18 Retail Organizations Transformed via Artificial Intelligence and Machine Learning

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Swapna Karandikar

October 15, 2019

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Artificial Intelligence (AI) and Machine Learning (ML)The fourth industrial revolution is here! Intelligence, in the form of Artificial Intelligence (AI) and Machine Learning (ML), are quickly altering the technology landscape and belief of what is possible. Big data, Cloud, and Automation already brought with them the promise of higher productivity, efficiency and convenience. These technologies, when integrated with AI and ML, bring radical change by empowering enterprise systems for independent decision making and actions.

As is evident from the image below, AI has already made a wide spread impact in most aspects of our lives, from transportation, to machines, to our homes and workplaces.18 Retail Organizations who have Embraced Artificial Intelligence (AI) and Machine Learning (ML)

This impact is also reflected in the investment patterns of many industries. As per IDC, worldwide spending on artificial intelligence (AI) systems is forecast to reach $35.8 billion in 2019, an increase of 44.0% over the amount spent in 2018. Spending will more than double to $79.2 billion in 2022 with a compound annual growth rate (CAGR) of 38.0% over the 2018-2022 forecast period. In terms of industry AI adoption:

  • Retail leads AI investments with spending approximately $5.9 billion in 2019 on solutions like automated customer service agents, shopping advisors & product recommendations.
  • Banking will have the second largest spend with $5.6 billion going toward AI-enabled solutions including automated threat intelligence & prevention systems as well as fraud analysis & investigation systems.
  • Discrete manufacturing, healthcare providers, and process manufacturing will complete the top 5 industries for AI systems spending this year.

The industries that are expected to have the fastest growth in AI systems spending over the 2018-2022 forecast are the federal government (44.3% CAGR), personal and consumer services (43.3% CAGR), and education (42.9% CAGR).

The use of Artificial Intelligence (AI) and Machine Learning (ML) in Retail

Retail was one of the first industries to leverage intelligent automation as part of their digital transformation strategies. There are many studies which have highlighted its use in retail. One such study, the NRF survey of 1,900 global retail and consumer products companies across 23 countries, sites that adoption of AI-driven intelligent automation in the retail and consumer products industries is projected to leap from 40 percent today to more than 80 percent by 2022. In retail, the highest growth is expected in supply-chain planning, while in consumer products companies the deepest penetration is anticipated in product design, development and manufacturing, as highlighted in the graphic below.

Use of AI and ML

Image Source – https://nrf.com/research/coming-ai-revolution-retail-and-consumer-products

So which retail entities have innovated their customer experience and engagement via Artificial Intelligence and Machine Learning? We have compiled a short list of 18 firms that serve as powerful use-cases of the many ways that AI and ML can be utilized to enhance retail processes.

  1. Lowes is Piloting Robots that help Customers Locate Items“Lowebot” not only manages inventory but roams around Lowes stores to interact with customers to help them find the items they need as well as direct them to the right location in the store.
  2. Walgreens Uses AI to Track the Spread of the FluWalgreens uses data from the number of anti-viral prescriptions it fills at more than 8,000 locations to track the spread of the flu and keep appropriate inventory accordingly as well as inform customers about the severity of the flu outbreak in their region.
  3. Sephora Makes It Easy to Find MakeupSephora’s “Color IQ” device, when held to a client’s face, scans their face and provides personalized recommendations for foundation and concealer shades, while their “Lip IQ” does the same to help find the perfect shade of lipstick.
  4. The North Face Helps Customers Find the Perfect CoatThe North Face launched a mobile app that utilizes IBM’s Watson to help customers find the perfect coat for the activity and area it will be used.
  5. Neiman Marcus Uses AI for Visual SearchNeiman Marcus’s “Snap. Find. Shop.” app helps customers locate products which match a desired product captured by their mobile device’s camera.
  6. Taco Bell Helps Customers Order Tacos on The GoThe first restaurant to start accepting orders through text or voice; Taco Bell launched “TacoBot” that leverages AI to allow customers to place their order using natural language.
  7. Macy’s Adds AI to their In-Store ExperienceWith Macy’s “On Call” app, customers can chat with an AI bot to get directions to a specific item or check if something is in stock. The bot can even detect if a customer is getting frustrated and alert a human employee to go help the customer.
  8. Walmart Deploys Robots to Scan ShelvesWalmart, one of the largest retail stores in the world, has begun utilizing robots for inventory management. The robots scan the shelves and alert Walmart employees if they require restocking as well as any sale prices that need updating.
  9. ThredUp Uses AI to Remember Customer PreferencesThredUp uses AI to personalize their services and provide product recommendations. ThredUp’s Goody boxes are produced with the help of AI which keeps track of customer’s preferences to deliver tailored, second hand or gently used clothing items.
  10. Amazon Eliminates Cashiers With AIAt Amazon Go stores, AI creates a quick and seamless shopping experience. Customers take what they need from the shelves and their Amazon account gets charged automatically when they walk out of the store. No more waiting in a cashier line.
  11. Uniqlo Can Read Minds With AIUniqlo’s AI-powered “UMood” kiosk analyzes viewers facial reactions to various product images, and provides recommendations based on those reactions.
  12. West Elm Connects Style and ProductsWest Elm’s “Pinterest Style Finder” scans a customer’s Pinterest boards to understand their personal style and create a list of recommended home decor and furniture items to match.
  13. Sam’s Club Makes Warehouse Shopping SimpleSam’s Club is not only using AI technology to make traditional checkout lines obsolete, it can even map the most efficient route through the store to get everything on a customer’s specific shopping list.
  14. Olay Uses AI to Personalize SkincareOlay’s “Skin Advisor”, harnesses their 50 years’ experience in skin care via a simple “selfie” to correctly identify the true age of a customer’s skin, evaluate their skin health and make recommendations for problem areas with a personalized skin care regimen.
  15. Kroger App Customizes Product RecommendationsKroger’s mobile app identifies the shopper and highlights products they might be interested in. It recommends products based on preferences like gluten-free or kid-friendly snacks for a parent as well as provide personal pricing and alert shoppers if an item on their shopping list is on sale.
  16. H&M Uses AI to Keep Popular Items StockedH&M uses AI to analyze sales and identify product trends by location and adjusts inventory to accommodate customer demand.
  17. Zara Streamlines Order Pickup with RobotsWhen customers come in to pick up their online orders, they enter a pickup code and the Zara robot delivers it via drop box for quick and efficient order pickup.
  18. Starbucks Bot Makes It Easy to Order CoffeeThe coffee giant is making it even easier to get your morning pick-me-up with its AI-enabled voice ordering. Customers can chat with the “My Starbucks Barista” app to place their order either by voice or text. When they arrive to their local Starbucks, they skip the line and grab their order which is ready to go.

We highlighted Retail examples in this post because they are a leading adopter of AI, but other industries aren’t far behind. Banking, manufacturing, automotive, fashion, and agriculture are all aggressively looking for ways, and in some cases, already adopting AI as part of their mainstream operations.

No matter which industry, AI is poised to become an essential component of business processes and functions to solve critical concerns related to productivity, efficiency, effectiveness, customer experience and more.

We hope these examples will start a conversation internally around how intelligent automation, AI and ML could be incorporated into your organization or department for powerful results. If you are ready to dive into the possibilities, contact our AI team to get started.

Disclaimer: All trademarks or registered trademarks mentioned in this article are the property of their respective owners.

1. https://www.idc.com/getdoc.jsp?containerId=prUS44911419
2. https://nrf.com/research/coming-ai-revolution-retail-and-consumer-products

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