AI’s potential for cost-saving shortcuts in retail

The debate around artificial intelligence in retail often focuses on how consumers will use AI-enhanced technology in their homes to ease the burden of shopping. But retailers are also looking for ways to streamline their labour intensive chores.

For many in the sector, AI-driven improvement to supply chain management is a particularly exciting prospect, as this could lead to time and cost being taken out of existing processes. Perfecting inventory forecasting and fulfilment accuracy has long been the dream of retail executives.

Bring on the process improvements  

Speaking at a recent Retail Connections event in London, Nick Lansley, Director and Innovation Insider at Lansley Consultancy (pictured above) talked of how AI will take data analytics to new levels of efficiency when machine-learning capability is factored in. “Supply chain and sales trend data has long been available to analyse and drive inventory accuracy, but with AI you are finding process shortcuts,” he said. “AI can help you spot patterns, problems and opportunities early. Essentially you’re able to speed up the time between insight and action.”

Paul Wilkinson, Head of Tech Research at Tesco Labs alluded to “the nirvana of perfectly stocked shelves” that AI is starting to make possible. He spoke of Wal-Mart’s trial of 50 robots in US stores which trundle the aisles and take low res photos of the shelves, looking for gaps in stock. They are reportedly using AI to find the most efficient way to navigate around the store and spot stock-out trends. “So this is machine learning making a time-consuming inspection process a lot more efficient, and potentially saving money for the company,” said Paul. “With all that data being gathered over time, retailers can start to aspire to stores that are perfectly stocked. Out-of-stocks could become a thing of the past.”

Paul, Nick and their fellow panelists at the event also touched on how AI can help retailers deliver seamless personalisation with the help of predictive analytics, greatly assisting marketing operations. “The raw processing power behind AI means that retail head offices will have a richer understanding of customer behaviour at all touchpoints across the business,” said Nick Lansley. “Retailers’ tailored promotions and product recommendations will be better, more accurate planning around demographics will be possible, and ultimately brands will be able to reach out to customers in more meaningful, intuitive ways, providing exactly the products and services they want.”

A world of chatbots and robots?

Clearly there are head office operational wins to consider for the future. In stores and online, AI will undoubtedly reshape key elements of customer interaction too.

This is where the sector needs to tread very carefully, the experts warned. One concern was that too much AI and automation could take the joy out of shopping for consumers, and the satisfaction out of work for employees.

Anusha Couttigane, Senior Analyst of Kantar Retail acknowledged that chatbots are becoming slicker and more responsive thanks to AI technology, enabling them to identify problems quicker and also provide a bigger variety of solutions in a more tailored fashion. However she warned against replacing all human interaction in retail, commenting: “Nobody wants to be treated as a data point.”

Advocating the need to retain human reassurance in the buying process, Katharina Wittgens, Managing Director of Innovationbubble was on hand to argue the case for retail staff. “AI must not be allowed to take away everything that humans hope to have in their jobs,” she said. “If no effort is required in a job, and no enjoyment is forthcoming, you will have a very disengaged workforce.”

Watch out for blog posts giving further insights from our event Artificial Intelligence: the new game changer in retail

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