commerce.
The robotics and artificial intelligence deployed in Ocado’s UK warehouses represent science fiction becoming a retail supply chain reality. Robotic picking tools, automated planning tech and systematic use of predictive analytics combine with people to allow the online grocer to keep pushing the boundaries of eCommerce-led customer service.
In the world of retail, much of the profound advances in AI are never seen by the consumer – they are in the supply chain, and behind all of the systems running online ecommerce.
While AI has become very pervasive in supply chains to prevent out of stocks and streamline inventory management, the “cool” application of AI for consumers occurs when AI is deployed to help personalize and improve consumer experience.
North Face for example is using AI to streamline the customer journey by recommending products based upon a more natural language interface. As customers increasingly use mobile to shop, chat bots are another cool AI application that provides timely, relevant information when human staff are not available. There is emerging evidence that millennials in fact prefer the AI experience from chat bots over talking with a human agent.
This retail fashion expert round-up interview was conducted by Manthan.
Manthan is a leading cloud analytics company, pioneering analytical applications for consumer-facing businesses.
Manthan’s products are powered by AI, cloud and prescriptive capabilities and are unique in their ability to use machine intelligence to process decision contexts and respond automatically with actions and recommendations to manage every aspect of a consumer business.