AI in action – the transformation of retail

Posted on: 29/01/2019

AI in action – the transformation of retail

The opportunities presented by artificial intelligence are potentially transformative. And far from it being a technology of tomorrow, many retailers are already exploiting it. And the reasons are clear: a survey carried out by Vista Retail Support in August 2018, shows that 77% of UK consumers feel that artificial intelligence (AI) can “transform their shopping experiences”. More than two-thirds believe retailers should be doing more to bring the technology into their stores. 

But what does that mean in practice? The emergence of new tech tools – and an accompanying lexicon of new words and phrases – means there is a lot that 21st century retail boards need to get to grips with. 

So where is the retail industry at with this futuristic technology? Click here to read the full article by Retail Week, as we take a look at some of the most exciting examples of AI in action. 

1. AI-powered visual search 

Shoppers don’t want to spend hours searching for clothes online, especially on a touchscreen. As Aubrey-Cound points out, how people like to browse is – “visually – they don’t want to do it with text”. 

Cue one of the most important developments in ecommerce to date: visual search. 

Instead of suggesting products that are similar only on paper, visual search presents shoppers with clothes that look and feel like the ones they are browsing. Instead of size and colour alone, they can find items with the same style or detail. Big name retailers are committing to the AI tech that drives it.

In the UK John Lewis has permanently installed ‘Cortexica’s Find Similar’ technology on its iPad app, after a six-month trial.

2. Stock optimisation 

There is nothing new about the need to keep shelves stacked and stock up to date. But with stores and warehouses hooked up to increasingly busy and complex ecommerce sites, there has never before been such a need for speed. 

With 491 stores, Morrisons decided it needed to get on board with the technology. The solution highlighted one of the most important and potentially valuable uses of AI – replenishment optimisation. 

The grocer’s partnership with AI specialist Blue Yonder led to a 30% reduction in shelf gaps for starters. 

Taking into account a whole range of factors, including weather forecasts and public holidays, as well as automatically analysing sales and stock data from stores, the system Morrisons uses now makes 13 million stock ordering decisions per day. 

Morrisons chief executive David Potts has described the replenishment system as the retailer’s “biggest new initiative” in technology. 

The use of this technology is by no means confined to the grocery sector. In fast fashion, where huge volumes of product moves in and out of warehouses barely touching the shelves, the possibilities of automation are plentiful.

3. The use of chatbots 

“If you think you can spot a robot a mile off, take a minute to reflect on Amazon’s voice-activated AI assistant Alexa. The fact that ‘she’ isn’t real didn’t stop more than a quarter of a million of users proposing to Alexa last year. Millions more have happily chatted away with AI chatbot customer service agents – inappropriately or not – as though they were nattering with a human.” 

Whether their customers know it or not, some big retailers are using chatbots as live agents on their customer service lines and to help steer shoppers to products. 

A survey by IBM last year revealed that 65% of millennials say they prefer to be greeted by a chatbot than a human agent. So bots are not just a way of cutting back costs on call centres – they are preferred by many users and are more sophisticated than humans when it comes to searching vast quantities of information. 

4. Intelligent recommendations 

Since not long after ecommerce began to take off, retailers have been offering suggestions to shoppers based on previous purchases. AI takes this to another level. 

North Face’s platform doesn’t just remember what shoppers have bought in the past, it uses IBM’s Watson AI to work out what you might need – after all, a stroll through the Peak District and a trek up Mount Kilimanjaro are very different scenarios. 

Using AI to process a variety of data about the customer, from the usual characteristics such as height and weight to more specific details such as where in the world they’re off to, North Face offers shoppers gear customised for each trip. 

5. Personalised marketing on the go 

AI isn’t quite in the era predicted in Minority Report, where a shopper will be recognised and assisted the second they set foot in a store. 

But that is not to say that AI hasn’t made it into the real, bricks-and-mortar world. 

Early versions of shopping apps were little more than a hand-held directory of a mall or even a high street. This is being refined with more intelligent systems that ‘guide’ shoppers around stores, knowing – thanks to geolocationing technology – where they are in a store, backed up by AI to help them find what they’re looking for. 

US department store Macy’s has made some of the most exciting advances in this field. In 2016, working with IBM Watson, the retailer unveiled the Macy’s On Call app, the closest thing so far to a smartphone personal shopper. 

Customers type in what they’re looking for and are then directed by the app to the right place in the store. With time the AI-powered app learns and refines the answers it gives back based on that shopper’s individual habits. With its in-built geolocation, intelligent learning ability, chatbot and visual search functions, the Macy’s app ticks a lot of AI boxes. 


To discuss this further, you can email me on danny@refind.co.uk

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