How artificial intelligence is shaping the future of retail
Artificial Intelligence (AI) is set to shape the future experience of retail, from in-store personalised adverts and chatbots, to augmented reality displays and prices that adjust in real-time. In today’s world of retail, customers are willing to spend more to get the personalised experience they expect, according to McKinsey’s report. It is vital for physical retailers to understand their customers, in order to deliver on the high expectations.
This is where AI comes in, offering multiple ways to meet rising customer expectations. In-store AI enables retailers to create new customer experiences including autonomous shopping. Retailers can gain the required information by analysing in-store data, which allows them to deliver dynamic pricing and real-time promotions. It also empowers both retailers and customers by providing insights on what shoppers are looking at, what they are buying, and what they will buy next, as personalised buying experience is essential for today’s customers.
AI also bridges different channels, providing an omnichannel approach for retailers to better understand their customers, as well as implement technologies such as conversational AI to both online and in-store experiences.
Behind the scenes, business leaders can improve the supply chain operations such as forecasting and routing optimisation, by leveraging AI analysis. With ‘smart warehouses’, retailers will be able to keep track of inventory, link stock levels to real-time purchase trends, and boost efficiency across the business.
A new way of shopping
The technology that will light the spark for this change is available now. It exists in the cameras already in retail stores combined with the power of AI and edge computing, which helps bring data storage closer to the source to enable quicker processing and achieve faster results. American retailer Kroger is already pioneering this technology, with powerful edge AI servers in its stores which are helping to deliver the future of self-checkout. The servers are connected to high-resolution cameras in-store. An AI application monitors shoppers as they check out, running on edge servers which work in real-time.
When the edge servers spot an error, which could be anything from non-scans to ‘product switching’ where shoppers swap stickers to scan expensive items as cheaper ones, the system reacts immediately. If a customer triggers an error, they’re given a real-time ‘nudge’ in the form of a five-second video displayed on the point-of-sale terminal. If they don’t respond, a shop assistant is notified.
This is made possible by servers which can process inputs from 20 cameras at once in real time. The cameras help Kroger deal with theft, but also keep track of inventory – and the technology has huge potential right across the front and back-end of retail businesses. By connecting edge AI to in-store cameras, retailers may soon be able to check that deliveries match exactly what was ordered.
When customers ‘click and buy’, AI cameras could ensure they leave with the right goods. Such systems make it easier to track stock and understand demand. Harnessing AI and edge computing offers potential far beyond simply dealing with problems such as theft. It can deliver customer insights that will transform the whole business, empowering retailers with the knowledge they need to improve store planning and place goods to drive increased sales.
AI’s full potential in retail
Just about every store already has cameras, but the footage being captured is barely being used — it’s used as evidence when an incident occurs, but for little else. An edge system, combined with the power of AI, can rapidly turn this footage into tangible business value. Simply by plugging a video feed into an edge server GPU, the system can deliver the information required for valuable shopper behaviour analytics, allowing retailers to deliver instant personalised advertising, real-time promotions, and dynamic pricing. All of these can increase purchases and drive revenue.
AI can also be highly powerful in helping retailers ‘join the dots’ and build an omnichannel approach. This comes by linking data from ecommerce with retail data, helping to build a ‘Customer 360’ view to deliver improved experiences. When it comes to customer service, AI chatbots will become increasingly important, both in-store and out, helping to break down the barriers between offline retail and ecommerce. These interactions will continue to paint a full customer picture.
Analysis of employee behaviour can also help business leaders drive productivity and optimise staff schedules, while the cameras can also help protect employees from threats and ensure stores aren’t overcrowded. Edge computing works in synergy with AI here, offering retailers a way to process this information at the point of interaction, delivering information where it’s needed, fast.
Beyond the shop floor
This powerful combination of AI and edge computing also has applications well beyond the shop floor. Analytics from warehouses and stock rooms can allow retailers to be more efficient about ordering products, restocking shelves, and planning logistics effectively.
The more this data is shared between different parts of the business, the more valuable it becomes. If real-time stock levels are linked to shop floor data about purchasing trends, these insights can help the whole business to become more efficient and more streamlined. For instance, retailers can use data to understand the average amount of customers who enter the store at different times throughout the year, and stock their floors accordingly to match this demand. This is a key differentiator for successful retailers in the lead up to busy periods, such as Christmas.
In warehousing and supply chain, AI can help with everything from optimising routing and cold chain to inventory and warehouse management. AI analytics can ensure that products arrive faster and fresher, and empower business leaders with the ability to anticipate problems, while also reducing waste.
AI – The future of retail
In the retail sector, forward-thinking companies that take advantage of real-time data and analytics will have a leading position in business success. Business leaders will be able to deliver a personalised experience by leveraging AI and edge technology to harness the data, as well as improve backend efficiencies. Beyond day-to-day business operations, data also helps to unlock insights that lead to entirely new revenue streams. Whilst AI is still in the development phase, now is the time for retailers to embrace this powerful technology.
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