Retailers, like those in other industries, are already starting to implement AI, but few are yet to move beyond comparatively straightforward automation and data collection. Companies need to increase this investment, as AI is quickly becoming an essential part of product strategy, and how they can deliver the product to the customer.
Customers want products faster and cheaper, but above all they want to be treated like an individual and have a personalised experience. For example, the brand knows their customers preferences, who they are and can deliver enhanced customer experiences. With so many variables at hand, AI offers a powerful solution for delivering this.
AI is like a two-stage rocket: you first need to take the data from your business, such as interactions with a customer or in-store behaviour. Once collected, that data can be used by AI to fly higher and deliver better customer experience, from being able to predict product demand more accurately to delivering personalised recommendations or shelf-level advertising.
The challenge is to create the right use case for your company. It’s difficult because companies are protective of their data, and every part of the company has to come on that journey. It’s not an IT journey, or a C-level decision, it’s a decision that involves all parts of the company. It does not make sense to spend vast amounts to prove that you can build it in a technological sense: you have to prove that the customer wants to buy in. You test and fail, and do that over and over again. That is how you succeed with AI. In Lenovo’s CIO PlayBook research conducted worldwide with IDC, retailers cited emerging technology such as generative AI as their top business priority for the coming year, but also cited challenges such as dealing with AI ‘hallucinations’ and finding a reliable data platform. In the Middle East specifically, high customer experience and satisfaction is key, with an expectation of AI to help drive business innovation and cost optimization as well. Meanwhile, a high dependence on third parties and the potential of misuse were noticed as main challenges.
A revolution in aisle three
AI is already revolutionising the way retailers work. In inventory management, AI can oversee stock levels and ensure that stores never run short. One supermarket delivery company has giant warehouses the size of a football pitch and robots picking orders. Having total data oversight means they have a 99% success rate in sourcing the right product. Because everything is sent from a few locations, AI is used to efficiently map shipping routes, reducing their carbon footprint and fuel bill.
C2RO, a company part of Lenovo’s AI Innovator Programme, uses existing cameras in retail stores to provide AI analysis of customer movement in stores. The data is anonymous, but it helps manage demand peaks, ease queues and understand consumer demand within a day, crucial for retailers selling fresh food for example.
The next stage will be using AI to deliver a truly personalised experience. A supermarket could tell its customers when to arrive to avoid queuing and provide prompts on what to buy based on what might be running out at home. AI will become increasingly important in enhancing customer experience, with chatbots able to deliver instant support to customers, and even assisting in the checkout process. The foundation of this is using customer data effectively.
Using the technological building blocks of today, to create the retail experience of tomorrow
One chain of petrol stations in the Middle East uses data from its loyalty programme to boost customer experience. Visitors to the petrol station receive tailored offers, such as on tire changes or coffee. Supermarkets can learn from this – sending prompts via mobile alerts on what customers need to buy, rather than relying on their own lists. Another example is the new e& EASE store in Dubai Mall, which uses AI to enable FastPass and visitor line activation via biometrics, smart gates and even include self-assisted stations.
Technology is an enabler. Companies need to think outside the box, because the technology is already there. It’s not hard to see a future where shoppers share a picture of the sole of their foot which a shoe retailer uses to make sure the shoe they’re about to buy will fit. Low cost technologies such as RFID tags will grow in importance in the age of AI. Attaching these to products such as milk cartons could allow a retailer to automatically send another carton when one is running out.
The proof points are there already. The real thing is not difficult to construct. I think retailers should all be wearing sunglasses, because the future is very, very bright.
The article is authored by Alaa Bawab, General Manager, Lenovo Infrastructure Solutions Group, META.